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Business Officer Magazine
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Steady Aim

Campus leaders from all departments feel the economic squeeze. A group of them explains how they’ve stayed on course with core programs and services while avoiding less productive paths.

By Sandra R. Sabo

*After 35 years in higher education, Greg Roberts has experienced budget reductions on a fairly regular basis. Now executive director of ACPA-College Student Educators International, Washington, D.C., Roberts observes, “It seems as if every 10 years or so, either demographics, shifting priorities, or the economic situation causes a marked decline in resources or the number of students that leaves institutions struggling to meet their goals.”

But this time, Roberts says, the situation differs significantly from previous retrenchments. For starters, the U.S. economy isn't the only one ailing; many other countries are struggling to overcome financial difficulties as well. Rising unemployment, declining home values, and failures of financial institutions have affected all types of families and students, putting more pressure on financial aid offices. And unlike the most recent recession in 2000, many colleges and universities today report record enrollments. The institutions can't simply reduce essential services to save money because they're assisting more students than ever before.

Such significant differences carry long-term implications. From Roberts's perspective, recovering from the current economic crisis isn't a matter of waiting another year or two until everything is normal again. “The economic situation is so severe that the allocation of resources in higher education will continue to be re-evaluated and reassessed,” he says. “Forget about 'business as usual.' There is no return to the way we were.”

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So what does the new version of “normal” look like in various areas around campus? Business Officer put that question to representatives of the sectors within the Council of Higher Education Management Associations. Their answers might deepen your understanding of how best to approach these turbulent times at your own institution. 

Strategic Actions

“We'll never go back to where we were before,” affirms Sandy Hicks, assistant vice president and chief procurement officer at the University of Colorado, as well as president of the National Association of Educational Procurement. “Even if my organization ever returned to the same number of FTEs, we'd look very different because we're doing different things now.”

In early 2009, Hicks permanently lost eight positions in her area—a 15 percent cut in staff. She anticipates more cuts this year, probably followed by a third round in 2011. In response, Hicks remains constantly on the lookout for greater efficiencies and doesn't fill an open position without first analyzing whether she needs it somewhere else or even at all.

In the last two years, she has shifted responsibilities to create two new positions without requiring new funding. The new strategic sourcing manager researches and negotiates contracts, then turns them over to the new strategic contracts manager, who provides day-to-day contact with vendors.

“Essentially, we've divided the organization into a strategic arm and a tactical arm, because in the past we found we weren't getting around to the strategic part of procurement,” says Hicks. “Now, by isolating the functions, we've actually gained some ground.”

For example, by changing the consortium contract it uses for office supplies, but not changing the vendor, her institution has saved $784,000 per year. Hicks estimates another $600,000 in savings from a new contract for scientific supplies that recently took effect. She notes, “That type of savings gets people's attention. Procurement has greater visibility than in the past, as more people now ask us to help them save money.”

Hicks also reports a bigger push to use technology. The University of Colorado just introduced a travel reimbursement and procurement-card reconciliation system, soon to be followed by an e-procurement system. The latter will give 24,000 people on three campuses a place for one-stop shopping as well as make contract compliance easier.

Incentives to Change

Having Their Say

When invited to deliver any message to business officers, here's how some of your colleagues in other areas responded.

“College stores deliver value by serving both the learning environment and the living environment. If resources are frozen and college stores can't bring in the technology to better service students, revenues can be greatly impacted.”

- Brian Cartier, National Association of College Stores

 

“Form partnerships with those who have other agendas on your campus, including unions and organized groups of faculty, students, and staff. Make sure they know they're part of the solution when you're addressing economic issues.”

- Jack Giarusso, University of Massachusetts Lowell

 

“Balance the tactical and the strategic, so the institution can remain focused on moving forward even while it's instituting cuts.”

- Sandy Hicks, University of Colorado

 

“An across-the-board cut that affects all areas may be seen as sharing the pain, but it's not necessarily strategic. For example, the entire institution depends on the IT network—and sometimes spending money on IT services can help others save money.”

- Pattie Orr, Baylor University

 

“With the resources we have, how do we stay true to the mission of the institution to develop educated, talented, communicative individuals who can be successful at whatever they do? That holistic education is what people are paying for and what we all need to have ongoing dialogue about.”

- Greg Roberts, ACPA-College Student Educators International

Even as everyone else on campus looks to technology to help streamline their work, the information technology (IT) area must make its own budget adjustments. As vice president for informational technology and dean of university libraries for Baylor University, Waco, Texas, Pattie Orr considers herself fortunate because her budget remained flat last year. Still, she needed to identify and reduce discretionary spending to offset price increases from suppliers.

Some steps that Orr has taken may sound small—such as reducing the number of mobile devices or applications supported—but they have big implications for the institutional culture. Faculty or departments long accustomed to doing things their own way may discover their choices are not always financially sound.

“As long as you have plenty of money, having three different schools each pick a different application for the same function isn't seen as a problem, nor is supporting a mobile device with few users. But when it's important not to waste any money, standardizing applications and devices can help IT help the university,” says Orr, who serves on the EDUCAUSE board of directors.

Rather than handing down edicts from IT, Orr visited with various users to emphasize what they'd gain from making a switch, such as a new mobile device or access to new applications. She took the same personal approach to selling departments on the idea of virtualized servers—clustering servers in a data center rather than maintaining separate machines in numerous locations.

“You have to provide incentives for people to make such a change,” says Orr. In addition to saving money on the server itself, for example, she emphasized how virtualization would free up space for those who share the service, allow quick restoration for servers, provide data center-quality HVAC and UPS (uninterruptible power supply), and reduce energy costs significantly.

Reining in energy costs certainly resonates with members of NASPA-Student Affairs Administrators in Higher Education, Washington, D.C., according to Gwen Dungy, NASPA's executive director. NASPA members report scheduling four-day workweeks during the summer to reduce air conditioning costs, offering more classes online, clustering classes in several buildings to save on heating, and mothballing underused facilities. Fortunately, such economical steps also appeal to the philosophy of sustainability often advocated by today's students.

A less-popular option is to consolidate services, such as assigning one employee to serve several multicultural student centers rather than each center having a dedicated staff person. “That really means a reduction in services,” says Dungy. “Our members have to establish new priorities like these because they know they can't be all things to all people.”

That realization alone may be the most significant effect of the current economic downturn.

Mission Critical

Let's face it, you can't provide the same number of programs and services you did before furloughs or permanent staff reductions kicked in—at least not for long. Technology can compensate for the loss of some personalized services, especially because today's students are technologically savvy. Still, when stretched too thin, staff become stressed and the quality of their work may begin to suffer. 

“In higher education, we're accustomed to saying that we need to do more with less. Well, with this economic downturn, it's time we learn how to do less with less,” believes Roberts. He foresees a fundamental rethinking of everything from food service and counseling services to academic advising and financial aid. In other words, everything is on the table for consideration.

“At a certain point, you have to ask, 'What's more important for our students?'” observes Jack Giarusso, executive director of human resources at University of Massachusetts Lowell (UMass Lowell). For his institution that point came in January 2009 when, halfway through the fiscal year, the state government mandated a 7 percent reduction in the university's previously approved budget. Rather than institute a flat percentage to be shaved across the board, the university's leadership team reviewed all types of expenses and then made targeted cuts.

“With the state paying for less of what we do and the students paying for more through fees, we went back to our mission to identify what our students pay for that gives them the greatest benefit,” explains Giarusso, who chairs the board of the College and University Professional Association for Human Resources. “For us, as it might be for many public institutions, this approach was a real change in culture and thinking.”

*"With the state paying less of what we do and the students paying for more, we went back to our mission to identify what our students pay for that gives them the greatest benefit."

Jack Giarusso, University of Massachusetts Lowell

As the process unfolded, the chancellor held meetings with the full university community to explain the reasoning behind the financial decisions. Critical programs would remain. Programs deemed noncritical, based on their funding and direct impact on students, would not receive support.

For example, UMass Lowell declined to fund several programs related to K-12 schools in the area, including one that brought elementary students onto campus to see theater performances. Other programs deemed noncritical included a historical museum, several science laboratories that had received seed money from the university but had never achieved financial independence, and a college prep program geared toward lower-income students.

“These were all terrific, well-run, effective programs,” emphasizes Giarusso. “But as great as they were, they weren't critical to our mission—so we were prepared to live without them long term.” After factoring in program cuts and combining some functions, the university laid off 50 employees, or about 10 percent of its nonfaculty staff.

Revving Up Revenues

As part of its program analysis, UMass Lowell also focused on what Giarusso calls “the R word,” or revenue. Solid contributors to the bottom line, such as the university's continuing education program and international student admissions, were challenged to increase revenues. “We also looked at how we might start charging private companies for the use of some facilities, such as the university's inn and conference center or scientific laboratories,” adds Giarusso. 

The entrepreneurial bug has also bitten NASPA members, with many investigating how their institutions can better compete with for-profits that provide services to students. “We're also seeing a greater emphasis on fundraising and development, with student affairs looking to secure grants for the new initiatives they undertake,” reports Dungy.

While college stores have consistently generated income for their institutions over the years, the economic downturn has had a marked effect on that retail sector. “Many students are hard-pressed to come up with enough money because of the high price points for books,” says Brian Cartier, chief executive officer of the National Association of College Stores (NACS), Oberlin, Ohio. “They're finding alternative ways to obtain those course materials—such as purchasing from online competitors that may not have the right materials—or simply going without. Either way, students won't have as rewarding a college experience.”

To ensure that college stores continue supporting the academic environment and generating profits, the NACS Foundation commissioned a project to define the “College Store of 2015.” Based on the study's just-released results, expect to hear more from your college store's director about different ways to acquire textbooks (buy, rent, borrow, trade) in various forms (hard copy, print-on-demand, electronic). Technology promises to play an expanding role, as the stores use customer data for marketing activities such as generating personalized book lists and recommendations.

According to the College Store of 2015 project, your institution's store will look different as well. Imagine a flexible space that showcases course materials when classes begin, only to transform weeks later into an area that hosts events such as art exhibitions or poetry readings. The store might also incorporate a business or career services center, a cafe or snack bar, or even a small grocery section.

“The goal is for our stores to become dynamic collegiate retailers serving their campus communities in new and innovative ways,” says Cartier.

Silver Linings

To Baylor University's Orr, innovation and tough economic times naturally go together. As difficult as it is to make cuts, especially those that lead to furloughs and layoffs, she appreciates the creativity that flourishes when an institution re-evaluates and reassesses its activities and offerings. Budget constraints encourage a freedom to experiment and listen to ideas that might, in more prosperous times, fall on deaf ears.

“When things are going fine financially, you don't think much about doing things differently,” Orr says. “But when you need to tighten your belt, it's a good time to try something you might not have considered before.”

*Budget constraints encourage a freedom to experiment and listen to ideas that might, in more prosperous times, fall on deaf ears.

As an example, Orr recently stepped outside her comfort zone to investigate how Baylor might use alternative sourcing or cloud computing for some of its IT functions. As comforting as it may seem to the CIO to maintain control by keeping everything on campus, Orr sees potential cost savings and other benefits in shared services or creating clouds with other universities. She muses, “Maybe Baylor would host some disaster recovery servers for other universities, and they would do it for me. That's the type of thing that can easily be done with consortial groups.”

Among other consortia, Baylor belongs to the Texas Digital Library and the Lonestar Education and Research Network (LEARN). Although a consortium membership generally carries a significant cost, says Orr, “Working with other institutions enables us to build what we need for less than we'd be able to do ourselves. If there ever was a time to belong to a consortium, it's now.”

These days, says Hicks, vendors seem more amenable to partnering as well. In procurement, she sees greater willingness on both sides of the table to craft mutually advantageous relationships. “We're not just asking vendors to sell us the same things at a lower price. And vendors aren't just signing the contract and saying, 'See you in five years,'” Hicks notes.

At the University of Colorado, Hicks now meets quarterly with what she considers strategic vendors, to find out how the institution can assist them, and vice versa. In exchange for a longer-term contract, for instance, the university might get better negotiated pricing or invite the vendor to hold an on-campus event.

As an example, says Hicks, “We're doing a half-hour webinar with our scientific supplier so our principal investigators can see, without leaving their labs, why they should use the contract. That boosts the supplier's visibility with the people who actually use its products.”

The spirit of collaboration isn't reserved for vendors and other institutions. Dungy applauds the positive development of greater cooperation campuswide as often-shrinking staffs coalesce around common goals such as student retention, learning outcomes, and accountability.

Similarly, says Roberts, the either-you-or-me mentality that characterized previous recessions isn't evident with this one. “This time we're seeing coordinated efforts among the business office, student affairs, and academic officers. They're working together and thinking smarter about how to achieve the mission and goals of the institution, both in and out of the classroom,” he reports.

This higher level of cooperation, seemingly unique to this recession, might have a lasting influence when the recovery eventually occurs. In fact, in years to come, the current economic situation may be remembered as much for its depth and breadth as for the “we're all in this together” atmosphere it has engendered across institutions.

SANDRA R. SABO, Mendota Heights, Minnesota, covers higher education business issues for Business Officer.