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Business Officer Magazine
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New Ways to Create Savings

With more sessions to choose from than in any other category, this track addressed how to reorganize functions, systematically evaluate facility needs, cope with reductions in force, and keep up with technological advances.

A Data-Driven Approach

With budgets constrained by a tough economy, colleges and universities are taking a data-driven approach to prioritizing new capital investments and renewal expenses.

In a session titled "Making the Case for Capital Renewal: Strategies That Work in a Tough Economy," James Kadamus, vice president of Sightlines, a facilities management consulting group, provided an overview of financial challenges at colleges and universities—and strategies to help them meet their capital needs. Kadamus recommended that institutions keep detailed records of the age profiles of buildings, factors driving space needs, and stewardship costs; learn how to effectively use that information to inform facilities operations; and employ best practices to identify opportunities for savings.

Roger Bruszweski, vice president for finance and administration, Millersville University, Millersville, Pennsylvania, and Pete Michell, vice president for finance and treasurer, St. Mary's College of California, Moraga, illustrated how detailed recordkeeping and analysis have helped them make better use of existing facilities, prioritize short-term and long-term maintenance needs, and identify sound investments at their respective institutions.

Bruszweski described savings in finding the right balance of hours of usage per week. By increasing the use of existing facilities, he said, you can save on new construction costs. This, however, needs to be done with careful consideration of the increased stewardship costs in maintaining more heavily trafficked buildings.  

Michell analyzed the backlog in facilities renewal by identifying and prioritizing the needs by category. Which investments are needed to avert unsafe or hazardous conditions? Which ones are needed to bring buildings into compliance? Which investments will help make the institution a showstopper, giving it a competitive edge?

Transforming Admininstrative Services

As state funding for higher education continues to decline, institutions of all sizes can reexamine how they might reduce administrative costs as one way of coping with financial challenges. In a session titled "Administrative Services Transformation: Tips, Tools and Traps," presenters from two public institutions shared their experiences.

Ruth Johnston, associate vice president for strategy management and environmental stewardship, University of Washington (UW), and Rowan Miranda, associate vice president for finance, University of Michigan, said their institutions have recently experienced unprecedented declines: UW lost 50 percent of its state funds in the past three years.

Johnston and Miranda said it's critical for universities of all sizes, globally, to look for opportunities to reduce their costs and thus redirect resources to the academic mission. They highlighted nine tips and strategies that can help transform delivery of administrative services. Among them were learning to define issues up front and to communicate honestly without the use of jargon. Miranda also explained the increasing importance of identifying process improvement opportunities, especially as they relate to workflow, and carefully analyzing process fragmentation—that is, while processes may be standardized within central functions, they could vary greatly at the unit level.

(Recognizing the broad interest in administrative service delivery, NACUBO will host a webcast on this topic in the fall.)

A Strategic Approach to Purchasing

Purchasing is the second largest campus expenditure after personnel, according to a panel of procurement and finance professionals. So how can those campus leaders take a more strategic and collaborative approach to create savings? In a session titled "The CFO and Purchasing: Charting the Course to Success," Gary Wilson, vice president for business development at E&I Cooperative, moderated the panelists as they discussed their strategic approaches.

For the University of Missouri System, it has been a 15-year journey toward adopting a strategic approach to purchasing in order to realize cost savings. Centralizing the procurement operations for four campuses, then later including hospital procurement, provided the advantage of volume to achieve substantial cost savings, said Nikki Krawitz, vice president for finance and administration at the system office. "Decreasing costs without compromising quality is key," Krawitz concluded.

Procurement is viewed as far from a purely transactional system at Yeshiva University in New York City. Instead, it is considered to be a system where the software not only enables vendor payment, asset management, and data analysis, but it also tests for contract compliance. Mike Gower, vice president for business affairs and CFO, promotes use of the Banner procurement platform to Yeshiva researchers by reminding them, "We can make your grant go farther." Gower's maxim: Getting to people what they need, on time, is vitally important.

Two chief procurement officers shared lessons learned while working in corporate America before they took positions on campuses. Jack Zencheck, chief procurement officer at Yeshiva University, and William Cooper, associate vice president and chief procurement officer at Stanford University, Palo Alto, California, underscored the benefits of frequent communication and biweekly meetings with their CFOs.

Attendees were eager to hear how the procurement process can generate revenue. The panelists said that rebates from P-cards and storage room fees are two of the means most likely to generate income while spending wisely.

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