The PowerPoint shows an academic support generalist at his desk, surrounded by computer, calendar book, telephone and paperwork, and nine tasks as depicted by captions:

“Greet Danish exchange students. Transfer funds between PI’s projects. Reconcile central HR report with departmental records. New employee network password. Travel and hotel for Singapore conference. !@$!& Out of cartridge toner, again! Cover for vacationing payroll specialist. Emergency photocopies for professor. Process H1-B visa from Kazakhstan.”

“As this slide depicts … we’re asking people to do, really, I think, at this point, too much,” Associate Vice Chancellor Karen Hull said this week during an open forum on the planning process for the establishment of shared service centers.

More than 250 people attended the June 29 forum in the Activities and Recreation Center Ballroom. Advanced Technology Services presented the forum as a webcast — and more than 200 computer users clicked it open. The webcast recording is available for on-demand viewing; the links for various file types are below.

Shared service centers are a key component of Chancellor Linda Katehi’s Organizational Excellence initiative, intended to create an administration that is “lean, effective, transparent, service-oriented and innovative” — in response to budget shortfalls totaling more than $150 million over the last two years alone.

Under the shared service center model, employees with common tasks work together, with economies of scale as a benefit, greater efficiency as another.

The organizational change also acknowledges the hundreds of layoffs that have occurred over the last two years:

“You just can’t do the same work with less people,” said Kevin Church, a director with ScottMadden Inc., the consulting firm that is assisting UC Davis on the shared service center project.

“You have to take work out of the system,” he told the forum audience. “And the way you do that is, you change the process, or you enable it with technology that will allow people to get access themselves without having to go through other people.”

Areas of opportunity

The shared service center planning process is focusing on three areas of opportunity within “purely administrative operations”: human resources, accounting and information technology. The project also is collecting data in the areas of development, communications, research administration and gift processing, for possible organizational changes.

Today, a lot of this work is decentralized. It came to be this way because of the campus’s organic growth, said Hull, who directs Human Resources and leads the shared service center project.

“Our administrative structure grew to support local operations,” she said. “And that service model has a lot of strengths, but it’s also a service model that’s difficult to continue when you have the level of budget reductions across our campus.”

Those reductions, in 2008-09, 2009-10 and as forecast for 2010-11, amount to 30 percent in administrative units alone — a total of $79 million.

During this same period, academic units will have suffered total reductions of 15 percent. The chancellor’s shared service center mandate does not apply to academic units, but some of them are clustering their administrative services as a way to save money.

With the ongoing budget woes, coupled with enrollment growth of nearly 25 percent over the last decade, academic and nonacademic offices are doing more work with fewer people. Also, in many cases, offices are working with outdated technology.

More work, more mistakes

All this can lead to mistakes. Take payroll, for example. Under the campus’s existing set-up, about 1,000 people have access to the payroll system (which, by the way, dates back to 1984 — older than some of the people attending the forum, Hull pointed out).

On an average day, Hull said, the campus sees a 10 percent error rate in payroll transactions. The error rate grows to 50 percent in unusual payroll circumstances, say, when figuring imputed income for cell phones.

Payroll errors can be costly. Consider the process by which the campus cuts off health plan premiums for employees who leave the university work force or take leaves of absence. When the timing is off, the campus pays more than it should — more than $500,000 annually.

“I want to emphasize,” Hull said, “our staff work incredibly hard. They are incredibly smart, diligent and committed to service. No one makes a mistake because they want to make a mistake. They make a mistake for other reasons.

“And, so, the fact that we have a 10 percent error rate, I make that comment without judgment. But just to say that when we have a 10 percent error rate that means someone upstream is correcting that error.”

She said staff members also work in a highly complex environment, with a wide variety of policies and laws. In addition, employees may have difficulty recalling the skills and information that are needed to address issues that come up only infrequently.

More training is a solution, Hull said, but, as the campus has grown, this has become more difficult. Not only are there more people to train in more topics, but, in the decentralized service model, employees are working farther and farther afield.

More decision-making authority

This is where shared service centers come in. Beyond making training more accessible, the university also sees an opportunity to eliminate unnecessary redundancies and streamline procedures, with automation when possible, and to give people more power to make decisions at lower levels, instead of sending matters farther and farther up the chain of command.

The way things work now, said Church, citing preliminary data from 1,550 employee surveys and 100 interviews, upper-level managers spend too much time handling “transactions” and answering questions, when these managers ought to be focusing on more value-added activities such as strategy, research and analysis, and management.

He gave two examples:

• Computer programmers who cannot do their programming because they are working the help desk, because there is no one else to work the help desk.

• Senior accountants who are trying to figure out why an invoice was not properly paid because it was not coded properly the first time.

“These are (the) types of things that make it difficult for the senior people to get efficient processes of their own done, because they’re working on transactions and other things that just … take away from their normal day,” Church said.

The data are still being validated and do not represent all of the people doing all of the work assignments that are being reviewed. A final, revised set of numbers is being prepared — and will be made available to the campus community.

Fragmentation of duties

The initial data, however, clearly demonstrate the fragmentation of people’s time across multiple functions in Administrative and Resource Management (the result of the merger of the Office of Administration, and the Office of Resource Management and Planning); Information and Educational Technology; Student Affairs; University Relations; the Office of Research; and the Offices of the Chancellor and Provost.

Based on the latest numbers, the data show:

• 645 employees engage in human resources-related activities, while the total effort of these people equates to 309 full-time equivalent positions.

• 703 employees are involved in finance-related activities, while the total effort of these people equates to 369 FTEs. Total labor costs: $19 million.

Church said he and his team heard stories about five or six approvals for purchase orders, when they should have been approved the first time. “When you hear about the movement of invoices to get something paid, how it has to be transferred, then sent to another central mailroom, then mailed to central finance, then sorted, and all this, it’s handled three or four or five times just to get it to paid, and then, at the very end, it’s reviewed again.”

“There’s a tremendous amount of effort, and there’s a lot of reasons behind this,” Church said. “The process is the process. It’s been evolved over time. People have put in mechanisms to make sure the mistakes don’t happen.

“Is it a lack of trust? I don’t think so, but it certainly can be perceived as that.”

Duplicative efforts are costly elsewhere, too, particularly in computer application development, with people in different departments and units working on the same kinds of projects. Total labor costs for 450 FTEs: $37 million.

Taking cost out of the process

“When you centralize and put activities into a shared service center, you end up getting the economies of scale, the synergies,” Church said. “You’re getting more focused processing that enables … a more trusting environment, and it allows for a lot of these redundancies and additional approvals, additional paper flow, to be pulled away.

“And that’s how we’re going to take cost out of the process.”

People will also be removed from the process. “We will have an organizational structure that has fewer staff,” Hull said, noting that the savings goal has been set at 20 percent.

“We are doing everything possible to mitigate the impact to staff,” she said after the forum. For example, in anticipation of shared services, administrative units are not filling many positions if they become vacant — thereby preventing layoffs.

But make no mistake: People are getting laid off, more than 300 full-time employees in 2008-09 and 2009-10. During the same period, about 400 positions have been eliminated by attrition.

As budget problems continue, Chancellor Katehi has set a fast pace for shared service centers. Church and his ScottMadden consulting team are nine weeks into a 12-week contract (for which the university is paying $420,000), and Katehi aims to see a pilot project up and running by winter quarter, for human resources and accounting.

A shared service center for IT could be established by spring or summer of next year, Hull said.

On the Net

Organizational Excellence (including a mechanism for feedback)

Shared service centers forum webcast, June 29:

• Windows Media Player

• Flash Video Player

• QuickTime Media Player

PowerPoint from the shared service centers forum, June 29