BG.99.03, Budget Committee Response to and Critique of S3
UNIVERSITY OF ILLINOIS
AT URBANA-CHAMPAIGN
Senate Committee on the Budget
180 Henry Administration Building
506 South Wright Street
Urbana, IL 61801-3621
November 25, 1998
Richard Schacht, Chair
Senate Council
105A Gregory Hall, MC-468
Dear Dick,
The Senate Committee on the Budget has carefully reviewed the "S3 Strategic Plan for Administration" (October 9, 1998). We commend the overall goals of increasing the efficiency and effectiveness of University administrative services and support a number of specific proposals, such as consolidating payroll administration and financial accounting systems, as well as devising a well-conceived data warehouse. Additionally, we encourage efforts to examine and improve human resource management of Civil Service staff positions. And, consistent with the plan's objectives, we also note our expectation that the new UIUC budgeting system will enhance increased accountability based on performance measures on our campus.
We are deeply concerned, however, about major deficiencies in several areas:
1) Understanding academic mission and diversity. A number of recommendations and tactics demonstrate a profound and troubling lack of understanding of the academic mission of the University of Illinois and its diverse campuses. The University is not a business, and while the adoption of some business practices may increase efficiency and effectiveness, the administrative needs of the University should be balanced against the academic needs of the campuses. In our view, each campus should be permitted to run its affairs independent of the other two campuses. We believe that the three campuses will be best able to fulfill their distinct missions with the support of a Central Administration that recognizes and promotes the autonomy of each campus.
2) Cost. Because the strategic plan lacks cost-benefit estimates, the Budget Committee regards many claims of cost savings as dubious at best. For a campus that has lost a significant number of faculty over the past decade, the administrative increases implied in this document are difficult to justify. At this point, administration should be expected to enhance its efficiency and effectiveness with fewer resources. Regardless, any potential projects should be prioritized according to cost savings and increased benefit to the University.
3) Constraints. The S3 report appears to be oblivious to the Civil Service regulations and other state laws that constrain flexibility in managing non-academic staff, including reward-systems based on performance and additional benefit options. We urge the Central Administration to assume a pivotal role in advocating legislative changes that would remove constraints to a more efficient and effective work force, allowing the campuses to better serve their stakeholders.
4) Accountability to academic units. Throughout the S3 Report, suggestions are made that will lead to the centralization of a significant number of administrative functions within the University. As this runs contrary to the goals of Budget Reform, we are concerned that implementation of these recommendations will undermine the accountability for services now provided by administrative units for academic units on our campus.
5) Customer service. While the rhetoric of the S3 Report emphasizes service to our stakeholders, our reading and detailed analysis of the document suggest that many of the recommendations will do little if anything in this regard, and others will alienate key stakeholders. We concur with the President's desire for reduced University bureaucracy; however, this plan appears to endorse changes that will effect just the opposite.
The Budget Committee has grave concerns about the rapid implementation of a strategic plan with these serious deficiencies. We are convinced that such significant changes in University and campus operations will be successful only with the explicit support of all three campuses, and we are pleased that the S3 Report recognizes the importance of achieving consensus prior to implementation. The manner in which Budget Reform was developed and openly-communicated on the Urbana-Champaign campus serves as an excellent model for successful implementation of a strategic plan. In the absence of wide-spread support, premature adoption by the Central Administration of any major initiative will likely meet with resistance and undermine its intent.
Sincerely,
James L. Robinson, Chair
Jason Accola
Jimmy Clark
Stephen D'Arcy
Sarah Quoss
Linda Smith
James Ward
Walt Tousey, ex officio
Alison Schmulbach, PAC Liaison
c: Michael Aiken
Richard Herman
Critique of S3 Report by Budget Committee
Summary
November 16, 1998
Strategy 1 Develop and maintain a highly competent and adaptable workforce.
Desirable goal.
Central screening of candidates would not be useful (1.1); labor pools differ by location and by employee category. Maintain a searchable database (resumes on line) that includes information about quality applicants not chosen for a particular position-by campus-would be useful. Improve ties to our own graduates as potential candidates.
Because longer-term advancement may require a degree, UIUC and Parkland College offer better opportunities for development than a University-wide training program (1.2). Tap in-house expertise for managerial development and human resource development initiatives-some tools are already in place and could serve as a resource in lieu of hiring additional consultants to provide development seminars.
Any performance evaluation system (1.3) must be tied to a rewards system. Merit systems should be implemented locally by departments. Institute changes in policies (including relevant State laws) to permit a flexible system to reward performance (1.4). Identify areas of high turnover-use exit interviews to understand and address problem situations. Expand benefits and services available to employees that are designed to improve the University working environment.
Strategy 2 Create a customer-service framework for delivering high quality administrative services.
In a public institution, customer-service may not go far enough; we need to consider our stakeholders as our owners, not our customers. A public sector model would be better than a private industry model. Some of the stakeholders are internal, others external; this distinction is lost in this section. This strategy lacks specifics for achieving the desirable goals. In 2.3.3, it is a little naive to suggest that "line" employees could ever be empowered to make many decisions-such as getting a student into a closed class, or getting an employee a lost paycheck. They should be as helpful as they can be, as by referring to someone with the authority to open a class or to replace a lost paycheck.
Strategy 3 Critically re-evaluate the definition and design of administrative processes.
The references to Microsoft and other private entities as examples in this section are particularly out of place. We are not a "business" engaged in a profit-making enterprise. This section fails to make clear how decisions would be made and who would make the decision. This section clearly looks on consolidation into a single location (3.2.2) as a de facto increase in efficiency, despite the differences in location and context for our three campuses. The UFAS system and AISS stand as clear failures in such centralization. No cost estimates are made and priorities are not specified.
Strategy 4 Create a new organizational structure that supports the University's administrative strategic direction.
The creation of a new structure will divert attention from the service function, which is where the attention should be focused. Prioritization in the reorganization is lacking, as evidenced by use of term "as appropriate" in 4.1. The reorganization of human resources (4.2) fails to take into account the variety of appointments, whether academic staff or civil service. Recommendation 4.3 could have merit; centralization could be effective. Recommendation 4.4 raises the question: Would we rather have AISS or CSO in charge of information technology? CSO wins hands-down. The change enablement "police" seems very heavy-handed. Reorganization plan put together with little understanding of our institution and without much effort to build a consensus. Plan emphasizes centralization, rather than decentralization closer to the ultimate stakeholders. Plan would appear to increase costs and decrease our efficiency, at least in the short run. No action is better than any action. Centralized recruiting (4.2.1) is particularly ill-suited to our situation. Changes in civil service law would be required for some reorganizations (4.2.2). Centralized customer service number for the entire University (4.7.1) is totally without merit-would make us less stakeholder-friendly, rather than more. Dual reporting of business managers would be highly disruptive. Reorganization would require more administrators, not less, which would ultimately mean fewer faculty. No cost benefit analyses have been made.
Strategy 5 Implement an institution-wide approach to using and managing informational technology.
Unlike UIUC CAT, we oppose the idea of a new chief information officer. We have several administrators who on paper could fill the role already; at the very least, this should be a limited (3-year), temporary appointment reporting to VP Manning. In this fast-moving area, central control would become an impediment to implementing new technologies and software; future should be buying off-the-shelf applications, rather than developing our own, such as UI-direct-not user-friendly and not up-to-date.
Strategy 6 Enhance decision making and performance improvement by creating and sharing organizational information and data across the University community. (That is a mouthful.)
The differences in campuses (context and culture) are not considered. Who will be using the info, how will it be used, what are priorities, who will pay for?
Strategy 7 Implement performance-measurement systems that are aligned with the University's administrative goals and strategies.
Centralization would go counter to Budget Reform on this campus, undoing academic unit responsibility and removing administrative units from need to answer to academic units. Burden of accumulating information for the benefit to be derived. More data accumulation calls for more analysis of the data, more reports to be requested. Performance is quality, not just quantity.
Strategy 8 Proactively manage the University's relationship with external entities.
Working within the Civil Service system may not be enough; we need changes in state statutes. We are skeptical of UIUC CAT response that many recommendations regarding Civil Service are already being addressed-perhaps around the edges this is true, but the fundamental rigidity remains.
Report fails to understand the difference between public sector organization and business. It should be noted that outsourcing (mentioned here and elsewhere) leads to increased propensity for corruption and unethical behavior and that this can affect public sector employees when the organization moves to privately-oriented values as opposed to civically-inclined values (Jossey-Bass, The Spirit of Public Administration, 1997). While this should not stop outsourcing, it is a risk that should be addressed as we proceed along this path.