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Vice President Kevin Hegarty defends "shared services" plan

Kevin Hegarty, the Vice President and Chief Financial Officer for The University of Texas at Austin talked to The Horn about the recent controversy surrounding the newly proposed "Shared Services" plan. He addressed concerns and gave a more in-depth perspective at what students, faculty, and staff at UT can expect

Centralization, privatization, outsourcing and 500 job cuts.

These are the words still being muttered around The University of Texas at Austin campus in reference to its recently proposed fiscal policies. With a recession that still haunts the job market, these words -understandably, carry quite a bit of weight, especially when talking about the University of Texas system’s flagship university.

At the center of all the ruckus, is UT’s draft of its proposed “Shared Services Plan” which proposes a four to five year tentative timeline for consolidating finance, personnel, information technology (IT) and purchasing functions scattered among various college department units into a centralized system in which multiple college departments can “share” these services.

The kicker, however, is the fact that the “consolidation” would come at the expense of UT eliminating 500 jobs that it deems “inefficient” or “unnecessary”. Understandably, some members of the UT community responded negatively, doubting both the intention and the effectiveness of the plan.

In particular, The Texas Employers Union (TSEU) was one of the more vocal groups among those criticizing the plan. The employers union even beat UT to the punch on Oct. 11 by breaking news of the proposed plan through local media three days before the university had a chance to publish its draft. Later that same day, UT published a press release on its official website and wrote that UT had “no plans for immediate staff reductions.”

According to the draft that was released Oct. 14, the plan would be a part of a larger university effort called the “Smarter Systems for a Greater UT”. In January 2013, President Bill Powers wrote a letter addressing UT’s faculty to complement a report presented by the Committee on Business Productivity regarding the campus initiative.

“This will start a process and dialogue about their recommendations,” Powers wrote in his letter. “Decades from now we will look back on this moment as a turning point in our ability to serve all of our constituents better and focus even more of our resources and energy on our core mission.”

Powers also wrote that the decision the initiative came with the recognition that the UT was campus “development” is now a “greater challenge”, adding that the “recession” had “constricted” UT’s investment income. The president also wrote that the initiative would also be a chance for UT to “discuss the report in more detail.”

TSEU’s operations coordinator, Seth Hutchinson spoke to The Horn about the source of his concern and reiterated what aspects of the proposed plan he saw as detrimental to the well-being of UT’s faculty, staff and students.

“There is no real data to back up the effectiveness of the plans given the large sum of money that is being spent upfront to implement them,” Hutchinson said. “We have asked the university for more details that we have not been given.”

While criticizing the legitimacy of the recently proposed plan, Hutchinson also questioned the initiative and the blessing it received from Powers, saying that UT’s investment in the initiative is troubling.

In reference to Powers’ January letter to UT faculty, Hutchinson said the move to “streamline” administrative services within the university is one more step toward total privatization. He also told The Horn that he thinks further privatization of the campus would immediately impact students, potentially increasing the cost of housing, food and parking.

“Introducing private vendors on campus with private interest means the quality of services provided to students would go down,” Hutchinson said.

In light of these concerns, Kevin Hegarty, UT’s Vice President and Chief Financial Officer, sat down with The Horn to speak in-depth about his office’s decision to present the draft to the president.

“I realize that headlines are written to grab eyeballs, but the truth of the matter is we are trying to rethink the way we deliver certain administrative services,” Hegarty said.

Hegarty criticized the current system and said many department employees are expected to learn and perform all the various administrative functions of their respective departmental units. In addition, Hegarty said the current system lacks a uniform method of training these employees, and instead depends on the individual department to train its staff with the resources at their disposal to the best of each department’s individual needs.

The result, according to Hegarty, is an inefficient system that wastes time and money that could otherwise go towards research or faculty retention. Hegarty said that he expects the quality of certain university functions would improve from hiring individuals who “specialize” in specific services.

“We think we’ve come up with a plan that albeit requires substantial investment but potentially has substantial payoffs something in the neighborhood of 30 to 40 million dollars a year.”

In addition Hegarty said the program could “improve employee job satisfaction by providing better career paths and training to employees.” Hegarty said he believes that because these centralized functions would ideally require that each employee specialize in a certain area, he or she could use the experience to better accommodate their career paths.

In addition, he told The Horn that the Shared Services program would not be a “cure-all” solution to UT’s tight budget. In addition, he said the program would study which functions could not be replaced with a new and more centralized system.

For example, Hegarty said that functions like recruitment will not be one of the 500 jobs that UT would aim to rid of as a means of saving costs. Instead, the program will target certain areas that either cause inefficiencies or operate under an outdated systems.

“Our natural inclination on campus is and will continue to be to insource,” Hegarty said. “Our people here really do know what they are doing.”

Still, Hutchinson says that the university’s claim that streamlining administrative positions will lead to more efficiency will prove to be false.

“Regardless of the technology the university uses the amount of work to be done will remain the same.” “Decreasing personnel will just mean a decrease in the quality of service provided to students.”

Hegarty also emphasized that consolidation had taken place already within several colleges. Currently the McCombs School of Business as well as the College of Liberal Arts at UT have started consolidating certain services like Information Technology into a system where all departments of the college share these functions.

According to Jamie Southerland, Assistant Dean for Business Affairs at UT’s College of Liberal Arts, the faculty response to the change has been “positive.” He also said that because faculty members experience less difficulty getting what they need from a shared system, they can have more “free time” for research.

“The less administrative service faculty has to deal with, the better,” Southerland said.

In response to criticism that the university has not been transparent with their upcoming plans, the Shared Services Committee has launched Campus Dialogue a round of campus community forums to discuss the draft findings and recommendations and garner additional feedback and perspectives.

According to their Transforming UT website The Shared Services Project team will present on the agendas of several campus groups including campus governance groups, faculty, IT governance groups, staff and students during their scheduled meeting times.

The themes that emerge during the Campus Dialogue forums will be reflected in the recommendations and will become part of the final report shared with President Powers for his review and consideration in early 2014.

The shared services team encourages students to submit questions and comments via e-mail, or through the Shared Services feedback form. The form and additional information including the complete draft of Shared Services Plan can be found here.

There have been corrections made to this story for accuracy.

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