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Systems and Shared Services

 

Church-related institutions should explore ways to cooperate and attain economies of scale across a wide variety of organizational services and functions.  Today's computer and information technology allows for new forms of collaboration that have never been available in the history of mankind--including linking colleges and universities together in mutually beneficial, cooperative relationships.
 

It was not long after I began teaching at my current institution when we arranged for an alumnus to address our business students.  In a relatively short amount of time, he had risen through the ranks of a major multi-national corporation to become a vice president.  His area of responsibility was not a traditional-sounding function.  It was not marketing, human resources, finance, or production.  He was vice president of “shared services.”  I had to ask him what shared services meant.

His company is huge—doing work in dozens of countries with tens of thousands of employees.  He told me that there are certain things that all of the divisions have in common and that he was responsible for coordinating all of those “shared” things.  According to classical management theory, the idea of a shared services person makes sense.  Fredrick Taylor, the Father of Scientific Management, hinted at such ideas when he proposed his Matrix approach to organizational structure in the early 1900s.

Rather than having workers and departments in each division doing the exact same things, such as ordering copy paper, the organization could have one department that could perform the service for all of the divisions.  This method increases the need for communication across the divisions with the shared services department, but with the efficiency of today’s communication and information technology, coordination and control of such activities can easily be done.  By combining orders and fulfilling the needs of many divisions in the corporation with a single unit, the shared services department can negotiate better sales and contract terms with service providers through the large order volumes from the entire corporation.  This method allows the company to reap the benefits of economies of scale in the area of shared services.

There has been a trend in my home state in recent decades to consolidate many of the independent public universities into several distinct university systems.   Where once there were many separate schools that stood alone and competed for resources and programs against each other, there are now several university systems with coordinating bodies that oversee the functions of the systems.   A coordinating body allows member schools to work mostly autonomously, but in a coordinated manner with other system members.  Systems have more political clout and power than individual schools and economies of scale can kick in for many shared functions.

Our church-related private institutions need to take a lesson from the system movement in public higher education and from the shared services function of the major multi-national corporation.  Most church-related institutions are quite small—some with no more than several hundred students.  Even our average-sized schools might have only one-tenth (or fewer) of the number of students of a single, good-sized state university.  If state universities with enrollments between 5,000 and 50,000 students find benefits in combining forces into a system, why don’t church-related schools that are substantially smaller? 

The biggest reason may have to do with a perceived risk in losing students or resources to other schools.   Schools might sense that working with direct competitors could cost them students, donors, and other precious resources.  It might also be related to the history of control that institutional boards of trustees have over their institutions—cooperating may be perceived as diluting their autonomy and perhaps losing some of the culture and unique identities of their institutions.   Whatever the reasons, the need to consider such actions has never been greater. 

Today’s information technology could allow a single institution to host and maintain the records and enrollment services of many member schools.  If mega-universities can effectively manage those services for 40,000+ students on a single campus, a flagship system institution could easily add the same services of the system schools to their enrollment systems.  A centralized information technology office could supply the network and computer processing needs for system schools from a single institution with smaller support offices at each member campus.  Faculty and staff payroll services could also be handled through a single, centralized payroll office—which would not even have to be located on a college campus (off-site, third-party payroll companies are quite popular with many small businesses).   With the wide-spread use of on-line banking and direct deposit, payroll funds could be transferred from a central off-campus office just as easily as from local on-campus offices.

By combining forces, institutions within a system could negotiate better terms on a variety of common services.  Insurance rates and benefits, office supplies and copy paper, computer and copy machine leases, utilities and phone rates, bookstore contracts, food service contracts, janitorial and maintenance contracts, campus security contracts, hotel and rental car discounts, credit card and rebate programs, and a variety of other services could be negotiated as a system without infringing on the culture, academic programs, or development efforts of the member schools.

Coordinating academic offerings and majors, developing articulation agreements for graduate programs or upper-division majors, sharing faculty through on-line or on-campus teaching, and creating cooperative academic programs are ways that cooperation could benefit the academic programs of member institutions.  A centralized development and grant-writing office could work for the benefit of all member institutions.  Donors might be more accepting of bigger appeals when their gifts have greater reach and benefit more people.  Recruiting students and faculty could even be conducted in a cooperative manner among system schools.

Today’s computer and information technology permits institutions and workers spread across great distances to communicate and work with each other in real time at minimal cost.  Many of the services that can now be shared among cooperative institutions have only become possible in the past decade.  The associations that link many church-related schools together today are well-positioned to begin such efforts, but they will have to change their focus and vision and see the financial and institutional benefits that arise from cooperation and coordination. 

 

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