Making the Most of a State's Education Investment
Gov. Mitch Daniels recently implored Indiana's public college trustees to maximize efficiencies and cut administrative costs. Instead of coming to the "Statehouse asking for more money," as he stated, trustees should "stay back at the school and find ways to be more efficient with those dollars." As the president of Indiana's largest public college, I applaud the Governor for acknowledging how critical it is to manage costs as our state faces serious budget challenges. And we all have put some recent efforts in place, under the guidance of our trustees, to cut spending.
At Ivy Tech Community College, cost cutting is such a high priority, it's one of four key strategies articulated in our strategic plan, Accelerating Greatness. It is more than just a commitment to future administrative efficiencies—it is a reflection of significant cost-cutting efforts put forth to date, including:
- Outsourcing bookstore management. An eight-year agreement with Follett to manage 27 bookstores will reduce administrative costs associated with operations. The agreement included a $6 million signing bonus for the college and $1.65 million in renovations to existing facilities. Improved store performance has resulted in over $3 million per year operating income. Students are benefitting from improved service and an estimated savings that could reach as much as $10 million annually by Spring 2012 through the sale and buyback of used textbooks and Follett's rental program. These savings wouldn't be possible without faculty support to reduce ISBN variability in each course.
- A statewide agreement with Dell. A three-year partnership allows for discounted pricing on laptops and desktops. By selecting Dell to help simplify IT and make it more accessible and affordable, Ivy Tech is saving more than $1.3 million annually.
- Consolidation of copiers and copier services. A five-year contract with IKON Office Solutions, a Ricoh-owned company, will save more than $2 million total.
- A statewide call/fulfillment center to manage communication with prospective students. During a period of unprecedented enrollment growth, Ivy Tech awarded The Jackson Group a two-year contract to assist in launching a statewide call/fulfillment center to improve the ability to leverage communication technology advancements. It saves more than $250,000.
- Furniture buy consolidation. Three-year contracts with 10 suppliers, five of which are MWBEs (minority and women-owned business enterprises), have been established to support college requirements for more than 160 furniture items. These contracts will save more than $1 million per year.
- A Guaranteed Energy Savings Contract. The college will replace inefficient boilers, lighting, and other energy consumers and controls at its Indianapolis campus and deploy PC energy management software statewide. Savings of $10 million over 20 years on a net present value basis are anticipated.
Overall, since 2008, Ivy Tech has improved purchasing practices to create nearly $19 million of one-time savings, plus $12 million in recurring annual savings. Even more important than these bottom-line savings are what they enable: We recently hired nearly 300 faculty and staff to accommodate our growing enrollment?and we did so without adding to our budget. The new employees aren't administrators; they're faculty and staff who work directly with students.
Our trustees understand this connection between cost savings and growth. Ivy Tech also recognizes that its role as the state's largest workforce development provider means that state support represents an investment in Indiana's future, and we're confident we offer an unparalleled rate of return. As more students complete degrees and certificates, they'll acquire the improved skills that in turn fuel increased private investment and the growth of our tax base. This is not only the best way for the state to recover from the challenges it faces—it is the only way. Ivy Tech stands committed to doing its part by continuing to serve as a good steward of resources and a champion of operational efficiency.
Thomas J. Snyder has been president of Ivy Tech Community College (Ind.) since 2007.