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Share and Share Alike

Shared services partnerships can be a boon to the bottom line, as well as a good way to establish relationships between institutions. Here are four rules that will help make these partnerships work.
University Business, Feb 2009

WIDELY USED IN THE PUBLIC SECTOR, "SHARED SERVICES" is based on the idea that one organization can implement a solution internally as well as extend access to other organizations. The solution might be anything from excess computing power, to enterprise resource planning or customer relationship management systems, to utilities that include power or phone systems.

Some higher ed institutions partner with other schools, but a number of shared services partnerships are in place that connect several campuses of the same university or college system. Either way, the benefits can be significant, especially when it comes to containing costs, and it’s likely that more IHEs will be doing this kind of sharing in the future as a way to keep budgets in check.

The strategy has some challenges as well as advantages. Experts in the field have noted that intracampus partnerships in particular can be fraught with cultural and political issues. Sometimes the amount of governance and oversight required isn’t worth the money saved or the relationships fostered.

Despite the potential glitches, administrators have found that—depending on the project—it can be worth the effort. For administrators looking to undertake a shared services partnership or streamline one that’s already in place, the following rules can help in making the most of the arrangement.

When sharing services involves numerous departments, budgets, and IT issues such as security, privacy, and access, it can be daunting to build the partnership and have it be effective. One approach is finding a simple project that offers a quick return on investment.

Purdue University (Ind.), for example, is sharing its unused computing cycles with other IHEs, including Indiana University, in an effort called the Diagrid Project. The software employed does all the work—essentially, turning the computing system into a supercomputer and allowing jobs waiting for computing time to get started on a machine while the user has stepped away—and there’s no cost to Purdue, notes the university’s CIO, Gerry McCartney.

"This is a great first project for a shared services model,” he notes. “The software is free, there’s a modest amount of system administration, and you don’t need to upgrade anything.”

Another major advantage is that the project allows Purdue and IU to establish a stronger relationship and explore collaboration without a great deal of project management or expense.

When bringing in multiple organizations, the service itself can be fairly simple as a way to create partnerships. An example is the first project launched by the Shared Services Consortium (SSC), a group equally owned by six Pennsylvania IHEs: Bryn Mawr College, Dickinson College, Franklin & Marshall College, Bucknell University, Gettysburg College, and Haverford College.

The group, which is a limited liability company owned by each of the schools, controls costs by pooling buying power with items such as local telephone services, class rings, and internet services. But the collaboration was kicked off with basic insurance (e.g., basic life insurance, long-term disability, property, general liability), since that was an area the schools found “noncontroversial,” according to John Shaddock, former president and CEO of the SSC. Schools didn’t have to change any policies or processes, he notes, making the shared service a good way to find out how everyone worked together.

“It’s important to establish the techniques of consortium building,” he says. “Trust between all parties needs to be created and reinforced, and projects that are less complex can help achieve that.”

Shaddock also advises that IHEs interested in partnering with other schools should match up with those that are roughly the same size, with relatively similar financial resources. “For one school, a $10,000 savings might be significant, but for another school, it’s not enough to warrant the shared services arrangement,” he says.

“Getting people to the table often means having them understand that lack of consistency is a problem,” says Stephen Konig, CRM product line manager at Blackbaud, a provider of CRM applications. “And getting to that level of dialogue often requires a champion at the institute level.”

That champion might be a president, or head of a fundraising foundation, or the CIO, depending on the institution, but receiving a type of mandate from top administration can be helpful for setting a larger mission, as administrators at Florida State University know (see “Case Study”). Even with a consortium group like the SSC, it’s vital to get high-level buy-in, advises John Fry, president of Franklin & Marshall. Having a very active president “prevents breakdown at the middle management level. As a consortium we’ve enjoyed significant success because we’ve had that involvement.”

Also vital is developing a support structure to handle any technology changes, upgrades, or system training, adds Chris Davia, a global education industry architect for IBM. “In some cases, when things happen from the top down, there’s resistance. So, in my opinion, the key might be to find support on the ground with a network of advocates, made up of the people who are working with faculty, staff, and students.” So while a partnership might benefit from buy-in from above, daily support and management from other levels is key.

Vendors, too, should be in the mix, but Davia believes they don’t need to be offering assistance and input indefinitely. A shared services group might be in place for years, but that doesn’t mean a vendor has to be involved for that long. “We always make sure there’s a transition plan,” says Davia. “That helps to make sure they can support themselves in the event that they want to do something else or go with another vendor.”

Bringing several departments, campuses, or schools onto one system usually means changing from an older system, and that kind of shift can cause tension, says Sherry Amos, a higher education industry principal at SAP. She points to a recent switch at the University of Mississippi, which brought two campuses onto the SAP system. “There was less of a technological hurdle and more of a cultural hurdle,” she says. “It’s not enough to just set an objective and assume everyone will get along. It takes constant focus.”

Shared services allow processes and systems to be standardized, but such a transition can become contentious, leading to resistance from those using the new system. Rapport needs to be built among the different groups, Amos advises, and relationships have to be fostered. One way to achieve this kind of streamlined collaboration is through the appointment of key people who are known throughout a campus. “Usually, if you have a few people on a project who can instill trust, it’s easier to establish leadership,” Amos adds.

That approach can keep group participants on track too, says Theo Bosnak, senior director of higher education at Oracle. “People will come up with 20 different reasons as to why a project won’t work. So you need someone to move it forward all the time, to be deliberate and consistent.”

Another effective tactic is to standardize training and then make it mandatory. Amos has seen computer-based education work very well, giving system users a basic understanding of a new project but allowing them to do training at their own pace.

Consultants can be useful too, since they provide a neutral perspective and can see any squabbles with an objective viewpoint. Consulting people from other institutions who have worked in shared service arrangements before is especially helpful, since they can articulate which strategies have worked and—more importantly—haven’t worked.

Finally, creating a centralized helpdesk can help establish a feeling of support and allow IT staff to spot trouble areas early. “People are somewhat resistant to change,” says Amos. “It takes reinforcement on several levels to get them comfortable.”

Although rapport-building may be somewhat informal, in terms of casual discussions and meetings over lunch, there’s a need for the shared services group to have a healthy amount of structure, including the development of service level agreements (or SLAs, contracts where the level of service is formally defined), governance policies, and possibly a board of directors.

'It's not enough to just set an objective and assume everyone will get along. It takes constant focus.' -Sherry Amos, SAP

For example, in 2000 The University of North Carolina created a Shared Services Alliance to explore collaborative opportunities across its 16 campuses. The Alliance Advisory Board spearheads the effort, and there’s a representative from each campus, appointed annually by the chancellor. Meetings include presentations from members, a coordinated technology management group that proposes new projects, and agenda items such as discussions on collaborative procurement, notes John Smith, UNC’s interim director of shared services. “The board structure is beneficial, because you get very effective discussions taking place, and then people begin to develop synergy.”

Among the universities in the SSC, there are smaller subgroups that operate in much the same way, explains Annette Parker, vice president and treasurer of Dickinson College. For instance, one group meets just to talk about workers’ compensation issues and purchasing of shared insurance policies.

Any collaborative group should develop shared policies, timelines, and establishment of what might constitute success. “The big question at the end of the day is whether money is being saved,” says Todd Heckman, managing director at SMART Business Advisory and Consulting, where he is the practice lead for higher education. “Not all projects reduce headcount or save on purchasing, and sometimes there’s even a perception that a shared project might be diluting a school’s competitive advantage.” These are all topics to examine before and during a partnership, he says, rather than having these issues crop up as a project is faltering.

Even with formal boards and governance models, though, it’s important simply to forge strong relationships, Parker says—keeping in mind that shared services arrangements can last for years and involve numerous projects.

“It’s all about building consensus and finding benefits, like better service to students and increased purchasing power,” she explains. “There are wonderful advantages, and even though it’s always challenging to bring together different institutions, in general, it’s usually a win-win for everyone.”

Elizabeth Millard, a freelance writer based in St. Louis Park, Minn., specializes in covering technology.