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Malcolm Gillies - Out-sourcing: The way forward for higher education services?


Presentation from Professor Malcolm Gillies, Vice-Chancellor, London Metropolitan University, to the SCONUL Conference 20-21 June 2013, Dublin

Presentation from Professor Malcolm Gillies, Vice-Chancellor, London Metropolitan University, to the SCONUL Conference 20-21 June 2013, Dublin

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  • 1. Outsourcing: The way forwardfor higher education services?Malcolm GilliesVice-Chancellor, London Metropolitan UniversityChair, London HigherSCONUL Annual Conference, Dublin, 21 June 2013
  • 2. National site licence:the need to share• “Declining budgets within universities• Volatile exchange rates affecting purchase of journals• The costs associated with the transition from hard copyto digital communications• Relationship between publication and tenure/promotion• Copyright issues and restrictive licensing of electronicinformation”(Source: Gillies, Coalition for Innovation in ScholarlyCommunications press release, December 1999)
  • 3. Why London?• 8 million people• 500K post-secondarystudents; 94K staff• 100K international students• 40+ publicly-funded HEIs,£5bn turnover, £12bn value.• Government estimate of c.£500M possible servicessavings• Growing private providers,and HE in FE• 25-30% of national researchIf anywhere canengage in sharedservices on asignificant scale, itshould be London
  • 4. Key Findings: 2010Grant Thornton studyHEIs in London sceptical of sharing services;specialist HEIs most interested. Not hungry?Current Shared Services• Mainly front office• Lack of understanding (cf.outsourcing)Real Benefits• Quality and resilienceMyths• It will solve all my £ worries• It reduces my competiveness• VAT makes it not worthwhile?• It has to be with another HEI26%5%35%34%OutsourcingJoint VenturesJoint PartnershipsMembership Organization
  • 5. Shared Services“Services required by more than oneinstitution, which have been managedinto one entity or extended to servemultiple institutions from one host inorder to improve service quality and/orefficiency.”
  • 6. London Sharing – theAppetite: more and lessHigher appetite: HR andtraining, ICT, Procurement, Finance, Facilities management, Studentadministration, Researchmanagement and supportMedium appetite: Professional services(e.g. legal), Student support andexperience, Library services, StudentaccommodationLowish appetite: Health andsafety, Marketing, Audit andcompliance, Academic estateLow appetite: Teaching andlearning, Research (core purposes)Source: Shared services feasibilitystudy, Grant Thornton for LondonHigher, 2012A great variety ofappetites; a highdegree of caution anduncertainty
  • 7. Proportion of respondents expressing an interest in medium term (1-3 years)implementation0% 10% 20% 30% 40% 50% 60%ResearchTeaching & LearningAcademic EstateAudit & ComplianceMarketingHealth & SafetyStudent AccommodationLibrary ServicesStudent Support & ExperienceProfessional Services e.g. legalResearch Mgt & SupportStudent AdministrationFacilities managementFinanceProcurementICTHR & TrainingPercentage of respondentsQuestion 5. For theshared services youare interested in, whattimescale would youconsider asreasonable/ feasiblefor implementation(considering existingcontracts, costs of exitand any othermatters)?
  • 8. Three factors in rethinking sharedservices1. Making the most of the VATremoval to gain critical mass forselected services offered acrossinstitutional boundaries, andthereby, returning the savings tothe sector itself, rather than tothe taxman or the privateprovider.(Times Higher Education, 12 Jan. 2012)
  • 9. Three factors in rethinking sharedservices2. Conceiving of shared servicesmuch more broadly across thebands of appetite – not just thelowest-hanging fruit among thehighest-appetite services.(Times Higher Education, 12 Jan. 2012)
  • 10. Three factors in rethinking sharedservices3. Rethinking administrativeprocesses in a profound, ratherthan incidental, way. I meanthrough simplification ofservices, optimising ofprocesses, maximizing the use ofinter-connected technologies, aswell as achievement of economiesof some scale.(Times Higher Education, 12 Jan. 2012)
  • 11. Legacy Administrative ServicesAt London Met . . . we have recentlyopted for rapid, across-the-board re-engineering of up to seventyadministrative functions, some with upto one hundred separate process steps.Why? Because we reckon we (alongwith many other universities) spend toomany pence in every pound uponcumbersome, legacy administrativeservices.(Times Higher Education, 12 Jan. 2012)
  • 12. New-Era Shared Services?Working with externaloperators, London Met wants to gofurther: to realize a model of new-erashared services which otherinstitutions may want to adopt, or tojoin. And so to be one of a growingnumber of universities dedicated toproviding top educational value for aninvestment more affordable both tothe student and the taxpayer.(Times Higher Education, 12 Jan. 2012)
  • 13. Shared services initiative, 2012“[London Metropolitan] University seeks a strategic partner whowill work with us in three stages:(i) to review the existing administrative business processes of theUniversity, deploying proven expertise to maximise performanceimprovement and transform administrative processing;(ii) to develop and deliver a shared services partnership to deliverthose transformed processes to the University, deliveringcontinuous process improvement and cost-savings forreinvestment;(iii) subject to confirmation of the business case and the FinanceBill 2012, to develop and deliver a shared services proposition tooffer to other higher education providers.”(Call for tenders, 1 February 2012)
  • 14. Possible shared services, 2012“The administrative services concerned include:— Information systems and services, providing IT infrastructure and day-to-day supportto staff and students of the University,— Registry services, providing student record maintenance from application through toaward and alumnus,— Library facilities,— Estates, including infrastructure provision, facilities management,— Finance, including financial record-keeping and provision of regular information fordecision support,— Procurement support,— Planning, providing support for decision-making using multiple data sources fromaround the University,— Student services, including counselling, financial advice on sources of studentfunding and careers advice,— Marketing and communications support,— Human Resources, including payroll services,— Student recruitment support, for UK, other European Union and other internationalstudents; and,— University Secretarial support.”(Call for tenders, London Metropolitan University, 1 February 2012)
  • 15. Ambit of savings?Experience would seem to show thatjust working current processesharder might achieve a 10-15 percent efficiency gain, at best.Selective reengineering of keyservices might up that figure byanother ten per cent, or so; but athorough across-the-board re-engineering might achieve yetanother gain, of up to 20 per cent.(Times Higher Education, 12 Jan. 2012)
  • 16. Outsourcing: The way forwardfor higher education services? 20 7133 2001