Tuesday, 29 June 2010

Where did we go wrong?

I've blogged about shared services before - lots of discussion about how sharing some back-end systems might save money. I was interested to see today that the idea is catching on in the US as well. There's an interesting article in Inside Higher Ed about the University of North Carolina at Chapel Hill and North Carolina State University co-operating on the implementation of an ERP system for Finance, HR and Payroll. Now that in itself might not be particularly newsworthy over here, but what particularly interested me in the article was the amount of money they are going to save. Apparently they are going to save (or avoid appointing) 40 staff between them, with Chapel Hill estimating that they would have had to employ an extra 60 to 70 staff to run the new ERP, and the new arrangement means that they can eliminate the need for 40 of them, saving $3m every year on staffing which will be split between the two institutions.

So, three years ago we put in a new ERP system for Finance, HR and Payroll. We appointed 5 new staff in IT, and as far as I'm aware, no permanent staff in any other department. The two Carolina Universities are slightly bigger than us with c30,000 students and 8,000 staff compared to our 25,000 and 6,000, but not much. So, what did we do right? (or wrong?). What on earth were these 70 staff going to do? And is it any wonder shared services can give savings when the numbers involved are that big and some of us are sceptical about making large savings when our numbers involved are so small?


Nick Skelton said...

Perhaps they artificially inflated the number of staff the alternative proposal needed, just to make their shared service look good? Yet the article implies that each university will still be recruiting 20 or 30 staff to implement the system. That still seems like a lot to us.

What's the difference? Perhaps US universities are led by people who understand the benefits of IT, and conversely UK VCs only see it as a cost centre?

If you believe the function of IT is to streamline business purposes in order to cut costs, you'll go into it spending as little as possible. If you see IT systems as tools to gather business intelligence or improve the core teaching and research mission, then you see IT as an opportunity for growth, and are prepared to spend more on it.

There are several other points in the article which struck me:

US universities are prepared to fire their CIO if major projects fail - how often does that happen here?

The two CIOs were friends as they'd previously worked together in a different institution at an earlier stage. How often do IT managers in the UK move between institutions, building up alliances? Or do they settle into a comfortable role in one institution and stay for their whole career?

If US universities hired extra staff for the project, would they be quite happy to lose them again at the end of the project? Here, maybe we keep staff when the project is over, even if they were originally appointed on a fixed-term contract. If we don't have enough staff for what we're already doing it's easy to find the work and feels like the right thing to do. However it does mean that the Finance Director sees all staff appointments as a fixed recurrent costs for ever more, and it's no wonder he won't give us many extra staff in the first place.

Anonymous said...

Its primarily because the people employed to run the system are Brilliant at what we do and undervalued in the department, considering the scale of the achievements ;-), considering the scale of other universities deployments.

Newcastle for example employ SIX Basis people.

I actually counter the fact that we only actually employed four people to run the system.

Three people were already internal to the university and three with experience,Andy, Paul, Mel and Myself

James Ibbotson

Sap system admin - Sheffield Uni,

Now when can we sell our system to hallam ?

George Credland said...

Hard to see how anyone could justify the costs of 40 additional staff if those are full-time equivalents.

With good retention we're able to build up staff skill sets to cover a wider range of technologies with fewer people. It also makes work more rewarding than staff being stuck in narrowly defined silos.

It also means we have to carefully balance support for existing systems/processes with any new deployments, and coordinate leave and cover arrangements to make sure services aren't put at risk.

Chris Sexton said...

Hi Nick - thanks for that. In my astonishment at the additional staff, I completely forgot to mention the potential for the CIO to be sacked! I was very careful to brand our ERP implementation as Business Project, not an IT one....

Chris Sexton said...

Like you I can't work out where the 70, 50, 40 staff would go or what they would do. And like you, I think we have some great staff in Sheffield!

Anonymous said...

Maybe they are looking at employing additional staff just for the blueprinting, construction and initial implementation project. I can't see that number of staff being sustainable.

It is not uncommon, as in my experience at Northern Foods plc, to find that more staff are recruited just to get the system implemented. Unfortunately, after the implementation(s) some people are let go, whilst others stay on in a support capacity. This means that not all the knowledge is lost.
Maybe, too, the business analysts belong to their IT organisation.

As part of the wider NF SAP project, the group IT was centralised. Two years down the road, Procurement, Accounts Payable and Accounts Receivable was centralised into a successful Shared Services Centre.

As far as we are concerned, I think we've got the numbers right for Basis and Software Development. As James says, we've also got the right mix of experience and skillsets. I'd like to have seen more business analysts/functional people, allowing deeper skills in SAP modules: they work for another part of our organisation.

Paul Thacker
Senior Analyst/Programmer
University of Sheffield