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1
Implementing theNew Business Architecture
University of California, San DiegoJanuary 18, 2006
2
Goals
Manage growthControl costsImplement best business practices
Goals of the New Business Architecture
3
Goals of the New Business Architecture
Strategies
Recruit and develop the best peopleStreamline processes and proceduresIntegrate applications within business portalLeverage new technologyEmbed performance management systems
4
The Challenge
Since 2000/01:26% increase in students30% growth in research 17% reduction in State revenuesMore government mandates and requirements
5
The New Business Architecture
6
Provide integrated access to Provide integrated access to business transactions, policies and business transactions, policies and
trainingtraining
The New Business Architecture
7
Establish UC as a Establish UC as a competitive employer and competitive employer and provide staff the tools to provide staff the tools to
improve productivityimprove productivity
The New Business Architecture
8
Redesign processes to Redesign processes to improve our efficiency and improve our efficiency and
effectivenesseffectiveness
The New Business Architecture
9
Invest in technology to Invest in technology to replace manual, paperreplace manual, paper--based work processes based work processes
The New Business Architecture
10
Improve integration of Improve integration of and access to financial and access to financial
datadata
The New Business Architecture
11
Incorporate metrics to Incorporate metrics to improve performance and improve performance and
manage riskmanage risk
The New Business Architecture
12
Implementing the Business Portal
Business portal streamlines core processes
Administrative web sites eliminated
Eliminated paper input into financial system
Less paper handling means higher productivity
W2’s, direct deposits, other transactions online
13
UCSD Business Portal
14
Prepayments for University BusinessOnline vs. Paper
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Online 47.1% 47.9% 52.0% 73.1% 85.5% 91.3% 91.5% 96.3% 99.6%
Paper 52.9% 52.1% 48.0% 26.9% 14.5% 8.7% 8.5% 3.7% 0.4%
96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05
Streamlining Payment Process
15
People Initiatives
Web-based training
E-recruitment
Employee self-service applications
Intuitive tools
16
My Dashboard – Leave Activity Report
17
Removing Steps Removes Costs
HR Budget per Employee
0
100
200
300
400
500
600
700
800
2000/01 2001/02 2002/03 2003/04
Year
Dol
lars UC San Diego
National Average
18
Employees Supported per Training Staff
0
200
400
600
800
1000
1200
1400
1600
1800
National AverageUC San Diego
19
Rapid Process Redesign
Identified and redesigned business processes that could potentially yield labor and cost savings in areas such as:
Financial Reconciliation, Invoice Approvals, HR Processes, Leave Accounting, Paper Use and Disposition, Federal Grant Reporting, and Payroll Expense Transfers
Initial Cost Savings/Avoidance - $1.2 million with annual savings estimated at $2.3 million as efforts progress.
20
Disbursements
Disbursements Workload
500
550
600
650
700
750
800
850
900
950
1,000
1998 1999 2000 2001 2002 2003 2004 2005
Tran
sact
ions
(in
Thou
sand
s)
25
35
45
55
65
75
85
95
FTE
Workload
Actual FTE
21
Leveraging Buying Volume
-
2
4
6
8
10
12
14
16
18
Mill
ions
of D
olla
rs
2001 2002 2003 2004 2005 2006*Fiscal Year
Procurement Savings/Cost AvoidanceNegotiated Savings & Avoidance ContractSavings Cummulative
*Projected
22
My Dashboard: Financial Information
23
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
% Electronic Invoices vs. Paper Invoices
Electronic 18% 23% 26% 38% 54% 59% 58% 62%
Paper 82% 77% 74% 62% 46% 41% 42% 38%
FY97/98 FY98/99 FY99/00 FY00/01 FY01/02 FY02/03 FY03/04 FY04/05
Eliminating Paper and Workload
24
Research Grant Workload vs. FTE
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Num
ber o
f Aw
ards
0
20
40
60
80
100
FTE
Number of Aw ards
Actual FTE
Streamlining the Management of Grants
25
Transaction Percentage
0102030405060708090
100
FY90
FY91
FY92
FY93
FY94
FY95
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
Perc
ent W
eb In
put
WebManual
Manual vs. Web Input to Financial System
26
E-Check Deposits
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
2002 2003 2004 2005
E-C
heck
Dep
osits
(in M
illio
ns)
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
Cos
t Avo
idan
ce(in
Mill
ions
)
E-Check Deposits Credit Card Cost Avoidance
Streamlining Deposit Process
27
Strategic Energy Investments
Pac HallStein ClinicalSDSC
$1,375,700 $502,283 2.7
Turbine Retrofit $600,000 $260,000 2.3
Cognitive SciencesHVAC
$250,000 $45,000 5.6
Theater HVAC $200,000 $50,000 4.0
Multiple Lab Bldgs.HVAC, Valves, Sensors
$2,900,000 $547,170 5.3
Annual SavingsInvestmentProjects Pay Back in Years
$1,404,453$5,325,700Total 3.8 Years
Examples of Projects in 2005/2006
28
Energy Savings
567
285
0
100
200
300
400
500
600
kBtu
/sf-y
rResearch Bldg. Energy Usage
Legacy facilities
New construction andretrofit facilities
29
Generating our own Power Reduces Costs
Cogeneration of Power and Cost Avoidance
$7,202 K $7,540 K $7,980 K $8,067 K
$4,475 K
$-
$5,000 K
$10,000 K
$15,000 K
$20,000 K
$25,000 K
$30,000 K
$35,000 K
$40,000 K
2001-02 2002-03 2003-04 2004-05 2005-06*
Costs avoided throughCogenerated electricity
Cumulative
Original investment
30
Financial Perspective
How do we look to resource providers?
Customer Perspective
How do customers see us?
Internal Process Perspective
Are we productive and effective?
Innovation & Learning Perspective
Do our people have tools to succeed?
Balanced Scorecard
31
Top/Bottom 2-Box Ratio‘05: 10.2 7.8 6.1 6.3 5.8 5.0 8.3 7.3 6.6‘04: 6.8 7.4 7.7 6.3 4.8 4.5 7.8 3.0 4.7’03: 3.8 3.0 3.9 2.9 2.7 2.6 * * 3.0‘94: 3.3 2.8 4.1 2.7 2.5 1.6 * * 1.8
Service Attributes
Satisfaction Mean Score
Average % Evaluating 2005 = 11%2004 = 15%2003 = 13%1994 = 24%
N = 1699 for 2005 1139 for 2004
999 for 2003706 for 1994
* New for 2004
3.5
3.4 3.
5
3.4
3.7
3.7
3.7
3.7
3.6 3.
7 3.8
3.5 3.
63.8
3.8
3.8
3.7
3.7
3.7 3.
9
3.7 3.8
3.4 3.
5
3.4
3.3
3.23.
4
3.23.
4
3.4 3.
5
1
2
3
4
5
Overall Understandsneeds
Accessible viaphone
Responsive Effective advice Problemresolution
Know ledgeablehelpful staff*
Effective use ofBLINK*
Positivedirection
1994 2003 2004 2005
2005Overall
%
19.8% Extremely
49.5% Very
3.1% Not Very
24.0% Somewhat
3.6% Not At All
An Example of Performance Metrics
Grant Post-Award Management
32
External Recognition
UC San Diego and the University of Minnesota cited as best practices in December 2005 cover story about administrative cost savings in universities
33
External Recognition
“Using a combination of technological and organizational resources, UCSD fosters a continuous improvement cycle that constantly strives to enhance university business operations.”
Nov. 2005 Study by the EducauseCenter for Applied Research
34
“In recognition of its innovative approach to cutting costs, solving problems, and increasing efficiency, the University of California, San Diegois the first university to be inducted into the Balanced Scorecard Hall of Fame.”
External Recognition
35
Thank you