A group established to review administrative functions throughout the university has recommended changes that could save nearly $60 million in the next three years.
Stanley O. Ikenberry established the Administrative Review and Restructuring working group in November while serving as interim president. The group examined administrative functions across all three UI campuses - including central university administration, the Alumni Association and the UI Foundation - to see where costs could be trimmed.
The group's June 23 report makes 43 recommendations for savings in areas that include clarifying and reducing the number of administrative positions; developing stronger relationships among university advancement units; moving to a center-led strategic procurement system; improving efficiency in delivering information technology operational services, as well as ways to streamline costs associated with capital programs, communications, facilities management and human resources. UI Foundation senior adviser Craig Bazzani co-chaired the group with Avijit Ghosh, vice president for technology and economic development.
Each year, the university spends more than $300 million to purchase goods and services. When iBuy was introducted in 2006, it took a big step toward greater use of universitywide contracts to consolidate decentralized purchases to save money. In addition, the iBuy application provides units with a convenient requisitioning and catalog shopping application. However, the current portfolio of university strategic contracts represents only 20 percent of the targeted portfolio of supplies and services. Additional cost savings could be achieved by expanding the portfolio. The report states that achieving even a modest 5 percent price reduction could result in potential savings of more than $22 million a year.
The working group also recommended moving to a center-led strategic procurement system to reduce costs and improve service. The center-led model does not refer to resources being in one office, but rather a structure that seeks to use the best resource to accomplish a particular procurement regardless of campus location while still supporting the individual campus needs.
The cost of processing a transaction through iBuy also is substantially less than through a purchase order or credit card. A university purchase made with a university P-card costs the UI $20 per transaction, $18 through Banner, but iBuy costs only $4, Bazzani said.
"The business climate is good for us right now," Bazzani said. "There's no reason for the university not to have the same kind of critical mindset a private business would have. We can make better deals with vendors now."
According to the report, an additional $17 milion to $19 million per year by fiscal year 2013 could be saved in information technology. Currently, the UI spends nearly $300 million annually on IT, including hardware, software, services, supplies and personnel.
The UI phone service will use a converged voice and data communication system. In other words, the same technology used for Internet on campus also will be used for voice, Bazzani said.
Other IT savings could come from reducing power consumption for campus computing, better managing the purchase and replacement of desktop computer applications and consolidating data centers, he said.
"Everyone orders computers at different times. We don't do anything on a scheduled basis," Bazzani said. "If we're able to do things in a more routine way, in a more strategic way, we can better manage maintenance requirements. Just replacing computers more frequently, but in larger numbers can probably save 50 staff positions (over time)," he said.
The committee also highlighted potential savings of $2 million within the next two to three years on communications. Although carefully targeted, strategic communication has never been more important for the UI, Bazzani said, doing it as efficiently as possible also is imperative at this time.
It was noted that a system for tracking the cost of communication programs across campus should be a priority. In addition, each unit should review the number, circulation and frequency of its print publications. The report indicated that greater control of these publications will reduce costs and also reduce the impact on the environment.
Another $16 million could come from general administrative cost reductions, more efficient use of advancement dollars, and decreasing the number of executive level administrators.
Another $500,000 could be saved by reducing leased off-campus spaces.
Ikenberry commended the panels' work.
"The real challenge is one of execution," he said. "Good ideas and recommendations are useless sitting on the shelf. Change will not occur overnight, but it must occur promptly. The university must achieve the savings and improvements now."
At least one major recommendation on administrative restructuring is already under way. The UI Board of Trustees last month approved the consolidation of two vice presidencies into a single office of executive vice president.
At the request of President Michael J. Hogan, who takes office July 1, Ikenberry will oversee a team to implement the committee's recommendations.
