THE VCCS SHARED SERVICES CENTER AND STUDY OF POTENTIAL BENEFITS FOR OTHER INSTITUTIONS TO PARTICIPATE IN THE CENTER Presentation to Resources and Planning Committee State Council of Higher Education for Virginia July 18, 2017

Doing More With Less – Building the Case for Change Started as part of Reengineering Taskforce initiative Benchmarking study - finance, HR, IT, student services, purchasing, and facilities Analyzed assess opportunities (Accenture and Hackett Group) Decision made July 2015 to establish shared services center for HR, finance, procurement transactions (Gartner and RSM)

VCCS Shared Services Center (SSC) established to process common and transactional services Chancellor Colleges System Office Funding Services SSC independent from the System Office and the colleges with a reporting line to the Chancellor. The System Office and 23 colleges all govern, receive services, and fund the SSC.

Shared Services Building Daleville, Virginia

Main Services in SSC Finance Travel and Expense Collections Accounts Payable (procurement and financial payments) Procurement Payroll Human Resources Recruiting and Onboarding Employees Timecards and Time Processing Help Desk

Total # Colleges By Service Shared Services Center Update – June 2017 Service FY17 Work Volume Travel & Expense 2,287 Procurement Requests 3,331 Leave Calendars 890 Accounts Payable Invoices 5,076 Help Center Tickets 4,538 Total # Colleges By Service 23 TLAM 22 T&E 8 P2P

SSC Cost Estimates Compared to Benchmark Data ($ in millions) Defined Processes Benchmark Study Data SSC Costs * SSC Cost as % Benchmark  FTE Total Cost $   Procurement 92 $ 6.30 31 $ 3.98 63% Accounts Payable 42 $ 2.15 8 $ 1.81 84% Collections 18 $ 1.15 2 $ - 0% Travel 10 $ 0.65 4 $ 0.59 90% Time & Labor 14 $ 0.81 3 $ 0.30 37% Total $ 11.06 $ 6.68 60% * Includes allocation of SSC management, support, and facilities costs.

Institutions adopting shared services for multiple benefits Source: Huron Consulting, 2015 NACUBO Annual Conference

Potential Opportunities for Other Institutions Initially, three Virginia public institutions have expressed interest in exploring benefits of participating in SSC. Consultant funded in part from the SCHEV grant working with the institutions to assess the feasibility of a partnership. Preliminary findings are that there are opportunities that warrant further analysis.

Findings So Far Richard Bland College Shared Services Feasibility Study RBC has had some success in reducing administrative costs, but has limited opportunities to reduce headcount further to drive savings. Initial findings are there are: Benefits to partnering with the SSC for procurement, technology, and several other back office processes. Opportunities to fill gaps in service delivery and to reduce risk. Virginia State University and Norfolk State University – Collections Review VSU - Initial findings are opportunities to partner on collections to meet state requirements, reduce internal operating costs, and improve recovery rates. NSU is in the process of submitting the diagnostic information

Next Steps Complete RBC analysis and identify processes that are best candidates for shared services. Additional analysis needed to develop roadmap for implementing changes and identifying cost savings and efficiency targets. Develop a schedule with VSU and NSU for collecting data for feasibility study. Analysis will be completed within 30 days of receiving information. Review with the leadership team at each organization when complete. Assessment will continue through 2017 with a final report to SCHEV in January 2018

Questions?