1. LBNL / UCSD LBNL/UCSD Discussion June 29, 2005 Business Architecture and the Balanced Scorecard

2. LBNL / UCSD Discussion Topics Components of the Business Architecture Business Portals Balanced Scorecard Marketplace

3. LBNL / UCSD Drivers & Assumptions Unprecedented Growth of Enrollments Admin Resources Will Not Increase In Proportion to Campus Growth Increase in Complexity of Fed & State Relationship

4. LBNL / UCSD Competitive Labor Market New Staff Will Not Have Adequate Skills/Training Technology is Changing the Way Business is Conducted Drivers & Assumptions

5. LBNL / UCSD Why a New Business Approach? A Vision to Stimulate Initiatives A Context for Setting Priorities Strategies to Increase Staff Productivity Communication of Business & Infrastructure Requirements

6. LBNL / UCSD Scope of Business Architecture Define Concepts of Scalable Model Focus on Business Processes, Tools, Operations Excludes Academic, Clinical, and Student Issues Set Stage for Discussion, Consultation, Feasibility of Business Architecture

7. LBNL / UCSD Key Components of a New Business Architecture Page 7 of Report

8. LBNL / UCSD Page 7 of Report Integration of business transactions with policies, guidance, and training A New Business Architecture for UC

9. LBNL / UCSD Page 7 of Report Establish UC as a competitive employer and provide staff the tools to succeed A New Business Architecture for UC

10. LBNL / UCSD Page 7 of Report Redesign Processes to facilitate getting work done rather than cover all potential transactions A New Business Architecture for UC

11. LBNL / UCSD Page 7 of Report Authenticate, authorize, provide effective tools A New Business Architecture for UC

12. LBNL / UCSD Page 7 of Report A New Business Architecture for UC Employ emerging standards to improve integration of financial data

13. LBNL / UCSD Page 7 of Report A New Business Architecture for UC Embed performance metrics into the way UC conducts its business and strengthen financial controls

14. LBNL / UCSD Workflow Study Integrate Information, Transactions, Training, Templates Establish Super-Intuitive Navigation Develop Content that is Simple, Relevant, Recent Business Portal Pages 8-11 of Report

15. LBNL / UCSD Departments CentralOffices Where are Support Costs?

16. LBNL / UCSD Workflow Study Integrate Information, Transactions, Training, Templates Establish Super-Intuitive Navigation Develop Content that is Simple, Relevant, Recent Business Portal Pages 8-11 of Report

17. LBNL / UCSD Pages 8-11 of Report Single Authentication/Authorization (Lightfoot Model) Move From HTML to Content Management System Focus on Those New To Roles Focus on Clarity vs. Completeness Business Portal

18. LBNL / UCSD

21. UC as an Employer of Choice New Application Processes Designed for Candidates Market-Based Compensation & Flexible Benefits Organize Effective Outreach to Increase Diversity People Pages 12-17 of Report

22. LBNL / UCSD Flexible and Effective On-Line Training Baseline Skills Development Invest Resources in Staff Positions Providing Intuitive Tools to Ensure Staff Success Pages 12-17 of Report People

23. LBNL / UCSD Initiate Aggressive Program to Eliminate Paper-Based Processes Remove Non-Value Added Steps Ensure Performance Metrics are Built-In To Processes Processes/Policies Pages 18-22 of Report

24. LBNL / UCSD Move From Proprietary Systems to Standards Promote A Model that Emphasizes Users & Departments Move Campuses to an E-Procurement Solution Leverage Size of UC Purchases for Cost Savings Enabling Technology Pages 23-27 of Report

25. LBNL / UCSD Initially Focus on High Dollars & High Transactions Make All Business Processing Web-Based Ensure Adequate Security & Authentication Identify & Develop Self-Service Applications Pages 23-27 of Report Enabling Technology

26. LBNL / UCSD Provide All Financial Reporting & Transactions on Web Provide Flexible Dept. Tools for Projections & Modeling Provide Instant Feedback on Functionality & Design Use XML Protocol to Link All Campus Financial Systems Financial Systems Pages 28-32 of Report

27. LBNL / UCSD Financial Systems

28. LBNL / UCSD Develop Financial Dashboard for High-Level Diagnostics Establish Cycle-Time Metrics for Key Processes Develop Financial Practices Curriculum Pages 28-32 of Report Financial Systems

29. LBNL / UCSD Source: Kaplan and Norton Pages 33-37 of Report Organizational Performance

30. LBNL / UCSD Develop Culture of Continuous Improvement Evaluate Changes to Business Processes Maintain our Focus on What is Important Assess Results and Develop Action Plans Pages 33-37 of Report Organizational Performance

31. LBNL / UCSD UCSD Mission Excellence in Teaching, Research & Patient Care Financial Perspective If we succeed, how will we look to our financial stakeholders UCSD Business Framework Customer Perspective To achieve our vision, how must we look to our customers Process Perspective To satisfy our customers, financial stakeholders, and mission, what business processes must we excel at? People Perspective To achieve our vision, how must our people learn, communicate, and work together? Source: Kaplan and Norton

32. LBNL / UCSD Strategic Initiatives What we need to do Personal Objectives What managers and staff need to do Strategic Outcomes Strategy Our game plan Balanced Scorecard Implementation & focus A Framework For Translating Mission into Outcomes DelightedCustomers MotivatedWorkforce EffectiveProcessesEffectiveProcesses SatisfiedStakeholdersSatisfiedStakeholders Mission, Values, And Vision

33. LBNL / UCSD 2004/052003/042002/032001/02 Business Unit 1 Excess Revenues as a Percent of Net Revenues Excess Revenue$42,463$71,844($4,544)($15,180) Net Revenue$918,285$848,649$686,223$674,541 Percentage4.62%8.47%-0.66%-2.25% Accumulated Earnings$46,144$4,260($53,601)($47,726) Total Assets Turnover Net Revenue$918,285$848,649$686,223$674,541 Total Assets$157,420$57,151$56,980$71,689 Ratio5.8314.8512.049.41 Business Unit 2 Excess Revenues as a Percent of Net Revenues Excess Revenue$35,262$51,162$93,827$14,578 Net Revenue$928,400$852,679$700,137$808,994 Percentage3.80%6.00%13.40%1.80% Accumulated Earnings$366,354$308,429$229,592$136,625 Total Assets Turnover Net Revenue$928,400$852,679$700,167$808,994 Total Assets$473,300$401,305$323,886$210,410 Ratio1.962.122.163.84 The Balanced Scorecard: Financial Perspective

34. LBNL / UCSD Benefits Top/Bottom 2-Box Ratio 99': 8.3 8.2 3.6 4.3 6.8 4.6 15.8 10.2 6.7 97': 5.0 4.5 2.6 3.1 3.7 3.2 5.3 5.3 3.5 94': 2.2 2.6 1.3 1.8 1.9 1.1 2.4 3.0 1.6 Percentage Evaluating: 1999 = 60 1997 = 60 1994 = 53 N = 354 for 1999 372 for 1997 333 for 1994 Extremely Very Somewhat Not Very Not At All Satisfaction Mean Score UCSD CUSTOMER SATISFACTION SURVEY: 1994 - 1997 - 1999 Overall % 22.6 43.9 25.5 6.6 1.4 2 Box Ratio OverallRating AttributesAttributes

35. LBNL / UCSD The Balanced Scorecard: Internal Process Perspective UCSD SimilarCampuses NationalCohortsNationalCohorts

36. LBNL / UCSD The Balanced Scorecard: Innovation & Learning Perspective WorkplaceCharacteristics MeanScoresMeanScores

37. LBNL / UCSD JUNE - JULY Report Benchmarking and Customer Service Survey Data JULY - SEPTEMBER Develop Strategic Plan and Organization Goals AUGUST - SEPTEMBER - Performance Reviews - Identify Individual Goals - Make Merit Increase Decisions SEPTEMBER - OCTOBER - Implement Merit Increase - Develop Departmental Action Plans to Achieve Goals OCTOBER -DECEMBER Implement Employee Recognition Program NOVEMBER -DECEMBER Develop and Forward Annual Report To Vice Chancellor DECEMBER - JANUARY Develop Benchmarking Data FEBRUARY - APRIL - Submit Benchmarking Data - Conduct Customer Satisfaction Survey APRIL - MAY Collect Results of Benchmarking and Customer Satisfaction Survey The BSC Becomes a Foundation of Strategy

38. LBNL / UCSD Implement New Technology Strategy Map: Benefits Unit Learning & Growth Customer Perspective Resource Issues Internal Processes Team Building Program Leadership Development Redesign Organizational Structure Enhance Skills Of Staff Change Telephone Triage System Invest in Additional Staffing Improve Perception of Responsiveness Improve Perception of Quality Of Advice Benefits Service Delivery Strategy Deliver cost effective benefits Services that are valued by our customers Evaluate Methods To Reduce Cycle Time

39. LBNL / UCSD CustomerPerspective Innovation & Learning FinancialPerspectiveFinancialPerspective ProcessPerspectiveProcessPerspective StrategicComponents OpportunityAssessment ChangeChange NumericGoals Actuals & Ratings Ratings

40. LBNL / UCSD What Have Been the Results? Increased Productivity Reduction in Costs Understanding Customer Needs

41. LBNL / UCSD Million Dollar Challenge Program Background –T–Target - Generate $1,000,000 Increased non-student revenue Reduced costs Over a period of 5 years Outcome –$–$891,189 within 2 years –E–Exceeded goal 3rd year

42. LBNL / UCSD Carpet Procurement Program Background Direct purchase Direct contracting of installation Team project Outcome 5-year savings : $1,121,000

43. LBNL / UCSD Custodial - Conditions in 1994 Low Productivity High Cleaning Costs Low Customer Satisfaction Costs/sq ft.94 cents Customer Satisfaction

44. LBNL / UCSD Custodial - Results in 2002 Productivity Increases Reduced Cleaning Costs - $560,000 Increased Customer Satisfaction Customer Satisfaction Costs/sq ft.84 cents

45. LBNL / UCSD Travel Reimbursement--1996 High Level of Errors Average Cycle Time Over 20 Days Low Customer Satisfaction Customer Satisfaction

46. LBNL / UCSD Travel Reimbursement--2002 Error Level Reduced Cycle Time Down From 20 to 3 Days Customer Satisfaction Improved Customer Satisfaction

47. LBNL / UCSD Payroll -- Conditions in 1995 Paper-Based Update Process Paper-Based Time Reporting Process 50% Transaction Error Rate Inadequate Communication with Customers

48. LBNL / UCSD Payroll -- Results in 2002 Distributed Processes Implemented Error Rate Reduced from 50% to <5% Work Teams Established Phone Triage Process Implemented Customer Satisfaction Excellent

49. LBNL / UCSD Finance -- Conditions in 1995 Difficult Data Extraction Process Paper-Based Financial Reporting Process Inadequate Functional Training Inadequate Communication with Customers

50. LBNL / UCSD Finance -- Results in 2002 Financial Link Implemented Financial Link Improved New Phone Triage Process Implemented Revised and Improved Training Delivered Customer Satisfaction Ratings Excellent

51. LBNL / UCSD Public Confidence in University Management Practices 16% 84% 9% 91% 0% 20% 40% 60% 80% 100% 19942004 Survey of San Diego Voters: Is UCSD is a Well-Managed University? Yes No

52. LBNL / UCSD Why Consider this Approach? It keeps an organization’s focus on what is important It is sustainable over the long-run It is explainable to your people It provides a context for decision making

53. LBNL / UCSD Efforts and planning are aligned with customer priorities It is a great way to evaluate changes to key processes It builds habits of balance, continuous improvement, and accountability to constituents Why Consider this Approach?

54. LBNL / UCSD Lessons Learned: Things That Can Go Wrong Poor Data Quality Quality Lack of Participation in Measurement in MeasurementDevelopment A Culture that Values Complexity No Linkage to Mission & Strategy No Linkage to Mission & Strategy One-Size-Fits-AllApproachOne-Size-Fits-AllApproach

55. LBNL / UCSD Lessons Learned: Critical for Success LeadershipCommitmentLeadershipCommitment Assessment Will InfluenceBehavior Results Influence Rewards Results Form Context for Planning Results Form Context for Planning CommunicateResultsCommunicateResults

56. LBNL / UCSD Blink & Marketplace