Debunking 5 Myths: How Feasible is a Shared Services Model in Higher Ed?

by Ronn Kolbash, Assistant Vice President of Shared Services, University of Chicago
and Stephanie Avallone, Director of Service & Quality Management,Yale University 

With rising tuition, research dollars shrinking, and state budget allocations being reduced, the higher education industry has important cost issues to address. To manage this, a growing number of colleges and universities are adopting a shared services model for various activities and transactions. However, the higher education sector is relatively new to the adoption of such a model, and there are already a number of frequently voiced myths that, if believed, can leave an institution hesitant to implement shared services.

These myths need debunking.

Myth 1: We're unique. We're different from the corporate sector.

In some ways yes, and in some ways no. While there are many facets of higher education that are "unique" or "different," and while our core mission is different, our business activities are similar.

Like any other organization, higher education must hire and pay staff, submit tax filings, reconcile accounts, manage budgets, purchase and pay for goods and services, reimburse employees, monitor compliance, etc. And like any other organization, higher education wants to direct the majority of their human and financial resources to their mission-critical work (in our case: teaching, research, and practice).

While I am pretty confident the phrases "we're unique" or "we're different" have been uttered on just about every college campus for one reason or another when considering traditional business practices, we are in fact more similar to corporate organizations than we are different from them.

Myth 2: Change is hard; without a mandate from the president, this isn't going to happen.

Change is hard: Yes. Yes it is. Yes, many of my colleagues at other institutions will say they believe they have a culture that resists change. Yes, we in higher education like to make decisions by consensus more often not.

And yet, when I talk to colleagues in the private sector, they tell me that even with a mandate from their President/CEO/Board of Directors, and the focus on profits/losses, that implementing shared services remains a journey that requires them to engage people, communicate frequently, overcome resistance, build support, and leverage ideas and solutions. Change is hard. Everywhere.

Myth 3: Higher ed moves too slowly for successful implementation of shared services.

Yes, the culture of higher education can feel cautious and iterative. Even organizations with a mandate need time to strategize, implement, adjust what does not work as planned, and implement again.

But the iterative nature of higher education can work to the benefit of deploying the shared services model. That iterative way of working gives you time to engage more people and overcome resistance through showing the examples of what is works well in the early phases. That slower pace also provides the shared services team with time to either fix what does not work in the early phases or address more complex changes with several early wins already under their belts.

Myth 4: A higher-ed institution is too decentralized for a shared services model to work.

Higher education is highly decentralized: True, but...

In reality, higher education may have fewer barriers to contend with than other industries.

For example, a university may only have a single ERP platform. A university often has only a single campus or has campuses located only within the same state or region. Potentially, a university will have fewer international engagements than many large corporations do, thus reducing such potential issues as language and culture differences, time zone challenges, and various legal/compliance differences.

For these reasons, despite the decentralized nature of many higher-ed institutions, the implementation of shared services in higher education may often prove easier than in other industries.

Myth 5: A shared services model can't deliver the value higher education needs.

While in no way a cureall, the mission of shared services in higher education is in lock step with the mission of shared services in other industries. We want to deliver exceptional service, become valuable business partners to help drive success, and use data to create transparency, identify areas for improvement, and drive value so that more resources can be directed at mission-critical activities. In reality, the value proposition of shared services in higher ed is similar to the value proposition in all industries: Reduce costs, devote more resources to the activities that really matter.

I am confident that shared services can play a strong role in helping ensure the continued success and viability of higher-ed institutions. And while implementing shared services can be a challenging journey, it can be done.

Developing and Implementing Shared Services: Take the Next Steps

You may be interested in this recorded webcast, which offers an in-depth and practical look at shared services:

Shared Services: Assessing Your Readiness

You may also be interested in AI's 2014 article "Saving on Administrative Costs through Shared Services Agreements: 2 Case Studies."