Deans’ Forum

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Deans’ ForumDeans’ ForumOctober 7, 2009October 7, 2009

AgendaAgenda

B&F Overview and Strategic Framework • Tim Slottow

Highlights – Scope, Accomplishments, Challenges• Hank Baier – Facilities and Operations• Erik Lundberg – Investments• Rowan Miranda – Finance• Laura Patterson – Information and Technology Services• Laurita Thomas – University Human Resources

Question/Answer

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B&F Fast FactsB&F Fast Facts

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Q. U-M is one of how many public universities to have a AAA credit rating from Moody’s and Standard & Poor’s?

A. 3B. 7C. 13D. 20

Q. Roughly what were the net

assets of the University in 2009?

A. $12.9 billion B. $4.2 billion C. $8.7 billion D. $8.0 billion

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Q. Approximately how many Human Subject Fee payments are made per year?

A. 10,000B. 50,000C. 120,000 B. 500,000

Q. How many tax forms do we file per year?

A. None – we are a non profitB. 1C. 125D. 1,500

The CFO and the UniversityThe CFO and the UniversityWho is Shirley Smith?Who is Shirley Smith?

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The ChallengeThe Challenge

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Strategic Framework Strategic Framework B&F Mission and MottoB&F Mission and Motto

We partner with the University community to provide the

technical, financial, physical, information and human resource

infrastructure essential to being one of the greatest public universities in the

world.

“WE MAKE BLUE GO”

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Strategic Framework Strategic Framework B&F VisionB&F Vision

We will become a high-performance organization by:

• Being known for our deep expertise (both technical and business)

• Demonstrating our understanding of the University’s businesses

• Serving as fiduciaries of the University assets (physical, financial, human, information and technology assets)

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Strategic Framework Strategic Framework Goals and InitiativesGoals and Initiatives

Three B&F Strategic Goals• Become the University’s PROVIDER of CHOICE for the UM services we

offer

• Become the EMPLOYER of CHOICE for high performing staff members and teams

• Demonstrate BEST IN CLASS LEADERSHIP in managing University resources with respect to quality, cost, service and long term impact for the University

• Internal implementation of major U-wide initiatives• Best Practices in Leadership and Management• Cost-Savings and Reinvestment

Top Ten Key Initiatives• Clear metrics• Updated annually to align with University goals• Transparent reporting and performance

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Provider of ChoiceProvider of ChoiceMean Overall Customer SatisfactionMean Overall Customer Satisfaction

OVERALL CUSTOMER SATISFACTION RATING BY B&F AREA

2007Mean

2009Mean

Diff 2007-2009

B&F OVERALL SATISFACTION SCORE 7.3 7.5 *.2

FACILITIES & OPERATIONS 7.0 7.2 .2FINANCE 7.1 7.3 *.2UHR 7.4 7.4 .0MAIS (including ITSS) 7.7 7.8 .1

B&F Overall % Satisfied (rating of 8, 9,10) 56% 59% *3

B&F Overall % Dissatisfied (rating of 1, 2, 3) 7.1% 7.1% 0

Number of Surveys Received 6,085 11,526 + 5,441

Goal 1

*Statistically significant differences *Statistically significant differences

Provider of ChoiceProvider of ChoiceAcademic Units Only Academic Units Only

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SERVICE ATTRIBUTE RATINGSAcademic Units Only

2007 Mean

2009 Mean

Diff 2007-2009

1 Understanding of customer's business needs 7.3 7.5 *0.22 Explanation of University policies and procedures

7.3 7.5 *0.2

3 Communication of service standards 7.2 7.5 *0.34 Functional/technical expertise 7.7 7.8 *0.15 Communication of service changes 7.1 7.3 *0.26 Implementation of service changes 7.1 7.3 0.27 Accessibility of service and/or service provider 7.4 7.6 *0.28 Level of courtesy 7.2 7.4 *0.2Overall Customer Satisfaction 7.3 7.6 *0.3

Number of Surveys Received 2,530 3,542

*Statistically significant differences *Statistically significant differences

Goal 1

Employer of ChoiceEmployer of Choice

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Employee Survey Dimension Jan 2005 Oct 2006 March 2008

Climate 59 60 *62

Supervisor 69 69 69

Autonomy/Involvement 64 66 *67

Workload 61 62 *63

Resources/Environment 71 73 *75

Recognition 60 60 *62

Co Workers 72 74 *74

Communication 58 58 58

Training and Development 60 61 61

Task Significance 72 76 *76

Compensation 51 53 *56

Benefits 72 72 *74

Upper Management 54 57 *58

Advancement 64 59 61

B&F Job Satisfaction 71 71 72

*Statistically significant differences from 2005 to 2008 *Statistically significant differences from 2005 to 2008

Goal 2

Employer of ChoiceEmployer of Choice

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Employee Survey Dimension Jan 2005 Oct 2006 March 2008

Climate 59 60 *62

Supervisor 69 69 69

Autonomy/Involvement 64 66 *67

Workload 61 62 *63

Resources/Environment 71 73 *75

Recognition 60 60 *62

Co Workers 72 74 *74

Communication 58 58 58

Training and Development 60 61 61

Task Significance 72 76 *76

Compensation 51 53 *56

Benefits 72 72 *74

Upper Management 54 57 *58

Advancement 64 59 61

B&F Job Satisfaction 71 71 72

*Statistically significant differences from 2005 to 2008 *Statistically significant differences from 2005 to 2008

Red indicates dimensions with the highest impact onJob Satisfaction in 2008

Red indicates dimensions with the highest impact onJob Satisfaction in 2008

Goal 2

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Customer Survey and Customer Survey and Employee Survey ScoresEmployee Survey Scores

Customer Satisfaction Scores

Customer Satisfaction Score ‘09

Best in Class Best in Class Financial LeadershipFinancial Leadership

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Achieved

• Three years of budget savings

• While maintaining employee satisfaction

• And increasing customer satisfaction

Goal 3

Facilities and OperationsFacilities and OperationsHank Baier

Associate Vice President for Facilities and Operations

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A Thriving Campus!A Thriving Campus!

Six-year campus growth:

• Research expenditures 36%

• Population 11%

• Space 12%

• General Fund space 10%

Facilities and Operations performance (six years):

• Operations:

• Utilities: Fuel costs, BTU/sf

• Capital projects: $94,600,000 funds returned

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Architecture, Engineering and Architecture, Engineering and ConstructionConstruction

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Occupational Safety and Occupational Safety and Environmental HealthEnvironmental Health

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Parking and TransportationParking and Transportation

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Plant OperationsPlant Operations

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Public SafetyPublic Safety

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Operations BudgetOperations Budget

$68M $68M

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Utilities BudgetUtilities BudgetFY09 total expenditures: $111.7 millionFY09 total expenditures: $111.7 million

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UtilitiesUtilities

Total cost: 56.0%BTUs/SF 5.9%

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Capital ActivityCapital Activity

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CapitalCapital BudgetBudget

Fiscal Year Projects Budget (millions)

Final Cost (millions)

Funds Returned

(millions)

2003 153 $156.7 $149.5 $7.2

2004 165 $414.9 $416.2 ($1.3)

2005 131 $101.7 $87.1 $14.6

2006 147 $536.2 $508.6 $27.6

2007 196 $250.6 $235.1 $15.5

2008 174 $239.5 $217.3 $22.2

2009 (est.) 89 $53.8 $45.0 $8.8

Totals 1,055 $1,753.4 $1,658.8 $94.6

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Capital:• Benchmarking• Major projects (North Quad, C&W)

Utilities:• Planet Blue - 6% savings on pilot buildings• 30 buildings annually

Operations:• Custodial-OS1• Facilities Maintenance-Work Control-Payroll• Office of Sustainability• Thriving campus

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FY10 and Long-term ChallengesFY10 and Long-term Challenges

Investment OfficeInvestment OfficeErik Lundberg

Chief Investment Officer

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University Financial AssetsUniversity Financial Assets

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June 30, 2009 Total Market Value = $7.5 billion

(a) ‘Other’ includes life income trusts, assets that cannot be commingled in the University's investment pools, uninvested cash balances and other reserves.

Endowment GrowthEndowment Growth

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Endowment Funds – End of Fiscal Year Market Value

Endowment GrowthEndowment Growth

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Endowment Funds – End of Fiscal Year Market Value

Compound Average Annual Growth Rate

20 yrs: 14.2%10 yrs: 9.1%

LTP Investment PerformanceLTP Investment PerformanceLong Term PerspectiveLong Term Perspective

Periods Ending 6/30/09Periods Ending 6/30/09

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5 Years(a) 10 Years(a)

Total LTP (estimates) 7.2% 8.9%

Major MarketsU.S. Stocks: S&P 500 -2.2% -2.2%Non-U.S. Stocks: BMI ex-U.S. 3.7% 2.9%Bonds: Lehman Aggregate 5.0% 6.0%

Endowment Universe(b) Top Quartile 4.7% 5.3%Median 3.5% 4.1%

(a)Annualized returns.

(b)Based on Cambridge Associates’ survey of endowments and foundations at about 130 colleges and universities.

Investment StrategyInvestment StrategyLTP Actual Allocation vs. Model PortfolioLTP Actual Allocation vs. Model Portfolio

Model PortfolioJune 30, 2009

Allocation

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Goals and ChallengesGoals and Challenges

Generate sufficient returns to sustain spending and grow the endowment

in real terms over the long run.

Provide steady stream of distributions to support University operations.

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FinanceFinanceRowan A. Miranda

Associate Vice President for Finance

Functional ResponsibilitiesFunctional Responsibilities

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Transaction Processing

Cash Disbursements Accounts Payable Travel Expense

Compliance Management Planning and Business Transformation

Accounting& External Reporting

General Ledger Sponsored ResearchFixed Assets/Property Disposition

Financial Reporting

Tax Management Tax Management

TreasuryManagement

Cash Management

ComplianceManagement Internal Controls

BudgetingBudget Development forB&F (& support campus process)

Business Analysis Business Analysis & Cost Accounting

Purchasing Requisition & PO Processing

Procurement

Payroll Administration Payroll Administration

Revenue & Debt Cycle Billing & Collections Debt Issuance Grant Billing

Capital Planning

Negotiation & Contract Development

Sourcing &Supplier Management

Business Transformation Efficiency & Effectiveness Initiatives

Fast FactsFast Facts

In FY09…• Payroll processed $230M+ in monthly payments

• Property Disposition had 16,000+ sales transactions and returned $1.6M back to schools & units

• Procurement Services processed 270,000+ purchase orders, 640,000+ invoices, and close to $2.5 billion in spending

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Fast Facts Fast Facts (continued)(continued)

In FY09…

• Treasury issued 50,000 MCards to faculty, staff, and students

• We administered and maintained over 85,000 unique chartfield fund, department, project, and program combinations

• We tracked nearly 7,000 endowment funds with over $6 billion of market value

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Major AccomplishmentsMajor Accomplishments

• New payment process and initial pilot for human subject fee participants

• Internal controls certification by all units• Employment, PCard, cash handling, and journal entry processes

• Collaborative management with Investment Office of university’s liquidity situation

• Project plan for implementation of revised travel and business hosting expense policy and pilot of Concur

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• Savings of $10M annually through Work Connections

• Self-insurance through Veritas produced savings of $23M over the past six years

• Additional indirect cost recovery of more than $25M over the next three years due to new rate agreement

• Continued growth of Strategic Supplier Program and university-wide contracts

• JPMorgan Chase chosen as new PCard vendor ($1M signing bonus)

Budget WinsBudget Wins

• Support campus-wide administrative efficiency efforts

• Benchmarking of select administrative services

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Finance HR/Payroll Procurement Information Technology Communications Development Sponsored Research Student Services


• Procurement Strategic Partnering Program• Promote smarter buying in academic and administrative units by analyzing

spending patterns and encouraging greater use of strategic contracts

• Campus wide rollout of Concur

• Federal Stimulus Act Compliance and Reporting

• Support IT rationalization efforts especially on issues related to funding model/chargeback approach

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Information and Information and Technology ServicesTechnology Services

Laura Patterson Associate Vice President

and Chief Information Officer

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http://www.safecomputing.umich.edu/

http://www.itcs.umich.edu/

http://www.umich.edu/

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Functional ResponsibilitiesFunctional Responsibilities

• University-wide Applications• Financial, HR, • Student Administration, • eResearch• DAC (replacement DART)

• M-Reports• eMploy• Wolverine Access

• Business Intelligence &

Data Management

• Central Services

(Directory, eMail, Web,

Kerberos)• Campus Computing Sites • Data Center Management• Voice & Data Networks• Video Streaming and

Conferencing• Servers, Data Storage, &

Protection• Security Services

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U-M IT StrategyU-M IT Strategy

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U-M IT StrategyU-M IT Strategy

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Implement IT sourcing strategy that provides more competitive services for less money

IT RationalizationIT Rationalization

UnitProvidedServices

Shared Services(Units

working together)

Central ITProvidedServices

ExternalProvidedServices

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MAIS MAIS EffortEffort Rationalization Rationalization Increased capacity equivalent to $1.6 millionIncreased capacity equivalent to $1.6 million

Effort to maintain administrative systems.

Effort reinvested in--•Business Intelligence•eResearch•Enhanced system features

= est. $1.6 M

ApplicationApplication Rationalization RationalizationShadow Financial SystemsShadow Financial Systems

• 16 units eliminated shadow financial systems in 2009

• 22 additional units in transition• 28 additional departments in assessment

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https://mreports.umich.edu/mReports/Default.aspx

https://mreports.umich.edu/mReports/Default.aspx

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MAIS MAIS InfrastructureInfrastructure Rationalization Rationalization$3 million base reduction in $3 million base reduction in

hardware/software costshardware/software costs

Telephone OutsourcingTelephone Outsourcing

• Third party analysis of traditional landline service• Findings:

No cost savings by outsourcing our landline telephone service (35,615 ports)

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Provider Cost ATT $15.00 per port

Verizon: $7.60 per port

U-M ITCom $7.03 per port

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Rationalization ApproachRationalization Approach

FY10 Strategic ImperativesFY10 Strategic Imperatives

IT Rationalization•Benchmarks•Unit assessments•New funding model

Shared Infrastructure•Tiered storage•Virtual desktop infrastructure•Consolidated data center plan•Calendar integration

(Windows consolidation)

Shared Products & Services•DART•CTools stabilization•Concur•eRecruit •Student Admissions App•Security Assessment Services

ITS Organization•Transition

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University Human University Human ResourcesResources

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Laurita ThomasAssociate Vice President

for Human Resources

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Did you know…Did you know…

that in 2008 and 2009 the University of Michigan was named…

“A Great College to Work For”

by the Chronicle of Higher Education? In its second annual survey of best workplace practices and policies,

U-M was recognized in nine of 26 areas within three major categories:

Work Environment, Pay and Benefits, and Institutional Policies.

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Voices of the Staff received the 2009

Arbor Award for Excellence, the most prestigious human resources award in Michigan.

The Arbor Award honors organizations for innovative human resource practices & programs.

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The Medical Center discontinued the sale of cigarettes on its premises in 1972.

Effective July 1, 2011, the university will implement a

smoke-free policy designed to help our community

“kick the habit” and snuff out smoking on

campus.


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University Human ResourcesUniversity Human ResourcesFunctional ResponsibilitiesFunctional Responsibilities

21 UHR service areas:

Academic Human Resources Benefits Office Career Development Services Compensation and Classification Early Childhood Programs Faculty and Staff Assistance Program (FASAP) Health System, Flint & Dearborn Human Resources HR Strategy and Planning HR Communications HR/Payroll Service Center Human Resource Academy Human Resource Records and Information Systems (HRRIS) Human Resource Development Kids Kare at Home Mediation Services for Faculty and Staff MHealthy Office of Institutional Equity Recruiting and Employment Services Staff Human Resources Temporary Staffing Services Work/Life Resource Center

Visit us on the web at: hr.umich.edu

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Major AccomplishmentsMajor Accomplishments

1. MHealthy2. Health Benefits Strategy3. Learning Services4. Talent Management5. Union Relations6. Regulatory Investment7. Child Care Initiative8. Emergency Hardship Fund9. Engagement Gains Achieved through Voices of the

Staff

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Investments in HealthInvestments in Health

Long-term metrics for Mhealthy include: reduction in health risk levels

health status improvements improvements in health culture

reductions in health care cost trend impact on avoidable costs

impact on absenteeism, worker’s comp and disability.

By year five of its strategic plan,

MHealthy expects to "bend the health care cost trend" by 1 percent or more annually.

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The Committee on Sustainable Health Benefits (COSHB) and the Committee to Study Retirement Savings Plan Vesting Options were successful in devising the means to maintain our highly competitive health care and retirement benefits while curbing our long-standing rate of benefit cost increases.

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Implementation of COSHB’s recommendations will:

Preserve access to U-M health plans. Help make the costs more affordable

for those earning lower wages. Protect children with rates lower than

for dependent adults. Keep our benefits at or above

market averages.


• By transitioning from primarily insured to primarily self-insured medical plans in 2008, our Benefits office was able to reduce overall medical plan expenses by approximately $15 million dollars.

• Cost savings in our self-insured prescription drug plan in 2008 were nearly $3 million due to generic drug use increasing over 6%.

• U-M generic drug dispensing, now 73%, outpaces national averages.

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• UHR launched an initiative to transform Human Resource Development (HRD) into a high-impact learning services center.

• HRD’s Organizational Development consulting services were discontinued, reducing the HRD budget by 13.9% and creating a leaner professional development center of excellence focused on dynamic, collaborative learning.

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HR business processes have been enhanced by leveraging technology for net efficiency gains:

•Paperless, self-service systems (e.g.: benefit elections, retirement transactions)

•E-business processes now capture data at the source (e.g.: self-service timekeeping)

•Online transactions improve efficiency and reduce process time (e.g.: appointment changes)

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• E-Recruit• E-Verify, IPEDS, ADA Compliance• Health Benefits Dependent Eligibility Audit• Retiree Health Benefits• Return to Work• Changing Demographics• Employee Value Proposition• Building a Culture of Health

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Q/A and DiscussionQ/A and Discussion

• Tim Slottow - EVPCFO

• Hank Baier – Facilities and Operations

• Erik Lundberg – Investments

• Rowan Miranda – Finance

• Laura Patterson – Information and Technology Services

• Laurita Thomas – University Human Resources

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Deans’ Forum

Documents

Transcript of Deans’ Forum