Business service centers address shrinking resources; aim for excellence

By Marguerite Spencer

In 2002 Cornell was confronted with a projected revenue gap of $25 million due to declining resources from state and private sources and rising administrative costs.

Families of college-age students were growing increasingly anxious about rising tuition. At the same time, to attract and keep key faculty and maintain its leadership, Cornell would need to make new investments in priority academic areas. Caught in this financial bind, Cornell embarked on "Workforce Planning" to identify cost reduction opportunities and to redirect expenditure. It also was the opportunity to improve efficiency across the university. Among the areas targeted was financial transactions.

From left at the College of Veterinary Medicine Business Services Center are director Lynne Lehman, account rep Leslie Planck and finance specialist Gerda Medgyaszay. Joshua Adams/Cornell University

Joanne DeStefano, university controller and vice president for financial affairs, was charged with leading the Finance Workforce Planning initiative. From this review emerged the "business service center model," which targeted economies of scale in combining and sharing staff, expertise and physical resources. The major goals were to reduce the number of people involved in financial processing to make these activities quicker and more efficient, standardize processes, and clarify roles and responsibilities so as to build in greater accountability. Incentives would be provided for staff to upgrade accounting skills. Very important, regular surveys of customer satisfaction would keep teams focused on this key indicator of success. Said DeStefano, "We have been very concerned about maintaining the good relationships between faculty, administrators and service managers."

In January 2004, four business centers went into operation, providing financial and other business services to large operating units on campus: the College of Human Ecology; the College of Veterinary Medicine; Administration, Facilities and Finance; and the Geneva Agricultural Experiment Station. While adhering to the core principles of resource sharing and customer focus, each center is organized somewhat differently, "custom fit" to the college or administrative unit it supports. Along with this shared-services model is coming significant change to Cornell's distributive culture.

The functions of human resources and finance have been combined at the College of Human Ecology's new business center, led by director Michelle Lyon. Barry Lee Brighton, associate dean for administration and facilities, who guided the process along with other college leadership, department managers and center staff, said maintaining valued personal relationships was a critical goal. Staff members taken from each department into the center were re-assigned to their previous departments. A customer of the new center, Maureen Quartararo, administrator for the Division of Nutritional Sciences, said of the new arrangement: "We're getting the same level of good service because we have the same people. It's just that they are in a different location and someone else is managing them."

Business center staff are also experiencing advantages. HR rep Lisa Rose said: "I'm much happier now than when I was on my own in a department setting. And because of the variety of transactions, no two days are ever the same." Speaking of the new standardization of processes, she added: "At the start, I was anxious about learning an unfamiliar set of procedures, but then I realized I could turn to anyone for help because they would all give me the same right answer."

Avoiding job losses was a great concern of DeStefano. As with the College of Human Ecology, there were no layoffs at the College of Veterinary Medicine in the shift to its new accounting service center (ASC). Gene Wheeler, the college's assistant dean for finance and administration, said the university's hiring freeze eight months before took care of all the turnovers. "Because we had been notified about Workforce Planning well in advance, we were able to make long-term staffing plans and were very careful about making replacements," he said.

Department chairs, directors and administrators participated in the decision to relocate into the center staff members in the academic units who had been spending half or more of their time on accounting. Also absorbed in the new center was accounting for the fee-for-services programs. Left behind in departments was staff responsible for general administrative support as well as grant and contract administration.

Expanded career opportunities has been identified as a significant advantage of the business center model. Said Wheeler, "With the entire campus going this way, career opportunities have grown all the more for our service center staff."

Looking to the next set of challenges for the center and its staff, Wheeler pointed to balancing the workload, and he expects technology to help reduce any overload.

"The biggest adjustment for customers was for those of the academic unit because of the extra step," said Shawna Lindsay, account rep in the academic support team. "Now it's e-mails and calls rather than visits." But in the fee-for-services area, said account rep Nancy Bennett, "support was already centralized so our customers saw no effect. We didn't even change the fax number."

Yet another version of the business service center model is that of Administration, Facilities and Finance (AFF), which has retained two financial units. Under director Michelle Gibson, center "A" covers AFF's support services and reporting for the division overall. Under director Joe Lalley, center "B" supports the division's facilities services.

A small operation continues to support the Cornell Store. Policies and procedures, however, will be standard across these operations. The two new financial centers and an HR center are housed inside AFF's main Humphreys Service Building, where information technology services also will be provided.

"What I'm most proud of," said Roxana Bahar Hewertson, AFF administrative services director, "is that we received the 'givens' but determined how to implement them. A big concern was that individuals and department heads should feel cared for, that we really understand their needs."

Speaking of job security, Hewertson explained, "We created as much of a 'safety net' as possible in this transition year and landed everyone in a real position, due to well-planned reassignments and managing attrition."

But Hewertson has identified three serious challenges. One was creating a process "where people feel heard and everyone can buy into." She said, "I'm very proud of how that went. Complete credit for this goes to our culture and leaders. At the same time deadlines were met and we exceeded expectations of the project and of the savings." Challenge two was the funding model: "How are we going to charge departments for the centers, and how can we share the savings? We are basing this sharing on the FTEs assigned to each department using our services, but we are still working to perfect this," she said.

Challenge three was identifying a central location. Said Hewertson, "A massive reshuffling and squeezing has to take place -- a problem AFF is still grappling with."

Program champion DeStefano projects that when fully implemented, Finance Workforce Planning could save Cornell $1.8 million. Reflecting on her unit, Hewertson said: "There has been considerable cost due to the relocation and doing things in a new way. Over the long term, we will probably save money. But I believe this is the right way to go because of the synergies and the opportunities to professionalize. This model will take us where we couldn't have gone before. It's an opportunity."

At the Geneva Agricultural Experiment Station, the administrative service center serves students and visitors as well as some 300 members of faculty and staff, including at the field stations in the Hudson Valley and Fredonia. Specialists provide HR and finance services, including pre-grant applications and financial reports. Marc Smith, assistant director at the station, said, "Creating an ASC has given us the opportunity to improve services and cost efficiencies, while eliminating some duplication."

Customer feedback is routine, said finance manager Jim Moravec, who added, "The ASC is more than just a centralized group of account and HR transaction employees. We are a team that encompasses the administrative staff in the departments and units we serve."

As at AFF, Geneva's Moravec said finding suitable office space and funding has been "complicated." The future brings new computer systems and more training in the new finance and HR procedures and policies.

Meanwhile, Human Ecology business center customer Quartararo offers the following advice to users of service centers still under development: "It's important to recognize that everything isn't going to be worked out on the first day. But I know it's going to work well for us."