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Today's date:
Bain report
identifies areas to increase efficiency,
reduce costs
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The final Bain & Company report presented to the Board of Trustees on July 23 provides both opportunity and challenge.

The opportunity is to squeeze greater efficiency from shrinking dollars to protect academics. The challenge comes in making hard decisions about what areas of the University enterprise can be squeezed – and by how much – to realize these efficiencies.

Chancellor Holden Thorp told trustees that the completion of the report could not have come at a more crucial time.

Bain & Company Final Report:
identifying, designing, vetting options

Through a collaborative process, Bain talked with more than 300 faculty, staff and students before identifying options for the University to streamline its operations and become more efficient and effective.

* *Gathered data from a variety of sources
         Budget idea e-mails
         Data analysis and research
         Campuswide interviews

* *Codified long list of ideas

* *Used guiding principles to identify high-potential options
         Costs evaluated against relative value

* *Worked with key stakeholders to define and vet options, articulate likely benefits and risks

* *Summarized options

* *Chancellor Holden Thorp will lead selection and prioritization of ultimate options to pursue

It appears likely that the state’s unemployment rate will continue to rise for several quarters, which will put a strain on the state budget, he said. He also cited diminishing public confidence in the way universities are managed.

Thorp said he was proud that the University had initiated a study that puts it at the forefront in achieving efficiencies that would help to save money and restore the public trust.

“Our objective is to make our administration work as efficiently and effectively as we possibly can,” Thorp said, adding that Carolina’s willingness both to authorize the report and to respond to various options shows that the University is serious about effecting real change.

An anonymous donor paid for the study, and Bain will remain involved with the University as the process of choosing and implementing options unfolds. Bain offered to return pro bono, probably in 2010, to do a “10,000-mile check-up” to assess the changes, Thorp said. He added that he welcomed the visit as a way to ensure that the options chosen by the University would be effective.

Pinpointing problems
Ritch Allison, a partner with Bain and a Carolina alumnus, highlighted the level of input from the University community when he reviewed the final report with trustees. Allison said the multiplicity of responses from students, staff and faculty helped Bain pinpoint problem areas and develop options for addressing them. Allison said the University had multiple layers of management that exacerbated complexity and led to inefficiency and redundancy. More than half of supervisors, for instance, managed no more than three people, and in some instances there were nine layers of management between the chancellor and employees.

He said the University had more than 400 separate departments as well, far more than would be expected for a university of this size.

The scope of the study includes University administration, all 14 schools, General Institutional Support Funds and auxiliary enterprises (Energy Services, Facilities Services, Printing and Tar Heel Temps). It excludes the UNC Health Care System, UNC Physicians and Associates, new sources of revenue and capital projects.

Among the areas Bain identified for the largest potential savings were procurement, information technology, human resources, centers and institutes, and energy services.

Already, Thorp said, the University has moved to achieve energy reductions by adjusting building temperatures and has begun to make some of the proposed changes for achieving cost savings with centers and institutes.

Thorp said he would also announce some personnel changes that would help to simplify the organizational flow chart (see related story).

“I hope everyone understands that by asking (Bain consultants) to come back and check up on us in a certain amount of time we are putting ourselves on the hook as much as we can to get this done,” he said.

Moving forward
As a step toward moving the process forward, Thorp announced on July 24 that Joe Templeton, immediate past faculty chair and former chair of the Department of Chemistry, would manage the University’s response to the Bain report. Templeton agreed to take on a part-time role as special assistant to the chancellor for planning and initiatives.

“I think it’s imperative that we move quickly to analyze the options presented in the report and to act on those that will help us be a more efficient, effective institution,” Thorp said in a campus e-mail.

“Joe’s knowledge of the University is extensive, and I can’t think of a better colleague to have working next to me. His deep understanding of Carolina’s operations and culture is especially important as we examine the Bain report,” Thorp said.

Templeton will continue to teach and direct graduate students. He will receive a stipend for the new role, but his nine-month salary will not change.

“The Bain report identified lots of opportunities for streamlining our operations that we intend to both explore and exploit,” Templeton said. “It will be important to gather input from, and build commitment within, the Carolina community as we move forward in working toward a more efficient and effective University.”

For more information about the Bain final report, including video comments from Thorp, refer to universityrelations.unc.edu/budget. Thorp also wrote about the Bain study in a July 29 opinion-editorial column in The News & Observer (www.newsobserver.com/opinion/columns/story/1624789.html).

INSIDE THE PRINT EDITION: AUGUST 12, 2009

Aug. 12 issue
Click here to read the AUGUST 12 issue as a pdf

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