Frequently Asked Questions
Q. What is Operational Excellence intended to accomplish?
A. Our university and our campus are experiencing unprecedented fiscal challenges; now more than ever we must redouble our efforts to ensure that as many of our resources as possible are directed toward the academic and research endeavors that are core to our public mission. Operational Excellence will begin with a six-month assessment of our operations, compare them with best practices (inside the campus and among other leading organizations), provide a framework to assemble current options and develop new ones that will reduce expenses, improve service delivery, streamline work processes, and manage risk appropriately. As a community we are justifiably proud that Berkeley is known for its world-class academic and research efforts; we believe we should aspire to the same high standards with respect to the way our campus operations function.
Q. What aspects of campus operations will be studied?
A. The fact-based assessment will include the processes, practices, policies, organizational structures, and systems that support Berkeley's core mission, such as technology, finance, business services, human resources, student services, fundraising, and other non-academic services. We will work closely and inclusively with central units and campus departments on the assessment. The ultimate goal of this fact-finding mission is to identify tens of millions of dollars in annual savings, which can be redirected from operations directly to our core academic and research mission.
Conversely, direct aspects of teaching and research that are under faculty governance, as well as options to increase revenue such as registration or education student fees, are out of scope.
Q. Why are we hiring external consultants?
A. External consultants, experts in large-scale transformational change, can work quickly and with focus to help us meet our financial targets on the desired accelerated timescale.They will bring transformation experience from many other organizations, including some in higher education, to help us identify results that may not be obvious to many of us who have been inside the Berkeley environment for many years. It is true that Berkeley has, dispersed over the campus, many of the talents and much of the expertise that could come up with a plan for improvements. However, we recognize that "self-diagnosis" is not always impartial, that fresh ideas from outside our campus may have a role in helping us improve, and that the limited availability of internal staff to spend several months full-time on this project would delay both the assessment and any subsequent implementation of streamlining opportunities.
Q. Why can't we use our own faculty experts to carry out the assessment? added 10/15/2009
A. We are using Berkeley's talent and expertise, both in the current assessment phase and when we are ready for implementation. The Project Leadership Team is made up of senior campus leaders who are experienced in organizational analysis and improvement. Faculty, students, staff, and alumni are serving on the Steering Committee that oversees the assessment, including a faculty member from our Business School. Senior leaders who manage the functions under review — as well as professional staff in those areas — make up the project team. In addition, the team will consult with hundreds of staff and faculty members, both individually and in campus organizations, as they gather data about our current operations and develop recommendations for cost-savings and organizational improvements. We have no doubt that the talent and creativity of our community will help ensure the best possible set of recommendations. Dean Rich Lyons of the Haas School of Business confirmed recently that external perspective and neutrality is critical for success in this kind of effort, as well as an extended period of attention from specialized, full-time experts, which is not available from existing faculty with full-time teaching and research workloads.
Q. How can we pay for this when we are cutting budgets and reducing staff?
A. The assessment will be paid from a fund controlled by the Chancellor that has been supporting infrastructure investments across campus for many years. A number of our infrastructure investments generate savings that can be used to repay the initial investment and that is our expectation with this investment. This will also be the case for Operational Excellence, whereby the savings from actions we take to become more efficient will repay the fund over time. Further, the contract we arranged with the consulting firm allows us to pay half now and half in the next fiscal year, which makes it easier for us to manage the expense. As we manage with fewer state resources, we must take actions to ensure that as many of our resources as possible are directed toward the academic and research endeavors that are core to our public mission. Given the targeted savings from achieving a new level of operational excellence, we see the cost as a necessary and wise investment in helping to achieve our goals.
Q. How are you incorporating lessons from past studies and reports?
A. We are already taking full advantage of the work, insights, and lessons learned through previous efforts. The assessment team is reviewing all relevant reports produced over the past 10 years and welcomes continued input. We will also build on the ideas from members of our own community that have been generated, such as implementing eProcurement, ideas already submitted to Budget Central, restructuring initiatives already underway, and the business process improvement series. We know that many good ideas have been identified, and expect that Operational Excellence will help create the framework and momentum to bring these ideas to implementation.
Q. Why do you believe this effort will be successful? added 10/15/2009
A. We are confident that our campus is ready to make the significant changes needed in our organization, our processes, and our culture. We have the critical elements in place, including an urgent and shared understanding that we must drastically reduce expenses and streamline operations. In addition, several critical components will contribute to making this work, including participation in the Operational Excellence assessment by faculty, students, and staff, a commitment from campus leadership to lead and manage the process of change, and a talented pool of functional leaders and departmental managers who can help to implement changes once the campus leadership selects the highest priorities and most feasible options. In addition, we have the support of a highly respected consulting firm to provide a fresh perspective and external benchmarking to help us determine where to focus our energy so that we can design a successful implementation.
Each study done in the past has had a different focus; some were looking at organizational structure but not cost-savings, for example. Typically, a study results in recommendations that are then presented to campus leaders for decisions; not all recommendations are feasible for implementation. However, many recommendations from past studies have been implemented, such as the many business process analysis projects completed across campus over the past two years. We have also implemented a number of successful large change efforts in recent years, including a complete overhaul of our antiquated job classification structure – an initiative that positions us as a leader in the entire UC system and also originated from a campuswide assessment, and was implemented with help from outside consultants.
Q. Will campus staff be working with the consultants on the assessment?
A. Yes; this is a Berkeley-led initiative. The work being performed by the outside consultants is but one input into the many that will feed into our decision-making process. The Chancellor has appointed a Steering Committee that includes faculty, staff, students, and alumni. Another team of staff with the operational and technical expertise needed to work on the assessment will be directed and coordinated by senior campus leaders. During the assessment phase, many campus managers, academic leaders, and staff will participate in a variety of ways.
Q. How will the assessment team learn from those of us who really know the work?
A. A key feature of the assessment phase is to interview those who manage and carry out the business of our campus. The current strategy calls for interviews with hundreds of people across campus. We expect to circle back to many units and departments mid-way through the assessment to get feedback on the information developed and the ideas generated.
Q. What happens to the Operational Excellence suggestions from campus, and what happens to the suggestions from Budget Central? Revised 12/3/2009
A. We have received more than 100 email messages from staff, students, alumni, and faculty members, most including constructive suggestions for streamlining operations and/or reducing costs. These messages are being categorized by topic (HR, IT, finance, etc.) and posted to the team's shared workspace for review by the team members working on each topic. Some members of the project leadership team are reviewing all the messages to ensure that we are aware of common threads and trends, as well as volunteers to participate more actively. The Chancellor has also reviewed most of them, and excerpts are posted on this website.
In a very few cases, messages were rudely worded and did not contain any suggestions for improvement; we have not included these in the posted summaries.
Suggestions are forwarded without the name of the sender. If the working team wants more information about your suggestion, you may be contacted for permission by the one person who receives all the submissions. If you would like to be contacted, you could indicate this in your message.
Many of the messages sent over the past eight months to Budget Central have already been handled or forwarded to appropriate units for follow-up; however, they are also being reviewed by the Operational Excellence team.
Q. How were the faculty and staff Steering Committee members chosen? added 10/23/2009
A. The Academic Senate's Committee on Committees identified a list of possible faculty members to serve on the Steering Committee in their usual process. After receiving the names, the Chancellor consulted with Executive Vice Chancellor & Provost George Breslauer, and with Christopher Kutz, chair of the Berkeley Division of the Academic Senate, and selected Professors Bustamante and Wolfram to serve on the Steering Committee. The staff representative, Roia Ferrazares, was selected from a slate of nominees provided by the Chancellor's Staff Advisory Committee and the Berkeley Staff Assembly. The OE leadership team interviewed several candidates and made a recommendation to the Chancellor for the final decision.
Q. How are other people on campus participating? added 10/23/2009
A. Many staff members are participating on the project team, and additional students, faculty, and staff are contributing to the assessment through group and individual outreach meetings and by sending ideas to oe@berkeley.edu. During the assessment phase the team expects to talk with hundreds of campus community members
Q. Is this going to result in unfunded mandates for departments? added 10/15/2009
A. We cannot predict at this juncture what the final recommendations will be, and which options we will select. However, we do know that both central units and campus departments currently have some duplication of effort and we need to identify those areas where we can streamline operations. Academic and administrative leaders have been working to reduce costs and maximize resources for a number of years as the university has faced budget cuts. It is clear now that in order to continue administering such a large organization with dramatically fewer dollars, we must significantly restructure our operational functions, and that changes in central offices alone cannot achieve these savings because much of the operational activity takes place outside the central units. A key aim of our assessment is to identify areas of overlap and duplication and design solutions to streamline them. As we move forward with option development, we will vet the ideas with the Cabinet, the OE Steering Committee, campus leadership bodies such as the Council of Deans and Chief Administrative Officers, and many others who have first-hand knowledge of the challenges that implementation will present.
Q. Who will decide which changes to implement?
A. The Chancellor, with advice from the Steering Committee and other campus leaders, and informed by providers and users of campus services, will determine how to prioritize the most appropriate improvements and whether to proceed with the implementation of the options selected. Those options will be identified based on a set of criteria such as cost, difficulty, risk of not changing, sequencing with other efforts, and the academic calendar. Again, the goal is to identify tens of millions of dollars in annual savings, which can be redirected from operations directly to our core academic and research mission.
Q. How was Bain selected to support Berkeley in this assessment? added 10/15/2009
A. Over the course of this year, our campus launched a number of initiatives to address the escalating reduction in funding. After gathering input from a broad range of campus leadership and management groups, the Chancellor asked Vice Chancellor Frank Yeary to explore how Berkeley might implement a program to improve operational efficiency across the campus and at a large scale. The Chancellor appointed a steering committee, (link to structure page) and a Request for Proposals (RFP) was developed with input from that committee as well as several functional leads on campus. The RFP was issued to four consulting firms that had been identified as having experience in large-scale transformative change in higher education institutions with the objectives of cost reduction and service improvement. All four firms submitted proposals, and Bain was selected on the basis of a defined set of criteria.
Q. Why does the Bain contract include costs for Phase 2 when we don't know what we will find in Phase 1? added 10/15/2009
A. California Public Contract Code section 10515 prevents anyone from submitting a bid for services after the same person or firm has made a recommendation for those services. The Office of General Counsel has advised us that a person or firm can include future implementation services in their original proposal for the assessment, and those services can be written into the contract, if certain conditions are met. The contract must "1) be as specific as possible for each phase, (2) list the potential recommendations that might come out of the consulting work (often, the campuses already have an idea of what the recommendations might be) and request an assessment of each as well as any other recommendation, (3) specify the payment that will be due for each phase or, if not known, a not-to-exceed figure, and (4) allow the University to terminate for convenience at least at the end of each phase (in particular, before the implementation phase)".
In simpler terms, in order to comply with the California Code, we asked the consulting firms that submitted proposals to explain how they might help us in Phases 2 and 3, so we could preserve our option to retain them past Phase 1. The contract includes estimates for these phases, which is another requirement of the Public Contract Code. These estimates were calculated using numbers we assume to be the uppermost costs for implementation of the subsequent Phases, with the full expectation that should we proceed, these costs would be covered through savings generated by the efficiencies gained.
Q. How long will it take?
A. The assessment phase is scheduled to last from early October through next spring. This will be a six-month fact-based analysis to identify potential savings. After that, we will consult with campus leadership to decide on potential next steps. In the end, tens of millions of dollars will likely be identified that could be redirected to our core academic and research mission if we are able to work through what may present difficult and challenging choices.
Q. Why are we waiting to make improvements?
A. We are not waiting to make improvements and, in fact, there are many initiatives already underway. We expect to identify savings opportunities that can be achieved in both the short and long term. We do, in fact, expect to identify some immediate savings generated from things like higher volume discounts from negotiated vendor contracts or the elimination of policies that duplicate efforts across campus. Other changes will require upfront investments of time and money or will be organizational and behavioral in nature, with the benefits being realized over a longer time horizon. We won't delay if we uncover short-term cost savings opportunities. With appropriate campus review, we will implement these quick-win improvements as soon as we can.