George Carlin’s word skits made me laugh… and sometimes think. His monologue about “shell shock” morphing to “battle fatigue” then to “post-traumatic stress disorder” lampoons how we have come to use less disturbing, more benign words to camouflage reality. It came to mind when the Governor made his budget proposal.
(No, not our current governor. I wrote this and the following excerpts in my December 2009 column regarding Gov. Haley Barbour’s proposed budget.)
‘Shared services’ sounds benign…much more so than ‘consolidation’ or ‘merger’ doesn’t it?
But public CEOs didn’t smile when Haley Barbour said, “There is no reason for each of the 15 community and junior colleges to have its own back room operation, such as payroll, insurance, and purchasing. A single such administration operation should be set up, preferably combined with the same functions for IHL universities. Shared services saves money.”
NASA didn’t camouflage its intentions about shared services.
As deputy director of the Mississippi Development Authority, I was part of the team that competed to locate the NASA Shared Services Center at Stennis Space Center. In 2001, NASA began to study the benefits and costs of forming a “Consolidated Business Services Organization” to serve its ten facilities across the country. By April 2003, NASA concluded that such consolidation could improve efficiency and save money. NASA decided to use public-private competition to implement its plan, a process it called competitive sourcing.
To compete, Stennis Space Center added Mississippi and Louisiana as public financial partners. Computer Sciences Corp. (CSC), an eminent information technology (IT) and business process outsourcing company, became our private operating partner.
In 2005, this partnership won the competition based on both the best price and CSC’s strong performance record. To NASA, who was to do the work was as important as price.
Today, NASA still has multiple facilities, but its one shared services center in South Mississippi is saving taxpayers millions of dollars annually. What services were consolidated? Accounts payables and receivables; payroll; travel reimbursements; HR services and training support; IT services; and procurement.
Commercial banks figured this out long ago. Central operations centers provide back room services to multiple banks, sometimes in multiple states…consolidation that has saved banks millions in overhead costs without reducing market presence.
There are no operating or financial reasons for eight universities and 15 colleges – or 142 state agencies, 152 school districts, 82 counties, and 200 plus municipalities for that matter – to maintain separate back room operations.
The obvious lesson is that public CEOs could save lots of money through shared services with no harm to teaching or service functions. A no-brainer, right?
As president of the College Board I appointed a task force to develop a “no-brainer” IT shared services plan for universities. University CEO resistance was stultifying. Apparently, for many public CEOs, controlling their own stuff is far more important than efficiency.
And, sharing lessons control.
“You wouldn’t want somebody to come by and take some of your stuff?” smirked George Carlin to get a laugh.
(Our Legislature has so far laughed off shared service proposals, despite conservative Republicans gaining super majorities in the House and Senate. Politically, it’s easy to squeeze budgets, but hard to truly rightsize government.)