Good Enough

1
Good Enough!

• Robert B. Kvavik
• Associate Vice President
• University of Minnesota
• 3rd Annual NJEdge Technology in Education
  Conference
• Harrison Conference Center
• November 2, 2005

2
Outline

• Context What is Driving Change?
• Study Objectives and Approach
• Overall Findings
• Analytical Framework
• Key Findings by Process
• Role of Technology
• Drivers of High Performance
• Whats Next and Conclusions

3
What is Driving Change?
Fire
Fuel
Budget Cuts
Quality Circles
Regulatory Complexity
Dont Automate, Obliterate!
Enterprise Resource Planning
Rising Customer Expectations
The New Economy
Competition for Resources
Good To Great
Board Expectations
IT Doesnt Matter
4
What is Driving Change?

• Rising customer expectations and demand for
  customer convenience and control
• Reduction of administrative costs
• Demand for simplicity and transparency in an
  increasingly complex environment
• Elimination of procedural controls/simplification
  of processes

5
What is Driving Change?

• Efficiency
• Effectiveness
• Customer satisfaction
• Reduced business risk
• Accountability

6
What is Driving Change?

• Reduce, eliminate, or transfer costs lower
  headcount and/or transaction costs, outsource,
  eliminate duplication and facilities
• Increase revenue higher yield, new markets and
  products/services, higher productivity
• Avoid new costs for existing or new services and
  functions, transfer effort

7
Efficiency

• More efficient relationships between the
  university and students
• one-stop self service, linked and automated
  transactions
• Digitizing and scalability
• digitizing the product or services we provide to
  an expanding and use-intensive customer base
• Velocity
• the value of speed in the delivery of the product
  or services we provide paperless financial aid

8
Effectiveness

• Planning and planned outcomes with strategic
  costing of effort
• Reporting and performance (yield)
• Rational procedures and policies

9
Satisfaction

• Customer relationship management (CRM)
• Ease of use (LMS)
• Customizing
• customizing the product or service we provide
• students and faculty are expecting new ways of
  learning and doing business with the university

10
Study Objectives

• Analyze the state of process performance
• Assess what difference technology makes
• Determine institutional plans for further process
  improvement
• Identify what differentiates high achievers

11
Where are We and Where are We Going?
Process
Collectively owned
Unit owned
Enterprise-wide system (ERP)
Controlled analysis of public data
Collectively owned
Data
Open analysis of controlled data
Organizational silos
Unit owned
12
First Phase Localized Process Improvement

• Focus on processes within a functional department
• Change processes by simplifying work-steps and
  rationalize policies improve form design,
  altering office layouts.
• Improve hand-offs to other offices
• Historical roles and responsibilities are usually
  retained

13
Second Phase Reengineering

• Focus on processes from end to end
• Change processes by eliminating work-steps and
  alter policies
• Seek to eliminate hand-offs between offices
• Historical roles and responsibilities change
  significantly

14
Third Phase ERP-Enabled Process Improvement

• ERP is catalyst for process change
• Redefine end to end process using the automation
  and workflow capabilities of the software
• Sometimes accompanied by a rethinking of policy
  and organizational roles and responsibilities
• Begin to decentralize work to the end customer

15
Next Phase Post-ERP Process Improvement

• Emphasis on using the web to promote self-service
• Shift entire responsibility for processing out of
  some central departments
• Focus on using technology to automatically
  trigger services
• Need to rethink policies and division of
  responsibilities between offices still persists

16
Approach

• Select and define processes
• 48 processes in five areas
• Quantitative survey
• 335 institutions
• Qualitative Interviews
• 32 administrators at 29 institutions

17
Survey Respondents
18
Summary Findings

• Process performance ranges from adequate to
  satisfactory
• Transactional processes outperform monitoring and
  managerial processes
• Highest levels of performance in student services
• Lowest in grants management
• Institutions seek to be leaders in processes that
  impact recruitment and retention

19
Analytical Framework
20
Optimizing vs. Satisficing

• Optimizing
• What is the best possible way to perform this
  process?
• Satisficing
• Do the benefits of the optimal process outweigh
  the costs of achieving it?
• If not, is there a solution that meets base needs?

For many business processes, institutions
satisfice.
21
Cross-Process Leading Performers
22
Cross Process Lagging Performers
23
Cross Process Greatest Change
24
Cross Process Least Change
25
Finance Process Performance

• Institutions ranked themselves between adequate
  and satisfied.
• Lowest performance was for develop budgets
  process.
• Highest performance was for small dollar orders
  process.
• Less than 1 of institutions considered their
  processes exemplars.

26
Finance Process Performance
27
HR Process Performance

• Overall institutions ranked themselves as
  adequate.
• Processes not supported by base ERP packages
  performed lower.
• More managerial HR processes were poorer
  performers.
• Few institutions claim to be leaders.
• Few institutions have recently changed their HR
  processes.

28
HR Process Performance
29
Student Process Performance

• Reported the highest mean process performance in
  the study.
• Fewest number of institutions reported student
  processes to be at risk.
• Recruit students, advising and degree audit
  appear to be hardest to change.
• Baseline ERP capabilities also shape student
  process performance.

30
Student Process Performance
31
Grants Process Performance

• Process performance was barely above adequate and
  difficult to change.
• No more than 30 of respondents are satisfied
  with any of the grants processes.
• Three processes were considered at risk by 20
  of respondents.
• Few institutions are attempting to change their
  grants processes.

32
Grants Process Performance
33
Reporting Process Performance

• Overall institutions ranked themselves as
  adequate.
• Reporting and analysis of the workforce received
  the lowest mean performance in the entire study.
• Largest percentage were satisfied with enrollment
  management reporting.

34
Reporting - Performance
35
Role of IT

• An ERP system (80) and Web self service (68)
  were used most often
• ERP systems used most often to improve finance
  processes (33) followed by HR and student
• Web used most often to improve student processes
• Regression analysis reveals the web as the most
  important technology

36
Technologies in Use
37
Technologies with Greatest Impact
38
Identifying the High Performers

• Leadership, planning, and technology were the top
  3 contributors to process innovation.
• Leveraging employee suggestions was the most
  important determinant of process performance
• Effective use of technology and the ability to
  forge cross-functional solutions were key
  differentiators among institutions

39
Differentiating Institutional Performance
40
Next Steps

• Current
• Information is the basis of power and is rationed
  carefully
• Rules driven
• Process driven

• Envisioned
• Common and shared information is the basis of
  consensual decision-making
• Information driven
• Rules embedded in applications

41
Next Steps

• Current
• Need approvals
• Vertical
• Silos
• Controller
• Culture of anecdotes
• Culture of compliance
• Specialists

• Envisioned
• Empowered people
• Horizontal
• One-stop shopping
• Facilitator
• Culture of information
• Culture of trust
• Generalists

42
Next Steps

• Current
• Locally sub-optimized
• Information is captive and protected
• Services mapped to organizations
• Departmental data/solutions
• Hierarchical/specialized structures

• Envisioned
• Institutionally aligned
• Information is ubiquitous and shared
• Services integrated and seamless
• Enterprise data warehouse solutions
• Open structures and processes

43
Next Steps

• Exploiting the untapped functionality of the ERP
  systems
• Extending the usefulness of the ERP systems with
  new technologies such as portals, workflow, and
  others

44
Next Steps

• Continuing standardization of systems,
  transactions, and institutional processes
• Establishing institutional performance frameworks
  and metrics and aligning ERP systems to produce
  meaningful performance information

45
Next Steps

• Expanding data warehousing and reporting
  capabilities generally
• Aligning staff and training to the new
  organizational, technical, and service realities

46
Next Steps

• Re-thinking the institutional vision, governance
  structures, and interdependencies
• Reinvention of organizations and processes

47
Conclusions

• Optimize processes that have the greatest
  strategic impact
• Conserve resources maintain adequate
  performance for commodity processes
• Insure that no process is at risk
• Recognize that performance requirements are not
  static
• Foster a culture of improvement

48
Conclusions

• Rationalize technology investments
• Support commodity processes with commodity
  technology
• Make targeted investments in differentiating
  technologies in strategic areas
• Match technology investment with institutional
  willingness to change

49
Questions

• Kvavik_at_umn.edu