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Implementing theNew Business Architecture

University of California, San DiegoJanuary 18, 2006

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Goals

Manage growthControl costsImplement best business practices

Goals of the New Business Architecture

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Goals of the New Business Architecture

Strategies

Recruit and develop the best peopleStreamline processes and proceduresIntegrate applications within business portalLeverage new technologyEmbed performance management systems

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The Challenge

Since 2000/01:26% increase in students30% growth in research 17% reduction in State revenuesMore government mandates and requirements

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The New Business Architecture

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Provide integrated access to Provide integrated access to business transactions, policies and business transactions, policies and

trainingtraining

The New Business Architecture

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Establish UC as a Establish UC as a competitive employer and competitive employer and provide staff the tools to provide staff the tools to

improve productivityimprove productivity

The New Business Architecture

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Redesign processes to Redesign processes to improve our efficiency and improve our efficiency and

effectivenesseffectiveness

The New Business Architecture

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Invest in technology to Invest in technology to replace manual, paperreplace manual, paper--based work processes based work processes

The New Business Architecture

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Improve integration of Improve integration of and access to financial and access to financial

datadata

The New Business Architecture

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Incorporate metrics to Incorporate metrics to improve performance and improve performance and

manage riskmanage risk

The New Business Architecture

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Implementing the Business Portal

Business portal streamlines core processes

Administrative web sites eliminated

Eliminated paper input into financial system

Less paper handling means higher productivity

W2’s, direct deposits, other transactions online

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UCSD Business Portal

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Prepayments for University BusinessOnline vs. Paper

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Online 47.1% 47.9% 52.0% 73.1% 85.5% 91.3% 91.5% 96.3% 99.6%

Paper 52.9% 52.1% 48.0% 26.9% 14.5% 8.7% 8.5% 3.7% 0.4%

96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05

Streamlining Payment Process

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People Initiatives

Web-based training

E-recruitment

Employee self-service applications

Intuitive tools

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My Dashboard – Leave Activity Report

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Removing Steps Removes Costs

HR Budget per Employee

0

100

200

300

400

500

600

700

800

2000/01 2001/02 2002/03 2003/04

Year

Dol

lars UC San Diego

National Average

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Employees Supported per Training Staff

0

200

400

600

800

1000

1200

1400

1600

1800

National AverageUC San Diego

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Rapid Process Redesign

Identified and redesigned business processes that could potentially yield labor and cost savings in areas such as:

Financial Reconciliation, Invoice Approvals, HR Processes, Leave Accounting, Paper Use and Disposition, Federal Grant Reporting, and Payroll Expense Transfers

Initial Cost Savings/Avoidance - $1.2 million with annual savings estimated at $2.3 million as efforts progress.

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Disbursements

Disbursements Workload

500

550

600

650

700

750

800

850

900

950

1,000

1998 1999 2000 2001 2002 2003 2004 2005

Tran

sact

ions

(in

Thou

sand

s)

25

35

45

55

65

75

85

95

FTE

Workload

Actual FTE

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Leveraging Buying Volume

-

2

4

6

8

10

12

14

16

18

Mill

ions

of D

olla

rs

2001 2002 2003 2004 2005 2006*Fiscal Year

Procurement Savings/Cost AvoidanceNegotiated Savings & Avoidance ContractSavings Cummulative

*Projected

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My Dashboard: Financial Information

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

% Electronic Invoices vs. Paper Invoices

Electronic 18% 23% 26% 38% 54% 59% 58% 62%

Paper 82% 77% 74% 62% 46% 41% 42% 38%

FY97/98 FY98/99 FY99/00 FY00/01 FY01/02 FY02/03 FY03/04 FY04/05

Eliminating Paper and Workload

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Research Grant Workload vs. FTE

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Num

ber o

f Aw

ards

0

20

40

60

80

100

FTE

Number of Aw ards

Actual FTE

Streamlining the Management of Grants

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Transaction Percentage

0102030405060708090

100

FY90

FY91

FY92

FY93

FY94

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

Perc

ent W

eb In

put

WebManual

Manual vs. Web Input to Financial System

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E-Check Deposits

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

2002 2003 2004 2005

E-C

heck

Dep

osits

(in M

illio

ns)

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

Cos

t Avo

idan

ce(in

Mill

ions

)

E-Check Deposits Credit Card Cost Avoidance

Streamlining Deposit Process

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Strategic Energy Investments

Pac HallStein ClinicalSDSC

$1,375,700 $502,283 2.7

Turbine Retrofit $600,000 $260,000 2.3

Cognitive SciencesHVAC

$250,000 $45,000 5.6

Theater HVAC $200,000 $50,000 4.0

Multiple Lab Bldgs.HVAC, Valves, Sensors

$2,900,000 $547,170 5.3

Annual SavingsInvestmentProjects Pay Back in Years

$1,404,453$5,325,700Total 3.8 Years

Examples of Projects in 2005/2006

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Energy Savings

567

285

0

100

200

300

400

500

600

kBtu

/sf-y

rResearch Bldg. Energy Usage

Legacy facilities

New construction andretrofit facilities

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Generating our own Power Reduces Costs

Cogeneration of Power and Cost Avoidance

$7,202 K $7,540 K $7,980 K $8,067 K

$4,475 K

$-

$5,000 K

$10,000 K

$15,000 K

$20,000 K

$25,000 K

$30,000 K

$35,000 K

$40,000 K

2001-02 2002-03 2003-04 2004-05 2005-06*

Costs avoided throughCogenerated electricity

Cumulative

Original investment

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Financial Perspective

How do we look to resource providers?

Customer Perspective

How do customers see us?

Internal Process Perspective

Are we productive and effective?

Innovation & Learning Perspective

Do our people have tools to succeed?

Balanced Scorecard

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Top/Bottom 2-Box Ratio‘05: 10.2 7.8 6.1 6.3 5.8 5.0 8.3 7.3 6.6‘04: 6.8 7.4 7.7 6.3 4.8 4.5 7.8 3.0 4.7’03: 3.8 3.0 3.9 2.9 2.7 2.6 * * 3.0‘94: 3.3 2.8 4.1 2.7 2.5 1.6 * * 1.8

Service Attributes

Satisfaction Mean Score

Average % Evaluating 2005 = 11%2004 = 15%2003 = 13%1994 = 24%

N = 1699 for 2005 1139 for 2004

999 for 2003706 for 1994

* New for 2004

3.5

3.4 3.

5

3.4

3.7

3.7

3.7

3.7

3.6 3.

7 3.8

3.5 3.

63.8

3.8

3.8

3.7

3.7

3.7 3.

9

3.7 3.8

3.4 3.

5

3.4

3.3

3.23.

4

3.23.

4

3.4 3.

5

1

2

3

4

5

Overall Understandsneeds

Accessible viaphone

Responsive Effective advice Problemresolution

Know ledgeablehelpful staff*

Effective use ofBLINK*

Positivedirection

1994 2003 2004 2005

2005Overall

%

19.8% Extremely

49.5% Very

3.1% Not Very

24.0% Somewhat

3.6% Not At All

An Example of Performance Metrics

Grant Post-Award Management

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External Recognition

UC San Diego and the University of Minnesota cited as best practices in December 2005 cover story about administrative cost savings in universities

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External Recognition

“Using a combination of technological and organizational resources, UCSD fosters a continuous improvement cycle that constantly strives to enhance university business operations.”

Nov. 2005 Study by the EducauseCenter for Applied Research

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“In recognition of its innovative approach to cutting costs, solving problems, and increasing efficiency, the University of California, San Diegois the first university to be inducted into the Balanced Scorecard Hall of Fame.”

External Recognition

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Thank you