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Consortiums, Collaboration, Centralization ... Conflict?

July 1, 2009

BOSTON -- There is strength in numbers, especially when the economy nosedives and the revenue you need to accomplish everything you want declines. So it's not surprising that a pair of sessions on cost-saving and other collaborations among colleges at this week's annual meeting of the National Association of College and University Business Officers attracted scores of interested chief financial officers and controllers.

It's also not surprising, given the way such meetings are constructed, that those leading the sessions painted a generally upbeat picture of what they'd accomplished through the consortiums, joint ventures and other collaborations among their institutions. Officials from two Massachusetts coalitions (the Boston Consortium for Higher Education and Five Colleges, Inc.) described a broad array of steps their member institutions had taken (sometimes all together, but frequently among smaller subgroups) to attack problems or pursue opportunities big and small, and administrators from two State University of New York colleges discussed several major joint initiatives that had saved money or improved efficiency for participating members of the massive 64-campus system.

But presenters at the two sessions did not pretend that multi-institutional collaboration always worked, or that it was necessarily easy. "Patience is very important," Mary Jo Maydew, treasurer of Mount Holyoke College and a leader in Five Colleges, said with purposeful understatement about getting colleges with differing missions, cultures and needs to find commonly acceptable solutions. Kenneth Levison, vice president for administration and finance at SUNY's College at Geneseo, was blunter in laying out the "ugly" (along with the proverbial good and bad, of course) of the massive New York system's various efficiency efforts -- most of which arose, he and a co-presenter said, when system leaders sought to impose top-down solutions instead of letting ideas bubble up from the campuses.

"Mandating centralized administrative or computing services from the top just has not worked," said Leif Hartmark, vice president for finance and administration at SUNY Oneonta, Levison's collaborator in Tuesday's session. "What has seemed to work well in our environment have been consortial agreements -- particularly voluntary campus arrangements that have come together over time based on common need."

While both sessions focused on how colleges could work together to improve efficiency and save money, the presentations had different starting points. The session by the SUNY officials sought to contrast what they characterized as the significant difference between "centralization" (which they said had had very mixed results when mandated by SUNY officials) and voluntary "collaboration" among groups of SUNY colleges (and sometimes involving private colleges in New York, too).

“There are good things about centralization,” said Levison, citing the “tremendous leverage” that SUNY’s 64 campuses and as many as 440,000 students provides in negotiations with vendors and service providers, and the economies of scale the university system can achieve. Its systemwide contract with Oracle, he said, has earned SUNY more than $300 million in “cost avoidance” for license and maintenance fees over the term of its most recent 10-year contract, for instance.

But the big downside of systemwide contracts, as he described it, especially those that require campuses to use a particular product or service, is that they “do not allow for campus management and flexibility, with little or no accommodation for local campus administrative culture and business practices.”
Example No. 1 of that, he said, was a longstanding requirement that institutions had to use a state travel agent to book all their travel, to the point that faculty and staff were not reimbursed for travel they arrange themselves -- even when they can find significantly cheaper fares on their own. (Hartmark noted that SUNY campus officials had found out just a month ago -- nearly a year late -- that state officials had determined that the SUNY system was not subject to the state travel requirement.)

That and other examples show, Levison said, that “centralization often inhibits campuses’ ability to operate efficiently and effectively.”
That stands in stark contrast to another approach to shared services among campuses, said Levison and Hartmark: consortial agreements, in which campuses themselves “have initiated these agreements, and therefore campus needs are in forefront rather than a central mandate,” said Hartmark.
There’s a significant role in these arrangements for a system office, he said, in terms of providing financial incentives to coalitions of campuses to develop consortiums that produce savings, and of offering some support to keep the consortiums running smoothly.

They cited several examples in which SUNY campuses (sometimes in collaboration with other institutions) have joined together to buy and maintain computer hardware and software (through the Information Technology Exchange Center), provide more effective and localized legal services, and, most recently, develop an interlibrary research sharing system that spans 40 colleges and 38 million volumes.

Library acquisitions are among the many areas on which the two Massachusetts consortiums in the other NACUBO session have collaborated, which also include energy use, rental housing, and public safety. (Mount Holyoke, Amherst and Smith College are expanding their latter collaboration by centralizing the dispatch operations for their security forces, said Maydew.)

The Five Colleges group has about 80 subgroups of institutional officials who meet to talk about possible areas of collaboration, suggesting an almost limitless array of options. But are there limits, and where do they lie? audience members wanted to know.

One asked if participants in the consortiums worried about a loss of identity if they worked too closely with other institutions.

Phil DeChiara, managing director of the Boston Consortium, played down that prospect and said he saw more concerns, “at the margins,” about the “loss of decisional sovereignty.” Andrew Evans, vice president for finance and treasurer of Wellesley College and vice chairman of the Boston alliance, generally agreed, citing the wide diversity of its members and their missions. “Because the Boston Consortium is so vastly different, in terms of size and programs, we don't feel any sense of competition in terms of the brand,” he said.

Maydew, though, envisioned some reluctance on the part of the Five Colleges in the realm of academic programs, such as significant sharing of majors and departments. “I think there really is a fear that as we do more together, things begin to blur,” she said. “There’s a view that what makes Mount Holyoke Mount Holyoke is the curriculum.”

Other areas have proven vexing just because they are complex, such as health care, said Evans (noting that the topic continues to perplex the country’s leaders, too). But he said he believes the Boston Consortium’s colleges may be closing in on an approach that could work, a far cry from the old days when people assumed “we can’t possibly collaborate, the pain would be too great…. Now, we’re trying to figure out, Is there a way to leverage disease management and other kinds of wellness related issues that would slow the growth of our cost of health care going forward. We have great hopes on this.”

That is the beauty of successful consortiums and other institutional collaborations once they’re developed, said DeChiara. “We’re able to keep things on the back burner, slowly moving ahead, when all of [the campus officials] have to confront the new problems of the day,” he said. “We’re not just tackling the simple, lowest common denominator things, but larger, more complex ones. It just takes time.”

 

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