Transforming UT Modernization and Business Productivity Initiative

1. Transforming UT Modernization and Business Productivity Initiative TASSCC March 21, 2014

2. Transforming UT Societal and Economic Pressures Facing Higher Education Today • Affordability • Accessibility • Transparency • Accountability • Innovation • Reduced state support • Protracted Recession

3. Transforming UT Administrative Initiatives to Improve Agility and Reduce Costs • Administrative Systems Modernization • Shared Services

4. Guiding Principles Open and transparent communication Involvement of key stakeholders Strong governance Adoption of best practice business processes Customization used only where needed for operational or competitive advantage Opportunities for career development

5. Transforming UT Administrative Systems Modernization • Current Environment • Drivers to Change • Plan for Change • Expected Gains • Anticipated Challenges

6. Administrative Systems Modernization Current Technical Environment • 25+ years custom developed administrative systems • Mainframe – Adabas/Natural • Upgrades over time to add web capability • Developers embedded in the business area • Well-established developer community and training program • Increasing adoption of third party vendor products for specific business needs • Increasing development using other platforms and languages

7. Drivers to Change • 2004 – Commission of 125 • 2006 – Core Application Strategy for the Enterprise (CASE) • 2009 – Strategic IT Accountability Board (SITAB) Report • 2012 – Administrative Systems Master Plan (ASMP)

8. Administrative Systems Master Plan (ASMP) Case for Change • Desire to take advantage of technological advancements • Mitigate risks of relying on aging technology toolset (Adabas/Natural are reaching end of life) • Integration with third party open standard systems is very difficult and expensive in the current environment • Up-to-date standards and best practices are difficult with current toolset • Difficulty attracting and retaining workforce

9. ASMP Requirements • Create business driven systems and data management • Modernize the administrative IT infrastructure • Strengthen systems development processes

10. Buy vs Build Considerations • What will it take to re-tool and re-train workforce? • What is an appropriate strategy for customization? • What does the market currently offer?

11. Technology Waves – Administrative Systems Salesforce,Workday, Google SAP, Oracle, PeopleSoft, SunGard Cloud/SaaS Client Server Software 2000, SSA IA, MSA, Integral, Tesseract Mini Mainframe

12. Workday, Inc. (NYSE symbol: WDAY) • Established in 2005 by PeopleSoft founders Dave Duffield and AneelBhusri. • Mobile first, consumer-based design methodology with single code line. • Committed to serving the higher education ERP market. • Human resource, payroll and finance applications are fairly mature. Presently building student system designed to interact with today’s students (e.g. social media, mobility). UT Austin is participating as a strategic design partner.

13. Workday Customers State and Local Higher Education Texas Commercial

14. Architecture Site Application Communication Database

15. 2012 • Create Business Driven Systems and Data Management • Modernize the Administrative IT Infrastructure • Strengthen the Systems Development Processes ASMP Administrative Systems Master Plan

16. 2014 2012 • Implement Workday for HR/Payroll and Finance. Student-TBD. • Transition all other mainframe-based systems off mainframe. • Develop Strategic Reporting Master Plan and Enhance IQ • Implement Open Systems Technical Architecture (Integration and Development) • Develop, Test and Deploy Standards and Methodology Processes • Create Business Driven Systems and Data Management • Modernize the Administrative IT Infrastructure • Strengthen the Systems Development Processes Administrative Systems Modernization Program ASMP Administrative Systems Master Plan

17. Administrative Systems Modernization Program ASMP 2.0 • Workday Implementation • HR/Payroll/Timekeeping • Finance • Integrations • Student System Replacement • Document current processes, requirements, stakeholder needs • Initiate policy changes that will facilitate transition • Participate as design partner for Workday Student • Organizational Readiness • Communication including web presence/branding • Stakeholder engagement • Training

18. Administrative Systems Modernization Program ASMP 2.0 • New Technical Architecture • Open standards technology stack for hosting non-Workday applications, including custom development • Development, deployment and execution infrastructure and tools • Integration environment • Transition all mainframe-based systems off of mainframe • Comprehensive inventory • Develop roadmaps for transition/replacement • Data Management • Strategic Reporting • Business Intelligence • Data Governance

19. Expected Gains • Front of next wave of technology • Faster implementation • Best practice business processes • Intuitive modern user experience – attract and retain staff • More robust self-service • Enhanced mobile capabilities • Better analytics and access to data for decision-making • Improved ability to integrate disparate systems

20. Anticipated Challenges • Major change on multiple fronts • Culture shift – institutional level prioritization of resources • Hundreds of integration points • Scheduled down times with Workday • Loss of ability to customize • Scope and scale of effort to transition distributed systems • Workforce impacts • Financing

21. Transforming UT Shared Services • Drivers to Change • Current Environment • Plan for Change • Moving Forward • Financial Strategy

22. Drivers to Change • Steadily declining state support (general revenue) • Percentage of University’s budget • 1984-85: 47% • Today: 13% • Undergraduate tuition remains low, ranking second lowest in 2012-13 out of a 12-institution national comparison group • Cost to operate has risen (principally due to inflation) • Forced to limit salary merit increases • Funding for merit derived from closing unoccupied positions or laying off staff • Remaining staff left with an increased workload • Declining ability to attract and retain the best talent • Revenues to fund general operations are expected to remain flat or in decline for the foreseeable future

23. Drivers to Change 2013 Committee on Business Productivity Report Smarter Systems for a Greater UT • 13 Distinguished Leaders in Business • Advice on aspects of the University’s business operations and processes that could be improved, streamlined, and leveraged to better effect • Recommendations on asset utilization, technology commercialization, and administrative service transformation

24. Current Business Environment • Administrative workforce*: • Total of ~12,000 staff and students (~8,500 Full-time Equivalents**(FTEs)) • Total administrative headcount supporting HR, Finance, Procurement, IT = 4,500 staff (~2,500 FTEs) • Administrative activities are: • Highly decentralized operations with manual processes • Supported by administrative systems at end-of-life • Annual attrition: • Historical attrition trends for UT Austin staff supporting HR, Finance, Procurement, IT ranges from 500-600 people per year • Across all administrative staff, recent turnover attributed to layoffs ranges from 150-200 people annually per year • Limited shared services exists on campus today including: • McCombs School of Business (McCombs) • College of Liberal Arts (CoLA) • Central Business Office (CBO) • Information Technology Services Customer Support Services (ITS CSS) * Administrative workforce refers to non-faculty employees at UT Austin. Total administrative headcount and attrition ranges for HR, Finance, Procurement, and IT are estimates for initial planning purposes and will be updated over time. ** FTE = Full-time Equivalent and NOT Full-time Employee.

25. Plan for Change • Plan Phase activities included: • Number of participants across campus: more than 250 • Number of workshops, interviews, and group meetings: more than 100 • Additional Campus Dialogue activities included: • Number participants across campus: hundreds • Number of sessions across campus: about 40

26. Campus Dialogue Feedback Summary Five key themes emerged from Campus Dialogue that have changed the proposed Shared Services Implementation Plan. Feedback Response

27. Proposed Implementation Plan and Timeline for Pilots Pilot Approval Pilot Review Pilot Review Pilot Review Shared Services Decisions Establish Govern Pilots Plan & Prepare Transition Volunteers Operate Pilots Plan & Prepare Transition Volunteers Operate Pilots Plan & Prepare Implement Improvements Deploy to Pilots Track Benefits Prepare Assess Assess Assess Assess

28. Financials: Investment and Savings for Proposed Plan Based on input from Campus Dialogue, the pilots have lengthened the implementation timetable and the investment is now expected to pay back in Year 8. Expected perpetual annual benefits remain $30-40M.

29. Bringing It All Together ASMP 2.0 initiatives will have significant cost ~ $100M Modernized systems will help Shared Services to realize maximum efficiencies and cost savings Savings from Shared Services used to pay back cost of ASMP 2.0 Future savings re-invested in core mission

30. Questions?