Senior Fiscal Officer Meeting

1. Senior Fiscal Officer Meeting Thursday, November 17, 2011

2. University of MissouriShared Services Initiative In 2009, under the leadership of President Gary D. Forsee, the University of Missouri System instituted a wide-ranging effort to curb expenses and avoid duplication of administrative tasks. Referred to as the “Shared Services Initiative,” the project’s continuing goal is to enable the university to achieve operating efficiencies and effectiveness across the enterprise, and to serve as a model for best practices.

3. Shared services is a customer-focused organizational model that reduces inefficiencies and duplicative costs, and increases customer service by: • Continually improving the quality of services provided • Demonstrating superior customer service via metrics that benchmark effectiveness • Leveraging automation to improve processes • Examining policies to reduce manual effort and optimize associated processes

4. The first phase of the shared services initiative was to benchmark the University’s administrative processes in the areas of Human Resources, Finance, Procurement and Information Technology through the lens of a shared services approach to optimizing processes. The results identified that many processes were operating at a very lean per unit cost while others offered opportunities to be completed more efficiently. Further, the ones where the greatest opportunity existed were those that could best be optimized by changes in policy, procedure, and effectively implemented automation.

5. As a result, the second phase of the shared services initiative, started in November of 2010, is referred to as the “Operational Excellence Initiative” (OEI). Priority initiatives were identified, in response to the benchmark information received, to be implemented with an emphasis on evaluating policies and procedures for opportunities to adopt shared services characteristics, embracing shared guiding principles, driving waste out of processes, and fostering accountability by using metrics to measure success.

6. Travel and Expense

7. COMPASS (Hyperion Budget and Planning and Commitment Accounting The goal of this effort is to reduce the disparate planning processes (e.g. Access database, excel spreadsheets, etc.) in use today to a standardized budget template populated with production data resulting in a reduction in data entry, and dual data entry throughout the budget planning process. Given that 85% of the University’s annual expenditures are for personnel costs, this has a great potential impact on how University resources are managed. This initiative is to go live in by the end of calendar year 2011.

8. Vendor Payment Audit Based on typical industry experience for an organization of our size and complexity, it was estimated that an audit of payments to the University’s major vendors for the past 3 years may yield as much as $1 million in savings. Internal audit was engaged to perform the audit in August of 2011. Internal Audit (IA) obtained a download of the University's disbursements for the period July 1, 2009 - April 30, 2011. IA worked with management to evaluate the University’s disbursements and identify possible duplicates. The University chose to investigate payments that looked unusual in nature and reviewed all of those in excess of $5,000.  Only one payment was found to be a true duplicate and it is being pursued in conjunction with the vendor.  While this audit did not result in recovery of a significant amount of overspend, it reaffirmed the quality of our control environment around vendor payment processing and the University is encouraged by the results.

9. Strategic Procurement Initiative The University of Missouri System is working with many of the public four-year universities in the state to examine the projected benefits of participating in a statewide strategic procurement shared services program. This program would leverage the contracts the UM System already has in place to other institutions, resulting in supply and processing cost efficiencies that could ultimately result in significant cost savings.

10. Order to Pay The Order to Pay (OTP) project was initiated to automate University invoice processing, automate the payment process and capture early payment discounts, reduce time and effort associated with voucher processing, offering vendors flexibility in payment options, and using University defined parameters to capitalize on discounts and allowing vendors to manage payments coming from the University. It is estimated that the total net savings and new revenue to the University as a result of implementing OTP will be in excess of $9.4 million over the first 5 years. The project is being kicked off in the last quarter of 2011 to be implemented by the spring of 2012.

11. Document Life Cycle Strategic Alliance The Document Lifecycle Strategic Alliance resulted from the University seeking a partner best able to assist the university in improving productivity while reducing costs associated with the life cycle of documents.  As a result of the findings, the University of Missouri System immediately transitioned to Xerox for all new multifunctional devices. In addition, the goal of this new alliance is to reduce paper use, power consumption and landfill waste by improving every aspect of the document lifecycle, including printing, copying, scanning, faxing, design and delivery of print materials as well as electronic storage and retrieval.  The University and Xerox will partner on specific projects which will enhance processes and leverage more effective document life cycle and electronic processes.