Extending Shared Services Across Multiple Entities at the University of Nebraska

1. Extending Shared Services Across Multiple Entities at the University of Nebraska Sherry Amos SAP Higher Education and Don Mihulka Associate CIO University of Nebraska

2. Agenda • Defining Shared Services • Industry Trends and Case Studies • University of Nebraska – history • Nebraska State College System – history • Partnership – Shared Services • Guiding Principles and Project Milestones • Technical landscape • Critical Success Factors • Challenges • Q/A

3. Diverse Missions Public ROI Policy / Legislation Banking Services Records & Archives PublicAdministration Public Utilities Education Infrastructure Research Social Services Constituent Services Defense Tax & Revenue Mgmt Private Healthcare Providers Non Profit / Charitable Organizations PublicSecurity Energy Health Retail Services Economic Aid & Development Private Sector Business Public Broadcasting Justice Transportation PostalServices

4. Challenges • Optimize resources • Deliver responsive services • Improve productivity • Reduce IT complexity • Retaining knowledge

5. Shared Services Trends • 70% are, or intend to use, shared services as a strategy to enhance service and increase efficiency • 54%use a shared services model now, while 16% expect to introduce shared services within the next three years • 75% stated a shared services model would make its deepest impact on business process improvement • 82% cite cost reduction across multiple departments as the most compelling reason to use shared services Source: http://webservices.sys-con.com/read/298107.htm

6. Agency Agency Shared Service Center Agency Agency Agency Agency Agency Agency Agency Agency Agency Agency Shared Services Centralized Decentralized Standardized Outsourcing • Strengthen enterprise oversight • Same, but disconnected processes and systems • Services funnelled to existing agency or department • No service level agreements, no performance targets • Solely cost focus, financial ROI • Run agencies autonomously • Different, separate processes and systems • Different IT and functional staff • Collaborative strategy • Onsite, semi-autonomous provider to source services • Accountable to customer • Performance monitored against defined SLA’s / MOU’s and targets • Service excellence focus, financial, social and political ROI • Governance / Ownership • Offsite • Access to commercial sector capabilities • Cost reduction is primary motivator • Profit center for provider • Cost and effort to manage relationship with provider • Potential political impact Defining Shared Services

7. Magnitude of Pain Fragmented, inconsistent processes and inflexible technologies reduces resource productivity and responsiveness while raising costs “…estimates the total government savings from the use of shared services could amount to USD$3.3 trillion worldwide over 10 years — equal to the amount spent annually on healthcare worldwide in 2005 or the estimated cost of the United States’ entire federal budget for 2008. …the primary focus of shared services initiatives is to cut costs to reduce the burden on taxpayers and balance government accounts. In Canada, there is an additional focus on improving citizen services, which A.T. Kearney identified as a best practice. …technologies to enable shared services will lead to improved communications and greater collaboration.” Source: http://newsroom.cisco.com/dlls/2007/eKits/AT_Kearney_Report_070307.pdf

8. Province of Nova Scotia, Canada • Operational ROI - saved taxpayers $43M CDN • Political & Social ROI - all government departments, 8 school boards, numerous public health and academic institutions across the province are supported via shared services deployment • These organizations serve 80% of the provincial population • Supporting 60% of all municipal transactions Extending the Benefits of Shared Services

9. Proof Point: US Postal Service “The Postal Service is replacing its existing outdated human resources technology with a fully-integrated system to streamline, standardize and automate HR processes. Once fully implemented, the new system – called PostalPEOPLE – will be the largest of its kind anywhere. PostalPEOPLE replaces a system that consisted of over 3,800 Postal Service HR professionals relying on more than 200 processes and some 70 systems to support nearly 700,000 employees and facilitate millions of personnel transactions each year. PostalPEOPLE is helping to increase efficiency, reduce costs and provide employees with individualized attention and access to their personnel files and other HR-related information 24 hours a day, seven days a week. An integral aspect of PostalPEOPLE is the new Shared Services Center… One of the main benefits of PostalPEOPLE is that it allows employees to perform routine HR tasks when it is most convenient for them… Another advantage to the new system is that it provides the Postal Service with one view of the employee.” Source: US Postal press release July 17, 2006 http://www.usps.com/communications/news/press/welcome.htm

10. Transformation Driving Shared Services and Collaborative Outcomes PUBLICVALUE Collaborative outcomes Business process platform Shared services EVOLUTION OF GOVERNMENT PROCESSES Standardized processes Suite Manual processes Best of Breed Proprietary / Legacy EVOLUTION OF IT CAPABILITIES

11. Key Success Factors Communication & change management • Top management buy-in, transparency in project approach Leadership & management support • Clear focus and sustainable momentum Accountability & governance • SLA’s or MOU’s, frequent monitoring Relationship and rapport building • Ability to minimize cultural barriers Innovative project approach • Focus is on redesigning and roll out in “bite sizes” to limit risks Teamwork and competency • Increases the success of the project

12. University of Nebraska Case Study

13. University of Nebraska - history • Four campus system – geographically diverse campuses throughout the state • 12,000+ faculty and staff • 47,000+ students • Governed by an elected Board of Regents • State agency • Implemented SAP ERP in 1999 – went live with finance, materials management, asset management, human resources and payroll

14. Nebraska State College System (NSCS) - history • Three campuses, geographically diverse institutions throughout the state • 900+ faculty and staff • 8,000+ students • Governed by an appointed Board of Trustees • State agency • Use the State of Nebraska ERP system, however doesn’t fully meet their needs. • Began review process for a new ERP system in 2007

15. Partnership Background • In December 2007, the Governor of Nebraska recommended to the University of Nebraska President and NSCS Chancellor that a partnership be formed to combine efforts to address the NSCS needs for a Financial, Human Resource/Payroll system, and the selection and implementation of a new Student Information System. • Implement a common ERP solution among state supported higher education institutions. • Save cost, time and effort.

16. Guiding Principles • NSCS will utilize the same business processes as the University of Nebraska. • The State of Nebraska will allow NSCS to operate as the University does in the area of finance, budget and HR. • Development, except for planned maintenance for UN will stop during NSCS implementation. • NSCS will go live with new SAP Budget system at the same time as UN.

17. Guiding Principles – Part 2 Also:  • We will do this without disruption to the existing University business environment. • We will segregate NSCS data from University data. • University will provide ongoing system support and enhancement for NSCS.

18. SAP Implementation for NSCS • We decided the best way to accomplish the project objectives cost effectively was to incorporate NSCS into our existing production instance, system and client. • We will use master data and authorizations to differentiate NSCS. • Another instance would be like a new ERP system and thus reduce the overall cost savings.

19. Technical ERP Landscape Enterprise Server Database Server Application Servers UNIX - AIX DB2 • IT Support for SAP ERP: • Systems administration (Basis): 5 FTE • DBAs (DB2): 1 • Change Mgmt/Training&Doc 4 • Security support 1 • SAP applications developers 8 • Data warehouse developers 3 • ___ • Total: 22 Portal/BW servers Intel - MS – SQL SAP Portal Web – browser

22. Project Milestones estimated planned dates • Scope definition 9/15 – 9/26 • Enterprise structure and master data definition 9/29 – 10/10  • Business process definition and design 10/13 – 11/7 • Configuration and development 11/17 – 2/27 • NSCS development moved to NU Development System 3/1 • Development moved to Quality Assurance System 3/15 • Unit Testing 3/16 – 4/24 • Integration Testing 4/27 – 5/15 • Development moved to Production System 5/17 • Data Conversion and Cutover 6/1 – 6/30 GO LIVE 7/1

23. Critical Success Factors • Executive sponsorship and involvement • Clearly defined project scope • Functional project vs. IT project • Project representatives empowered to make decisions • No modifications

24. Challenges • This project is unique since there is no common governance. • It has aspects of both a new implementation (which it is for NSCS) and an upgrade since it’s being performed in a live productive environment. • We have ongoing maintenance and support issues to address • Annual year end maintenance • Benefits Open Enrollment, W-2 and 1099 Year-end Processing  • Budget System Deployment for both the University and NSCS

25. Status of Project to Date • So far, so good. • Scope is defined (we only pared down University processes, we did not add new ones for NSCS) • Master data design completed • Business blueprint now being created • We have more to learn over the next 9 months!

26. Q/A ?