Consolidation and Realignment of Business Services

06.19.2012 | Posted in News and Events

To: W. Randolph Woodson, Chancellor, NC State University

From: Charles D. Leffler, Vice Chancellor for Finance and Business

NC State University continues to face organizational and budget pressures that threaten the university’s mission of teaching, research, and outreach. To cut costs, some colleges and divisions have moved toward centralization, consolidation, or implementation of shared services. If we are to maintain focus on academic core activities, we must continue to reduce administrative expenditures at the college, division, and department levels. This will reduce the quality of services in the absence of a broader strategy to increase. For this reason, you accepted our March 11, 2011 Recommendations for Strategic Realignment to Increase Organizational Efficiency which included the consolidation and realignment of the university’s business services. The specific recommendation was to create consolidated Business Operations Centers on the campus to improve institutional effectiveness and strengthen NC State’s culture of service by ensuring that academic support activities and business practices are of the highest quality and least cost. The Steering Team created to evaluate this proposal has presented their final report and recommendations, and after gathering feedback from the campus, I am making the following recommendations to you.

Steering Team

The Steering Team was charged to develop a framework for establishing these Business Operations Centers. The Business Operations Realignment Steering Team comprising academic and administrative leaders from a cross-section of colleges, departments, divisions and units was appointed to serve in a planning and design capacity for the consolidated Business Operations Centers. Under the initial interim leadership of Don Patty, Assistant Dean for Finance and Business with the College of Natural Resources, followed by Scott Inkley, Executive Director of Business Operations, this team engaged the entire campus community, key stakeholders, and external subject matter experts in an intensive eleven-month process of review, analysis, and outreach.

Their April 11, 2012 final report provides broad recommendations pertaining to the organizational structure, staffing process, service delivery, and implementation of Business Operations Centers. The report is a framework for implementing the Business Operations Centers. For effective design and implementation, the Team recognizes that the details must be worked out with each college/division individually. The report was posted for campus review on April 12th, and many valuable comments, questions and concerns were received. I am not recapping the entire report in this memorandum but have attached it for your review. You will note the particular attention the Team gave to Guiding Principles and recommendations regarding service measurement, accountability and communication.

Current State

The existing system of business services on campus is more decentralized than it appears, with 36 major business units committing dedicated staff that in many cases lack the consistency in resources, processes, and training needed. In an effort to evaluate current transactional volumes, processes, and staffing patterns and to gain a better understanding of the current operating environment, the Steering Team conducted a Work Activity Inventory of almost 1,000 employees with the assistance of ScottMadden Management Consultants. An analysis of over one thousand work activity surveys from across the campus and multiple interviews indicate that there are 773 Full Time Equivalents (FTE) with $37,250,000 in salary providing general management/administrative and business support services at NC State.

The Business Operations Center (BOC) staff will come from these FTE and the associated salaries that are currently providing business services (human resources, finance, post award contracts and grants) to their colleges and divisions. There will also need to be some FTE from central business office units reallocated to the Business Operations Centers as approval authority for certain transactions moves to the BOCs. A post-implementation comparison with baseline data will be needed in order to fully assess the resource allocation before and after implementation.

Change and Transformation

The implementation of the Business Operations Centers involves changes in organizational structure, business processes, roles, job duties, technology and people. A comprehensive and structured approach to change management is critical to success. The implementation process must manage the human side of this transformation by preparing employees and customers for the change and engaging them in helping to achieve it.

The three workforces (campus unit, central office and BOC) need equal attention and support to be transformed. They are in a symbiotic relationship so the change in one affects the others. The business processes need to be reengineered, but so does the management and administration of each college and division. It’s not enough to just fix the existing business processes. The implementation of the shared service center concept in higher education has been less than smooth when not enough consideration was paid to the people remaining in the campus units and the central offices. We will need to challenge ourselves to keep the transition of all three workforces in the forefront of the effort.


  1. Multiple All-in-One Centers– I recommend the creation of no more than seven regionally distributed all-in-one Business Operations Centers to support finance and human resources transactions. Customer service should be tailored to the unique needs of each college, division and department being served. To the extent feasible, the Business Operations Centers will have final approval authority for transactional activities.

    The suggested BOC groupings [PDF | MSWORD] included in the Steering Team report are an appropriate place to start implementation discussions. Strategic realignment continues to reshape the institution and those changes must be reflected in how units are grouped in the Business Operations Centers. For example, the process will need to modify the Steering Team’s recommended grouping to account for the new College of Sciences and the reorganization of the Division of Student Affairs and the Division of Undergraduate Academic Programs. I would also ask the implementation team to reconsider cases where an organization is split into more than one center, for example the Division of Student Affairs. The experience of other campuses has indicated that dividing a campus unit into more than one center creates unnecessary confusion for the unit.

    Some select services may be better provided by Specialty Service Centers that serve the entire campus with enhanced services in specialized functions. Examples of Specialty Service Centers at other universities include travel, hiring, purchasing and onboarding centers for processing new hires. I intend to ask the implementation team to establish a Business Operations Onboarding Center that serves the entire campus as soon as possible. I further recommend other Specialty Service Centers be considered, as appropriate, that present real service opportunity to the campus.

  2. Staffing Method– NC State’s employees are the most important resource of the university and this realignment of business operations gives us an opportunity to make the most of people’s skills and talents. Some will be reassigned to the BOCs but many skilled and dedicated employees will remain to support their current campus units. During this transition, I will charge the implementation team to pay special attention to the human side of change and to give careful consideration to the current staff. A new sense of community must be developed across all of the transformed workforces.

    I recommend that the centers be staffed using a combination of an internal competitive search process for management positions and a “match and shift” strategy for staff positions. I recommend that positions and people be realigned into Business Operations Centers as determined by the respective college/division transition team and University Business Operations. The implementation team must consider each affected employee as an individual and consider each staff member’s skills, experience, career goals and interests when developing each transition plan. Any vacancies not filled by current NC State staff, should then be openly advertised.Administrative cost reductions are an important goal of this business operations realignment effort. I support the Steering Team’s recommendation that, to the extent possible, we look to efficiencies and normal attrition to reduce cost over the initial years of operation.

  3. Service Quality and Accountability – Quality service and customer satisfaction are the highest priorities. I recommend that each college/division unit be assigned a Business Service Liaison within their BOC to serve as the main point of contact between the center and the college/division customers. The Liaisons will ensure that Business Operations Centers provide their customers with the highest level of personal customer service. The Liaison along with a group of cross-functional experts assigned to each college/division, form a Customer Service Teamto facilitate communication between multiple people involved in individual transactions. It is clear that having a personal relationship with the customer and understanding their unique needs is critical to the success of the BOCs. These Customer Service Teams will be charged with understanding the unique needs of their customers, and providing them the most efficient and effective business processes.

    To further accountability, I recommend that University Business Operations systematically collect customer satisfaction and performance data on an ongoing basis, and use that feedback for continuous improvements. In addition, University Business Operations should continue to utilize Value Stream Mapping/LEAN Process Reviews and other effective process improvement tools to streamline all the business processes being realigned into the Business Operations Centers. Information systems should be built around a “best practices” approach to processing business transactions and automating workflow.

    I recommend an organizational design that includes numerous opportunities for the customers to influence the people who are providing them services. The design should include a Service Advisory Board for University Business Operations as a whole, and a Customer Advisory Panel for each Business Operations Center. These boards should be established to provide feedback, input, advice, and recommendations for improvement. Each Advisory Board will help select and evaluate their Business Service Liaison(s) with University Business Operations.

  4. Organizational Structure – Gaining efficiencies and lowering costs, although not the driving force behind the BOCs is still very important. I recommend that the new University Business Operations Division and the BOCs have an organizational structure [PDF] that is as flat as possible. A flat organization has fewer levels of middle management, and each manager has a wider span of control. A flat organization is also more flexible and responsive to complex and changing environments, and better able to respond to customer needs. It also enables there to be a high level of quality control across all centers. This organizational structure as shown in the attachment will enable us to avoid creating seven new high-level Center Director positions. A new group of high-level administrative positions runs counter to the BOC promise.

  5. Service Level Expectations– I recommend that University Business Operations work with each college and division to develop Service Level Expectations that will describe the specific services to be provided and the manner of delivery. Service Level Expectations will establish a mutual understanding and will include the roles and responsibilities of the Business Operations Centers, the units and the central offices. Service Level Expectations will also include clear methods of requesting services, expectations of customers making requests, how services will be measured, reported, and reviewed, and protocols for special circumstances. All performance data will be transparent and provided to the customers at least annually.

  6. Communication – I recommend that the Implementation Team be responsible for frequent communication with the campus and its various stakeholders. Regular updates will be made to various standing organizations, such as the Dean’s Council, Executive Officers, Department Heads Group, Faculty Senate, Staff Senate, Lead Business Officer Group, Business Connections and HR Connections. This implementation effort will have a dedicated web presence with frequent updates. There will also be periodic forums to allow broad cross-sections of the campus to come together on this critical initiative.

  7. Employee Careers – One of the benefits to employees of the Business Operations Centers is that there will be more opportunities for them. I will challenge the Implementation Team to create a system that provides career paths, sideways and diagonal opportunities and even rotational programs. I recommend that central Human Resources and Financial Offices work with University Business Operations to make sure that employees receive all the training they need to do their new and redesigned jobs well. Training should include functional subject matter, customer service, team skills, continuous improvement and other professional development training as well.

  8. Use of Technology – Having the appropriate technologies in place to support the streamlined business processes will be key to the success of the Business Operations Centers. Campus departments and colleges must be able to easily and quickly communicate to the Business Operations staff the information necessary to initiate and process financial and HR transactions. Campus departments and colleges must also have visibility into the progression of those transactions as they move through the centers. Specific examples of new functionality needed include: intuitive forms that allow end customers to easily initiate transactions; the ability to easily attach supporting documentation (receipts, quotes, spreadsheets, etc.) to forms/transactions; the ability to provide all approvals electronically (no more signed hard copies) and easily track those approvals; and easy-to-understand, easy-to-generate, flexible reports. Having both the functional and technical resources available to develop and support these new technologies and capabilities will be critical. I ask that OIT and Enterprise Application Services continue to give priority to the BOC technology development, as it will affect the whole campus.

  9. Physical Locations – Initially, some Business Operations staff may continue to carry out their duties in the customer units they are now serving. After the college/division’s internal transition phase is completed, and as space is made available on campus, I strongly recommend that each Business Operations Center and Specialty Center be consolidated into a single location that will facilitate service.

  10. BOC – Campus Unit – Central Office Coordination – I recommend that the BOCs act as the coordinating point between assigned units and the university’s central offices in specified matters of financial and human resource processes and procedures, remaining current in these areas to both perform the related service functions, and to effectively advise and inform them in their application.

Participatory Transformation

Each Business Operations Center will have unique requirements. Moving toward implementation, the design of Business Operations Centers must advance from the Steering Team’s conceptual framework to a more detailed design for each individual BOC. Successful implementation will require a clearly defined process and will involve extensive consultation and collaboration between all stakeholders.

I recommend the formation of the following temporary teams to carry out this process:

  1. Implementation Team– A Business Operations Center Implementation Team, led by the Executive Director of University Business Operations that include representatives from a few key stakeholder groups, will be charged with overseeing the transition and the overall planning, design and implementation of BOCs. This Team will also develop and manage a phased implementation schedule that is as aggressive as possible in order to achieve the desired benefits in a timely fashion. I will maintain responsibility for the oversight and final approval for all components of the transition and implementation of Business Operations Centers. I am recommending the following individuals:

    Scott R. Inkley, Jr., Exec. Dir. of University Business Operations, F&B, Chair

    • Julie Brasfield, Director of Contracts and Grants, F&B
    • Gwen Hazlehurst, Director, Enterprise Application Services, OIT
    • Jim Klingler, Facilities Budget Director, F&B
    • Rick Liston, Assistant Dean, Office of Research and Innovation, ORIED
    • Sharon Loosman, Director of Materials Management, F&B
    • Don Patty, Assistant Dean for Finance and Business, CNR
    • Connie Reno, Assistant Dean for Personnel and Administration, COE
    • Deborah Wright, Director of Classification and Compensation, HR
  2. Project Teams – Two Project Teams, one for human resources and one for finance, will establish and oversee the work of various Process Improvement Teams, who will analyze finance and human resources business operations, make recommendations about center staffing, and conduct campus-wide business process improvement reviews. The Teams will develop action plans to accomplish recommended process improvements. The Teams will sequence the move of colleges, divisions, and departments to the BOCs; reallocating functions, positions, and personnel to the BOCs; and execute the plans and track implementation progress with appropriate metrics.

  3. Process Improvement Teams – Each major process/transaction that will be realigned into the BOCs will be analyzed by a Process Improvement Team. These teams, made up of content experts from across the campus will be charged with developing the most efficient and effective processes and workflows that they can for all three workforces.

  4. Transition Teams– For every Business Operation Center, a Transition Team will be formed. Each team will be comprised of customers from the colleges and divisions to be served by that BOC as well as staff from University Business Operations. Each Transition Team would address the FTE conversion process, the final determination and selection of jobs to be realigned into the BOCs, and the details of the transition for their college/division.

    Schedule – I recommend the following schedule for implementing the Business Operations Centers:

    • Appoint the Implementation Team by June 15, 2012
    • Establish the Onboarding Specialty Center by January 1, 2013
    • Develop a plan for two Business Operations Centers, one serving academic units and one serving administrative units by January 1, 2013
    • Establish two fully functioning Business Operations Centers by July 2013, one serving academic units and one serving administrative units
    • Establish the remaining Business Operations Centers, as well as any appropriate Specialty Service Centers by July 2014

Going Forward

The implementation of shared services here at NC State affords the campus a significant opportunity to design an organization that will be able to provide high-quality business support to the campus well into the future. At a time when many public and private organizations are reacting to shifting external pressures, the Business Operation Centers will provide an opportunity to proactively support the mission of the campus.

The implementation of Business Operations Centers now, with a strong emphasis on customer service, is preferable to the continued erosion of administrative and business staff and capacity at the college and division level. The mission of University Business Operations will be to provide the highest quality business support services at the lowest cost for the whole campus.

I present these recommendations to you with commitment and confidence that they will move administrative processes forward in both the service and cost effectiveness required. Executive Director of Business Operations, Scott Inkley, and I are fully committed to keeping the campus engaged in this implementation as we move forward. I would be pleased to discuss these recommendations with you, and also invite you to visit the new University Business Operations website at for more detailed information. Again, I would like to thank the members of the Business Operations Realignment Steering Team for their hard work and thoughtful recommendations.