Archive for Tuesday, April 26, 2011

KU hires consulting firm to help campuses spend less

April 26, 2011, 3:08 p.m. Updated April 26, 2011, 3:17 p.m.

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Kansas University will work with a consulting group to review its administrative practices and identify cost savings.

The contract with Huron Consulting Group is for up to $2.28 million if all its initiatives are implemented.

It will be paid for with private funds.

The contract also provides for additional rates to pursue more initiatives if KU desires.

Huron, which is based in Chicago, will have teams working with advisory committees on the Lawrence campus and at KU Medical Center.

Using savings from the process, KU officials say they hope to be able to invest in new priorities outlined in an ongoing strategic planning effort.

Huron expects to take about four months to identify options that would improve efficiencies. Implementation of the new initiatives could be in place by this summer.

Comments

KEITHMILES05 4 years, 3 months ago

How ridiculous! Hundreds and hundres of the most intelligent people in the state are TOO dumb to save money. Yes, the irony is pitiful!

Bob Forer 4 years, 3 months ago

Just what I thought. You beat me to it.

fabian_zimbabwe 4 years, 3 months ago

Didn't KU also fork over at least $100K for someone to suggest a trajan font for the "new" KU logo?

Bob_Loblaw 4 years, 3 months ago

Businesses do this with outside firms all the time.....KU is just a business....it's selling a service. Having a PhD in the theory of business does not mean you have any practical experience or can see the forest for the trees.

Thunderdome 4 years, 3 months ago

Not successful businesses, Bob. In most companies, if you aren't efficient, you are gone and they hire another manager, not a consultant. It's official...KU is now Initech and they have hired "the Bobs" to make them more efficient.

Bob_Loblaw 4 years, 3 months ago

"Not successful businesses...."

You just answered yourself. Efficiency doesn't magically happen with just replacing any single person or persons.

Thunderdome 4 years, 3 months ago

I understand your point...but we are paying these people far too much to need this much outside help.

Sigmund 4 years, 3 months ago

Kuku_Kansas (anonymous) says… "Oh, the irony..."

Beat me to it!

Here is an idea, dump the consultants and cut EVERY department and school's budget by 7%. Let the Deans and department heads decide where money would be best saved and hold them responsible for their decisions.

MyName 4 years, 3 months ago

Yes, because clearly every department deserves to be cut by an equal amount including the ones that continue to bring in more grant money or to attract more students. Or maybe you should let the administration actually administer...

Sigmund 4 years, 3 months ago

Bob_Loblaw (anonymous) says… "Businesses do this with outside firms all the time"

Really? Name one. I've worked for Fortune 100 companies and small family businesses of 20 or fewer. Not once did they ever hire a consulting firm to tell them where to trim the budget. That is what management does.

Bob_Loblaw 4 years, 3 months ago

Wow....really.....that's interesting considering economic and financial consulting are key services for most consulting firms (often under the guise of restructuring or another such moniker): McKinsey & Company The Boston Consulting Group, Inc. PricewaterhouseCoopers International Ltd. Ernst & Young Deloitte Bain & Company Accenture Booz & Company

the list does go on.....

guesswho 4 years, 3 months ago

They did not say to trim the budget. They said to 'review its administrative practices and identify cost savings'. Do you want an insider to review administrative practices?

Consultants can be overpaid, but they also bring an outsider's perspective and also best practices from other Universities.

b22 4 years, 3 months ago

I call BS on Sigmund's comment, In fact I cant name ONE fortune 100 company that hasn't hired a consulting firm (and I worked for several fortune 50 firms). RESEARCH before you post incorrect information on this board. Oh and name one, hmmm how about 5, Exxon, Walmart, Bank of America, AT&T, HP..the list goes on. Please if your going to speak misinformation at least preface it with "I think this is true, but I am misinformed"

kuprof54 4 years, 3 months ago

Any business I've worked at, this is the responsibility of the business execs, i.e. Vitter and BGL. What do these people do? Hire a PR person (BGL's job) and now a consulting firm (Vitter's job) to tell them how to run the business of KU? Isn't that Vitter and BGL's job?

Bob_Loblaw 4 years, 3 months ago

There's the problem......they have never run a business. You can't make academics into successful Business Managers by just saying that's what they are. Maybe this is a sign that they realize that they are over their collective heads now.

kuprof54 4 years, 3 months ago

I completely agree. I know they're in over their heads - and so do the regents and alumni. In academia, if you're a good researcher and you stick around long enough, eventually you'll get to run something. For a bunch of people who are supposedly so intelligent, academics haven't figured out that business management could run KU much better than a career academic who knows nothing about HR, finance, strategy, etc. It's just shocking that we pay people like Vitter and BGL tons of money to hire someone to do their jobs.

MyName 4 years, 3 months ago

Here's the other problem: academic institutions don't work like most other businesses. You're not solely responsible for an employees pay (many researchers have income directly or indirectly from grants), there are whole classes of employees that you can't fire at will, there are whole streams of revenue that you can't manage directly as they often have strings attached, and you also have whole classes of people who are "customers" part of the day and "employees" another part.

The consultant, IMO, is about finding a compromise list of cuts that will try and show people in Topeka that they aren't just a blackhole for the third of the KU budget that comes from the State than anything else.

kuprof54 4 years, 3 months ago

@ MyName: The same constraints exist in the business world regarding strings attached to money, employees you can't get rid of, and money that's managed by others. I"m not directing this at you, but I'm tired of the excuse that academia is different and unique. It's false and a crutch used by those who are unable to do their jobs. Every business is unique and a good manager figures out how to work thru those challenges.

PugnaciousJayhawk 4 years, 3 months ago

Took Vitter long enough to find the funds. He's been pitching this idea of hiring a consultant to KU's big donors almost since he got here. All the ones that I know who turned him down on his request all were thinking along kuprof54's point in that individuals like Vitter and BGL shouldn't need to hire consultants to look around and figure out what to cut.

It's almost disgusting how poor the leadership is at KU.

kuprof54 4 years, 3 months ago

I guess we'll see how good Huron is. If they're halfway intelligent, they will recommend new leadership.

MyName 4 years, 3 months ago

Can you give one example of the "disgustingly poor" leadership? They haven't done much good or bad as yet, which is typical of outsiders who are trying to figure out how a big bureaucracy runs, but they haven't done anything grossly incompetent either.

Most of the big media stuff has revolved around the Athletic Dept.

PugnaciousJayhawk 4 years, 3 months ago

Name one thing BGL has accomplished in 2 years or Vitter in a year that will have a lasting impact on KU. I'm guessing you'd have trouble making a list of any substance. True leaders get out there and lead, they don't hide behind an army of consultants, committees and mid-level administrators.

Sigmund 4 years, 3 months ago

Bob_Loblaw (anonymous) replies… "Wow....really.....that's interesting considering economic and financial consulting are key services for most consulting firms (often under the guise of restructuring or another such moniker):"

I have never heard of one of the fine firms listed setting a companies budget, unless they were bankrupt and ordered by a court. Setting budgets is on of the reason management is paid. Maybe we should just fire KU administration and hire the consultants.

Bob_Loblaw 4 years, 3 months ago

"Maybe we should just fire KU administration and hire the consultants...."

Well actually having people with business experience would be nice, but I wouldn't go that far. As far as Huron "setting the budget"...that is not the same as "improve efficiencies". On a local note....I do believe Sprint brought in an axeman more than several years ago to do the same thing.....it meant cutting the middle-management fat in that scenario.

devobrun 4 years, 3 months ago

How do you save money? Fire people. Oh OK, let them go. Allow attrition to diminish the work force.
However it is done, KU saves money by paying fewer people less money. The consulting firm tells KU who to allow to go away, from where will they go away, and who will pick up the extra work.

It's H.R. time at KU.

Thunderdome 4 years, 3 months ago

You are over-simplifying this construct and I wouldn't trust KUHR to take out my trash, let alone make informed personnel decisions. The model for choosing administrators is broken, there are too many of them, and they are paid far more than they are worth.

devobrun 4 years, 3 months ago

The more I thought about it, the more I came to a conclusion that KU is hiring the consultant to buffer themselves from lawsuits. The consultant is hired to advise KU regarding firing people. If they do their job well, then fired people draw the least unemployment and sue for less. If the consultant doesn't do the job well, then the blame goes to them and KU's liability is diminished. Either way, somebody sat down and figured the cost/benefit of hiring a middle man to do the firing and came up with a dollar amount that KU was willing to fork over to protect themselves. My guess is that the contract includes a clause of liability on the part of the consultant above some level for employee termination costs.

The consultant will, of course, be ruthless in defending themselves against unemployment and wrongful termination lawsuits. KU keeps its good name, the consultant is the bad guy, but they don't care. So this is protection from the shakedown (extortion) that comes from releasing employees.

nschwerm 4 years, 3 months ago

well you know what they say, you gotta spend money to save money... Oh wait I don't think thats how it goes.

Sigmund 4 years, 3 months ago

Bob_Loblaw (anonymous) replies… "On a local note....I do believe Sprint brought in an axeman more than several years ago to do the same thing.....it meant cutting the middle-management fat in that scenario."

Not exactly. After Esery screwed the pooch with the Nextel "Merger of Equals," the BOD (Board of Directors) hired a new CEO (Dan Hesse) who brought in Steve Elfman (currently head of Network Operations) as a full time member of the management team. It was the upper management team that ended up slicing deeply into the middle management team, and properly so, not outside consultants.

But I am not so sure Kansas University needs to eliminate positions where they can, like administration, as opposed to tenured professors and faculty, which they are very restricted on doing. It is my understanding that overall there are huge saving to be made in the capital budget. Cutting that by 7% may keep the departments and schools from letting people go.

The major problem with KU, financially, is that they spent a huge amount of money for both capital and personnel to become a "research institution" which was meant to bring in lots of government grant money. That simply did not pan out and is unlikely to do in the near future. In the mean time they wasted their long time reputation as a "teaching institution." As a result they now are viewed as neither.

Bob_Loblaw 4 years, 3 months ago

Nope.......This was before Nextel was even on the horizon. Larger bald dude....people called him the "axeman" even. I just don't remember his name. I was actually there, but way to young to be management. This was perhaps 2000-2003 or so.....when ION and E-Solutions were the rage.

Sigmund 4 years, 3 months ago

MyName (anonymous) replies… "Yes, because clearly every department deserves to be cut by an equal amount including the ones that continue to bring in more grant money or to attract more students."

It is exactly the wealthy more productive departments need to sacrifice MORE not less than the less fortunate departments! Or haven't you heard the current mantras of "social justice," "soak the rich," and "from each according to their ability, to each according to their need?" I assume that since this comes from the intellectual elite in our Universities, they will be willing to show the rest of society just how well that would work at the Universities.

Or you could simply ask each department to contribute equally in the burden.

verity 4 years, 3 months ago

That's already been done. Budgets have already been cut at the department level, giving the department chairman the job of figuring out the cuts.

And "It is exactly the wealthy more productive departments need to sacrifice MORE not less than the less fortunate departments!"---I hope you're being sarcastic. You're trying to compare two unlikes and the analogy does not work.

verity 4 years, 3 months ago

Here's an idea. Talk to the people who actually do the work and know what's going on. It's the people in the trenches every day who can tell you where you can save money and be more efficient. But rarely do they ever get asked or listened to when they try to say something.

My experience with outside "efficiency" teams coming in is that they don't know what the %^&* is going on and they come up with stuff that is completely counter productive, and since they have to earn their pay, they tell the company/organization to get rid of people.

By the way, KU may not be able to fire people without cause, but they can lay people off and do so. Also, if you are unclassified, they can just not renew your contract. That's with staff, I don't know how it works with professors.

Laying off or otherwise getting rid of people doesn't necessarily make for more efficiency.

Sigmund 4 years, 3 months ago

verity (anonymous) replies ... "That's already been done. Budgets have already been cut at the department level, giving the department chairman the job of figuring out the cuts."

Well practice makes perfect. Do it again, and again, and again until they make budget. It is what every other segment, other than government, does every day of the year and it isn't that hard.

verity (anonymous) replies ... "And "It is exactly the wealthy more productive departments need to sacrifice MORE not less than the less fortunate departments!"---I hope you're being sarcastic. You're trying to compare two unlikes and the analogy does not work."

Being more ironical that satirical. Don't you find it funny that the Academic world that has no problem telling every one else how to run their lives, businesses, and country, can't manage to balance a budget, something almost everyone of us do every single day?

Lately we are told by many in academics that those groups who have benefited most in society owe a greater percentage of their income to support those groups that have less. So why not apply that concept to the University? Those departments that have done best under past administrations need to contribute a higher percentage of their budgets to those departments who haven't done as well. Do you see a problem with asking them to practice what they preach? Why???

verity 4 years, 3 months ago

You ignored the things I said which don't fit into your scenario. Your analogy, like most analogies, doesn't work. You are talking about unlike things.

"It isn't that hard." That is so astoundingly off-base.

But you have your mind made up and there is no use discussing this with you.

I still say---talk to the people who actually do the work. They can tell you how to make things more efficient, not some outside company who gets paid if they can cut your budget, so they do the easiest thing and cut out departments and lay off people.

Like I said---Laying off or otherwise getting rid of people doesn't necessarily make for more efficiency. In fact, it may be counter productive.

woodscolt 4 years, 3 months ago

For .28 mill I could have advised them on how to save 2 million. Probably a better percentage than the 2.28 will get them.

Ah, we should all just be a "consulting firm". Maybe KU could go on a "fact finding mission" next.

Austin Bergstrom 4 years, 3 months ago

the old joke on the hill: how many F&O(Facility and Operations) workers does it take to change a light bulb? 7...1 to hold the light bulb and 6 to rotate the ladder! Sorry couldn't resist!

Sigmund 4 years, 3 months ago

My understanding that every single department and school manages their own networks which costs a ton of money. That if they turned all that over, including that part of their budgets, to a "University Networking" and consolidated their efforts, the University as a whole could do a lot more with a lot less. But no department is willing to do that because everyone reducing their budgets for the good of the University dilutes the power and prestige within their little fiefdoms.

verity 4 years, 3 months ago

If I understand what you mean by networks, then you have no idea what you are talking about.

Bob_Loblaw 4 years, 3 months ago

I know firsthand that your "understanding" is 100% totally false.

dcantrell 4 years, 3 months ago

I'll tell you what students think. They think its a sham. And when I asked questions last year about my tuition, I was pushed aside and told I had no right or valid concern. I started asking questions that started with the director of my program on up the the provost. At no point did any of them show true concern. They just talk in circles and avoid difficult questions. Eventually they granted a "review" of the funds and if you've read it and know anything about accounting, you'd recognize that it was also a sham. It was the same firm that did the athletics "review."

KU and its administrators don't care. They don't know what they're doing and they have forgotten that students are the reason for the university. Students have given very valid and honest feedback supported by facts and KU only brushes them aside. They don't explore why students have the opinions that they do, nor do they try to diagnose and intervene to solve the problems.

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