Shared Services in the USA

It’s probably not quite what they were hoping for.

Inside Higher Ed reports on a bold plan at the University of Michigan to address shared services within the institution. The idea must have seemed such a good one at the time – centralise large parts of departmental administration into a single place in order to improve productivity and save money ($17m was the planned saving). The approach, described rather unfortunately as “lift and shift” seems to have run into a few problems though:

For one thing, department chairs were kept in the dark about the effort and then given what faculty members have described as “gag orders” to prevent them from talking about it. Now professors and graduate students are speaking out publicly, and it’s clear they are unhappy about losing staff members with familiar faces from down the hall to an off-campus facility.

For another, the plan is no longer expected to save nearly as much as once hoped: just $2 million or $3 million in its first year and $5 to $6 million per year in the near term, according to a university spokesman.

University of Michigan August 2013 210 (Weill Hall)

They probably didn’t move to this building

That savings doesn’t factor in $1 million a year the university will pay to lease a new building to house the staff in one place. Or the $4 million the university expects to spend fixing up that building. Or the $11.7 million contract Michigan has with the consultant Accenture for advice about how to save money. All told, an effort to save money might barely break even in the short term, though officials expect savings to ramp up in the long term.Michigan is just the latest campus to turn to “shared services,” a cost-saving approach being tried at an increasing number of colleges across the country, including the University of California at Berkeley, the University of Kansas, the University of Texas at Austin and Yale University.

The idea is simple. Instead of each academic department having its own staff to handle bookkeeping, departments should rely on a pool of staffers. The theory is each of the employees in the pool could specialize in quickly dealing with certain paperwork instead of trying to be jacks-of-all-trades in departments across campus. One staff member would get really good at travel reimbursements, for instance, while another focuses on payroll.

So, all a bit messy. Whilst such shared service developments can work it does rather seem as the consequences of this kind of big bang approach might not have been fully anticipated in this case. It will be interesting to see if the promised savings do materialise. And whether the departments get the right level of service too.

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The Imperfect University: The Cult of Efficiency

The cult of efficiency

I’ve recently been reminded about a great book recommended to me by my former supervisor, Nigel Norris. Half a century since its publication it remains a fascinating read and sits midpoint between two eras of educational change which, perhaps surprisingly, seem to have a lot in common. (Note that a large part of what follows is taken from my book Dangerous Medicine: Problems with quality and standards in UK higher education which is available for Kindle via Amazon at what I’m sure we’d all agree is a very competitive price.)

Callahan’s book, Education and the Cult of Efficiency, published in 1962 offers a salutary warning about the hazards of imposing inappropriate models in education. When I first looked at this I was interested in the ways in which industrial quality assurance frameworks seemed to be enthusiastically adopted by some in higher education with little regard for context, with one of the main drivers for the application of industrial models to HE being the belief that efficiency and economy will result.

The economic imperative is one which has been vested in higher education with ever greater force since the early 1970s but has forerunners in other spheres too. Callahan’s detailed and in many ways prescient study, shows the effect of scientific management, Taylorism, on US schools in the early part of the last century, the effects of which were felt in the American education system until the 1960s.[i] The essence of the problems this approach caused are articulated as the promotion of cost accounting over educational value and these ideas permeated the whole education system including the universities. The notion developed of schools as ‘service stations’ which represented the ‘natural outgrowth of years of business influence’ and the idea ‘that the public should provide the specifications for the educational ‘products’ which were turned out by the schools’.[ii] These concepts provide interesting parallels with the educational landscape in the UK today.

The primacy of the world of business was as real in the US of the second decade of the last century as it is in the UK today with ‘the community’ and ‘the business community’ being seen by many school administrators at that time as synonymous. Students were expected to undertake service for their communities (which often meant cheap labour for local employers) and there was a strong emphasis on the importance of student thrift. The response by school administrators, in the face of a critical public which was concerned with economy in public spending, was to turn educators into technicians producing products to specifications.

Administrators therefore embraced economy measures and accepted increased class sizes based on ‘evidence’ that large classes did not diminish performance, a situation which remained in US schools until the 60s. One of the side-effects of this economy drive was a disproportionate focus on the trivial and measurable, a development supported by the training given to school administrators in graduate schools of education. This resulted in work which focused on measuring, for example, toilet paper use, ink consumption and heating savings.[iii] As late as 1938 a text on the principles of school administration included specific instructions on how a janitor should dust desks. Callahan cites Flexner who shows that the emphasis on service, selling education, mass production and measurement of trivia was equally widespread in US higher education at this time.[iv]

Overall, Callahan characterises the impact of scientific management as tragic with education ‘adopting values and practices indiscriminately and applying them with little or no consideration of educational values or purposes’. The wholesale adoption of basic business values and techniques represented a serious mistake in education and in the period from 1910-1929, when efficiency was demanded, what was actually meant was lower costs with no reference to the quality of the ‘product’. At this time the public was suspicious of public institutions and in awe of the world of business (before the stock market crash) and saw scientific management as an appropriate solution. Administrators were, in this context, entirely complicit with this misapplication of business processes and values. The impact of this period was widespread and enduring (despite the depression), as those trained during this period went on to hold positions of power for many years, and the ideas remained dominant into the 1960s with an emphasis on business and technical values at the expense of the educational. Similar societal factors can be seen in the UK in the 1980s onwards which perhaps helps to explain the potency of industrial ideas in education in this country too.

Looking forward, it is possible to envisage a (not very attractive) future in which most of our schools are ‘free’ and, in the absence of any other direction, turn to inappropriate models and measurements and follow a 21st Century version of Taylorism in order to deliver ‘products’ which it is believed the country needs. Whether or not such a scenario comes to pass it is to be hoped that a similar cult of efficiency will not take hold in higher education.


[i] Callahan, R E (1962), Education and the Cult of Efficiency, Chicago: University of Chicago Press.

[ii] ibid, p227.

[iii] ibid, pp242-3.

[iv] ibid, p243, referring to Flexner, A (1930), Universities America, English, German, New York.