Money over Minds: What Business Productivity Means for the University of Texas

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Over the past few years, the University of Texas has seen its budget slashed time and time again, forcing the school to come up with new ways to save money and stay afloat. In response to budget cuts, UT President Bill Powers announced in early 2013 that the school would begin a massive overhaul of its business operations to improve efficiency, known as the Business Productivity Initiative.

The plan is based on the results of a study conducted by 13 business leaders in April 2012. The Committee on Business Productivity, with help from consulting firm Accenture, released a report titled “Smarter Systems for a Greater UT,” with a series of recommendations that they claim will save the university $490 million over the next decade.

The cost-saving recommendations come from 3 areas: “Administrative Services Transformation”, “Technology Commercialization”, and “Asset Utilization.” Asset utilization includes recommendations such as “bringing UT's food, housing, and parking rates more in line with market values,  and taking advantage of outsourcing or privatization opportunities”–in other words, raising prices for food, housing, and parking, and laying off University employees in favor of third-party contractors who will work for less pay. raising prices and cutting staff which hurts students, The Technology Commercialization recommendations include “matching university strengths to industry needs,” which essentially involves funding departments based on their profitability. Currently, UT's most profitable departments are “electrical and computer engineering, biomedical engineering, chemical engineering, computer science, and petroleum and geosystems engineering,” and other non-science or engineering departments would see their funding cut under this plan. Finally, Administrative Services Transformation involves consolidating and/or automating various administrative positions throughout the University, which would result in even more downsizing.

The lack of state funding for UT means that the school has been forced to turn to proposals that shift a public institution of higher learning to run like a business, hurting students, staff, and faculty in the process.

Read more about the effects of business productivity after the jump. The original Business Productivity plan was released in January. In October, more information about the Administrative Services Transformation came out, detailing the so-called “Shared Services Plan,” that could start to be implemented as early as spring 2014. It detailed some of the proposed layoffs and dubious privatization methods, and it sparked outrage from many people on campus.

The Texas State Employees Union, which represents 20% of the UT staff, obtained the Shared Services report in early October, and its contents were later confirmed by the university. The plan obtained by TSEU stated that there would be 500 layoffs “in the areas of information technology, finance, and human resources,” which represents a 20% overall reduction of those departments. TSEU also told KVUE that “the plan also states that in order to 'streamline' the administrative functions at the University, they will need to spend between $160-$180 million. The plan is not clear on where this money would go, but what is clear is that the University plans to spend millions of taxpayer dollars in order to eliminate hundreds of university jobs.”

UT's CFO Kevin Hegarty claimed that the proposed layoffs would save $30 million dollars annually over the next decade, and that the $160 million would mostly go towards updating UT's web systems. He also cited Yale as an example of a  school where a shared services program has been a success. However, Yale's shared services plan has come under fire from professors who have seen their workloads continue to increase as administrative staff is slashed. “[Shared Services] was supposed to be streamlining and simplifying our lives, and what it's done is made it much more complicated,” said Benjamin Foster, a professor in Yale's Near Eastern Languages and Civilizations Department, told the Yale Daily News. “Everything takes about two times as long. We resent the down-skilling of departmental administrative personnel … We don't see how that can be more efficient or cheaper.”

TSEU and others have also expressed broader concerns with the way the “Smarter Systems…” report was produced. The Committee on Business Production was chaired by Steve Rohleder, a chief executive at Accenture, and included a total of 13 business executives. Accenture has a notably poor track record on its public projects in Texas. For example, when Accenture took on the redesign of the state's child services program in the 90s, it ended up taking 4 years longer than promised to complete and cost the state $50 million more than expected. When the new system was finally done, it was poorly designed and left families unable to receive payments for days at a time. The child services system was ultimately fixed by state employees three years later in 2000.

Accenture also botched its attempt to operate the state's food stamp program. The state granted it an $899 million contract to operate the food stamp eligibility program, but the system Accenture designed led to thousands of people being denied benefits that they were eligible for. Accenture received almost $1 million to consult on the Committee on Business Productivity's report.  Students have noted that the bidding process for this contract was not transparent, and Accenture has refused to release the research that led to the conclusions and recommendations in the “Smarter Systems…” report.

Students and faculty voiced their concerns over the proposed changes at UT at an event in November, which was sponored by the Texas State Employees Union and the Graduate Student Assembly. They hosted UT alum and social science professor Dr. Robert Ovetz, who wrote his dissertation on the corporatization of UT, and spoke about “how UT has engaged in 'planned austerity' to funnel money to corporations and force the university community to pay for it.” Community leaders were also involved in the event–Ovetz was introduced by State Rep. Elliott Naishtat.

Student and faculty activism was effective at changing privatization discussions at the University of Michigan. Michigan faculty organized across departments to voice concerns similar to those at UT in an open letter to the administration, where they “implore[d][the administration]to follow the judicious path” and not carry out a shared services plan. The administration responded by agreeing to postpone implementation of the shared services and to include faculty in the process of evaluating and modifying the current plan to better suit their needs.

The UT Business Productivity Initiative is the result of a university having to reconcile years of state underfunding. Instead of focusing on education, UT now has to focus on profitability to stay afloat. Putting the future of the University into the hands of a management consulting firm has yielded predictable results. Students, faculty, and staff are forced to pay the price for cost-cutting and profit maximization. A well-funded public university should make higher education affordable to a large portion of society, providing opportunities for advancement to those who may not have had access otherwise. It should be dedicated to the pursuit of knowledge, and when it's not, its reputation suffers. Our institutions of higher learning are suffering from our politicians' short-sighted budget cuts. Now we're starting to see the consequences, and it's time to stand up for public higher education before it's too late.


About Author

Katie Singh

Katie grew up in Austin and has been involved in Texas politics since 2004. She has been a part of several campaigns, from state house races to working at President Obama's campaign headquarters in 2012. She loves public policy, public health, and tacos. Katie tweets from @kasingh19.

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