Huron Presents Revenue, Efficiency Opportunities to ASU Board of Trustees
BEEBE, Ark. – Huron Consulting Group today outlined a series of recommendations to the Arkansas State University System that would increase revenue, cut costs and improve efficiencies.
A summary of the Accelerate ASU study findings was presented to members of the ASU Board of Trustees at its meeting on the ASU-Beebe campus.
Andrew Laws, managing director with Huron, said about one-third of the recommendations are revenue opportunities and two-thirds are efficiencies and savings.
“Today is Huron’s perspective and not things the Steering Committee or leadership team has said you should do,” Laws said. “We want to share ideas and challenge the team to think differently. On the academic side, we approach it different. We’ve tried to help the system and campus identify the right way to have conversations and use the data.”
Dr. Charles L. Welch, ASU System president, acknowledged “lots of discussion about purpose, intent and goals of this study.
“It’s important that everyone understand what this is,” he said. “It’s a study to help us know where to do further analysis and understand where challenges and opportunities are. We have areas exceeding peers or behind peers. We will work collaboratively to chart a future path. What you see today is just the beginning. We will go to work on our campuses to put it to work.
“This is not a study to reduce personnel or benefits to save money. Huron noted we are a rather lean organization. A lot of work is yet to be done on this study. Today is a summary of a framework. They have built amazing cost accounting systems that will enable us to dig deep into analysis of our operations over and over again. We have to utilize the system and data to learn even more.”
Welch said implementation of various opportunities outlined in the study will be key.
“Our campuses are engaged and excited about this,” he said. “Huron found a significant amount of buy-in, and they don’t always see that.”
Welch addressed criticism about the $1 million investment in the study. He said the expenditure equates to 0.33 percent of the total system budget and that it was paid for from two sources: savings accrued by the ASU System office during the past 5-6 years, and discretionary funds from Gov. Asa Hutchinson. Campuses will benefit financially from the study for many years to come, he added.
Board Chairman Tim Langford of Little Rock said he was impressed with the complexity and depth of the data.
“The Board of Trustees directed this initiative,” he added. “We have mounting economic pressures. We wanted to be proactive and challenge the status quo to increase efficiencies. We expect Dr. Welch to be forceful change leader and wanted to establish more of a data-driven and analytic mindset. Going forward, we’re committed to shared governance. We’ll study the findings, work collaboratively and develop action plans.”
Laws presented a summary of Huron’s findings and said the system could be a stronger asset with coordination of large procurement contracts, information technology and articulation agreements.
Huron outlined various administrative business cases in its summary that would produce $10.6 million to $20.1 million in positive financial impact. The areas include:
- Enrollment management: increase full-time enrollment to previous levels, increase first-year retention rates and develop a discounting strategy to award aid more effectively.
- Procurement: initiate strategic systemwide sourcing and management efforts for cost savings.
- Development: improve alumni engagement efforts relative to peer institutions, particularly among younger demographics.
- Organizational redesign: realign staffing to reduce the large number of supervisors who have only one or two direct reports.
- Human resources: update benefits policies in areas such as retirement and health plans.
- Information technology: evaluate the service delivery model for IT across the system and centralize commodity services such as networking, application support and security.
- Outsourcing strategy: perform comprehensive evaluation of current outsourced operations such as dining and bookstores.
- Facilities operations: reorganization and changes in processes.
In its academics review, Huron identified opportunities that include developing a stronger collaboration among the system office and campuses for strategic academic activities and information management, as well as identifying opportunities to align academic resources. The study noted the need to remove administrative obstacles for transfer students.
Laws said the findings were “not designed to beat up on any leadership team” and he noted the system and its campuses have strong leaders and operations.
“The story is it’s an incredibly difficult market for higher education,” Laws said. “The system has taken some hits and is weathering the storm quite well. You have many things to be proud of. It’s a very lean organization. We thought we would find 25-30 percent more opportunity.”
Among action items, the Board approved:
- A modified lease agreement with Jonesboro Hotel Partners LLC, which is building an Embassy Suites and 40,000-square-foot convention center on the Jonesboro campus. The revision clarifies the timeline for payments to Arkansas State, but it does not impact the amount of revenue to be paid.
- The designation of Trustee Emeritus to Ron Rhodes of Cherokee Village, who served on the board for 10 years and was chairman of the board twice.
- Approved a new long-range plan at ASU-Mountain Home.
- Approved campus regulations governing operation and parking of motor vehicles.