Unlike peers, Yale cuts back on consultants

Cornell calls it “Reimagining Cornell.” The University of North Carolina, Chapel Hill is launching “Carolina Counts.” The University of California, Berkeley is touting its “Operational Excellence” initiative. And Yale has “YaleNext.”

Call them what they will, universities across the country are rolling out comprehensive overhauls of their business operations and internal systems. But while other schools, including Cornell, UNC and Berkeley, are paying millions for consulting firms such as Bain to help them find savings to recover budget deficits, Yale is sending home most of the consultants it hired from the international company Accenture. As the University reduces expenses to meet a $150 million budget gap, even the consultants helping to close that gap have found themselves the victims of a suffering economy.

“We cut them monstrously,” Anne Murray-Randolph, assistant vice president for strategic projects and communications, said. “The level of cuts that we need to accomplish are so deep that we just cannot make a case to hang onto the consultants.”

About 100 consultants came to campus beginning in November 2008, just before the financial crisis hit, to help plan and run YaleNext, the comprehensive overhaul of Yale’s business operations systems. Following a series of budget cuts that have scaled YaleNext’s cost back some 60 percent, only 10 to 15 Accenture consultants will remain in New Haven in 2010 to help upgrade Yale’s computer systems and establish an employee service center, among other reforms, said John Jibilian, the YaleNext team leader.

The budget cuts forced administrators to extend the time-frame for YaleNext reforms and reduce its costs across the board, but they hit the consultants especially hard, Murray-Randolph said, because the cost of outside consultants could no longer be justified. The Accenture consultants helped design the new systems — which include Web servers, new electronic benefits and payroll systems, and research grant application systems — but Yale employees have now, for the most part, taken over from their Accenture trainers.

“Frankly, they’re probably happy with [the consultants’ departure],” she said, referring to the finance and administration staff, who, like other staff across the University, have faced salary freezes and layoffs.

Ultimately, the University will pay Accenture only a “fraction” of the company’s original price, Vice President for Finance Shauna King said. She declined to disclose the cost of the consultants’ work or the total cost of YaleNext, though she told the News in April that its price tag was “in the millions.”

About 30 percent of the consultants left Yale over the summer, Murray-Randolph said. Another group will leave after the latest systems release this fall, and more will depart by March, Jibilian said. While Yale is sending most of its consultants home, other universities are bringing them in en masse to review business operations and find savings.

Facing a budget shortfall of nearly $70 million, UC Berkeley is paying the consulting firm Bain a total of $3 million over two years to assess its operations and budget as part of an initiative called “Operational Excellence,” similar to YaleNext. Bain is also currently advising the Cornell administration on “Reimagining Cornell,” a restructuring campaign designed to cut expenses. And in July, the firm completed a 107-page report for UNC recommending ways to streamline operations in areas ranging from information technology systems to human resources, said Joe Templeton, a chemistry professor at UNC who is leading “Carolina Counts,” the university’s effort to implement the Bain recommendations.

As Accenture did at Yale, Bain only examined non -academic infrastructure, Templeton said.

UNC has not cut any Bain consultants because they were entirely funded by an anonymous donor, Templeton added.

But at Berkeley, which recently announced a 32 percent increase in student fees, students are questioning whether Bain is worth the public’s money.

“Spending $3 million to hire an outside consulting firm … does not send the best message to students, faculty and staff who face greatly limited resources and reduced benefits,” editorialized The Daily Californian, Berkeley’s student newspaper, on Oct. 6.

But Jeff Denneen, a Bain partner who has consulted at all three universities, said the recommendations of an outside consulting firm will help Berkeley save considerable funds in the long run.

“If you look at the savings range and if you look at costs and fees, our return is pretty substantial,” Denneen said, adding that though each university is paying Bain a one-time fee, they will continue to save money every year.

The latest wave of YaleNext reforms, including an online benefits management system and new expense management software, is due to be completed this month.

Comments

  • anon

    Okay, YDN, this is your chance–your generation’s Weapons of Mass Destruction. Huge amounts of money are gone, are never coming back and we just keep spending. The university is sustaining major financial stress to feed the corporate ego and the band plays on. It is so depressing to love this place and yet have to watch the human and financial toll being exacted.

    This is what it feels like to be snowed. Learn well, my budding journalists, because this is a perfect case study of being fed a corporate party line.