email from Ben regarding Bain’s work with Cal:
I wanted to followup to my previous email with an update on the UC Berkeley work, now the first phase has been completed.
Summary video: http://www.youtube.com/watch?v=kb5CXdaveek&feature=player_embedded
Phase 1 summary report (33 page preez): http://www.berkeley.edu/oe/phase1/phase1-summary.pdf
Phase 1 full report (205 page preez): http://www.berkeley.edu/oe/phase1/phase1-full.pdf
Some of the things that I thought were most interesting here were:You’ll notice in the video that the big administrators and leaders on campus are now all supportive; at first glance this seems obvious, but remember that before this effort, all the groups on campus were at each other’s throats and were skeptical of bringing in cost-cutting consultants.
Big findings:
- Berkeley’s current procurement system: 18000+ vendors (75% more vendors per dollar than other colleges, like Stanford) with no real standards
- Berkeley’s current administrative structure: 11 layers of bureaucracy where 55% of supervisors only managed 3 or fewer people; Berkeley’s HR efficiency is 2x worse than competing schools
- Berkeley’s current IT system is decentralized and not standardized, resulting in extra energy and technology costs
- Berkeley’s current energy spend are not actively tracked or managed and are higher than you would expect for a comparable California school
- Berkeley’s student services have substantial overlap and some groups are very inefficient compared to others
- Bain believes that Berkeley can realistically save at least ~$75M/yr if they implement some efficiency programs
- slide 29 of the full presentation shows what this means: “every incremental $25M in savings is equivalent to ~13% increase in student fees, ~10-20 furlough days/affected employee, raising an additional $500M endowment)
