Presentation from Professor Malcolm Gillies, Vice-Chancellor, London Metropolitan University, to the SCONUL Conference 20-21 June 2013, Dublin

1. Outsourcing: The way forward
for higher education services?
Malcolm Gillies
Vice-Chancellor, London Metropolitan University
Chair, London Higher
SCONUL Annual Conference, Dublin, 21 June 2013

2. National site licence:
the need to share
• “Declining budgets within universities
• Volatile exchange rates affecting purchase of journals
• The costs associated with the transition from hard copy
to digital communications
• Relationship between publication and tenure/
promotion
• Copyright issues and restrictive licensing of electronic
information”
(Source: Gillies, Coalition for Innovation in Scholarly
Communications press release, December 1999)

4. Why London?
• 8 million people
• 500K post-secondary
students; 94K staff
• 100K international students
• 40+ publicly-funded HEIs,
£5bn turnover, £12bn value.
• Government estimate of c.
£500M possible services
savings
• Growing private providers,
and HE in FE
• 25-30% of national research
If anywhere can
engage in shared
services on a
significant scale, it
should be London

5. Key Findings: 2010
Grant Thornton study
HEIs in London sceptical of sharing services;
specialist HEIs most interested. Not hungry?
Current Shared Services
• Mainly front office
• Lack of understanding (cf.
outsourcing)
Real Benefits
• Quality and resilience
Myths
• It will solve all my £ worries
• It reduces my competiveness
• VAT makes it not worthwhile?
• It has to be with another HEI
26%
5%
35%
34%
Outsourcing
Joint Ventures
Joint Partnerships
Membership Organization

6. Shared Services
“Services required by more than one
institution, which have been managed
into one entity or extended to serve
multiple institutions from one host in
order to improve service quality and/or
efficiency.”

7. London Sharing – the
Appetite: more and less
Higher appetite: HR and
training, ICT, Procurement, Finance, F
acilities management, Student
administration, Research
management and support
Medium appetite: Professional services
(e.g. legal), Student support and
experience, Library services, Student
accommodation
Lowish appetite: Health and
safety, Marketing, Audit and
compliance, Academic estate
Low appetite: Teaching and
learning, Research (core purposes)
Source: Shared services feasibility
study, Grant Thornton for London
Higher, 2012
A great variety of
appetites; a high
degree of caution and
uncertainty

8. Proportion of respondents expressing an interest in medium term (1-3 years)
implementation
0% 10% 20% 30% 40% 50% 60%
Research
Teaching & Learning
Academic Estate
Audit & Compliance
Marketing
Health & Safety
Student Accommodation
Library Services
Student Support & Experience
Professional Services e.g. legal
Research Mgt & Support
Student Administration
Facilities management
Finance
Procurement
ICT
HR & Training
Percentage of respondents
Question 5. For the
shared services you
are interested in, what
timescale would you
consider as
reasonable/ feasible
for implementation
(considering existing
contracts, costs of exit
and any other
matters)?

10. Three factors in rethinking shared
services
1. Making the most of the VAT
removal to gain critical mass for
selected services offered across
institutional boundaries, and
thereby, returning the savings to
the sector itself, rather than to
the taxman or the private
provider.
(Times Higher Education, 12 Jan. 2012)

11. Three factors in rethinking shared
services
2. Conceiving of shared services
much more broadly across the
bands of appetite – not just the
lowest-hanging fruit among the
highest-appetite services.
(Times Higher Education, 12 Jan. 2012)

12. Three factors in rethinking shared
services
3. Rethinking administrative
processes in a profound, rather
than incidental, way. I mean
through simplification of
services, optimising of
processes, maximizing the use of
inter-connected technologies, as
well as achievement of economies
of some scale.
(Times Higher Education, 12 Jan. 2012)

13. Legacy Administrative Services
At London Met . . . we have recently
opted for rapid, across-the-board re-
engineering of up to seventy
administrative functions, some with up
to one hundred separate process steps.
Why? Because we reckon we (along
with many other universities) spend too
many pence in every pound upon
cumbersome, legacy administrative
services.
(Times Higher Education, 12 Jan. 2012)

14. New-Era Shared Services?
Working with external
operators, London Met wants to go
further: to realize a model of new-era
shared services which other
institutions may want to adopt, or to
join. And so to be one of a growing
number of universities dedicated to
providing top educational value for an
investment more affordable both to
the student and the taxpayer.
(Times Higher Education, 12 Jan. 2012)

15. Shared services initiative, 2012
“[London Metropolitan] University seeks a strategic partner who
will work with us in three stages:
(i) to review the existing administrative business processes of the
University, deploying proven expertise to maximise performance
improvement and transform administrative processing;
(ii) to develop and deliver a shared services partnership to deliver
those transformed processes to the University, delivering
continuous process improvement and cost-savings for
reinvestment;
(iii) subject to confirmation of the business case and the Finance
Bill 2012, to develop and deliver a shared services proposition to
offer to other higher education providers.”
(Call for tenders, 1 February 2012)

16. Possible shared services, 2012
“The administrative services concerned include:
— Information systems and services, providing IT infrastructure and day-to-day support
to staff and students of the University,
— Registry services, providing student record maintenance from application through to
award and alumnus,
— Library facilities,
— Estates, including infrastructure provision, facilities management,
— Finance, including financial record-keeping and provision of regular information for
decision support,
— Procurement support,
— Planning, providing support for decision-making using multiple data sources from
around the University,
— Student services, including counselling, financial advice on sources of student
funding and careers advice,
— Marketing and communications support,
— Human Resources, including payroll services,
— Student recruitment support, for UK, other European Union and other international
students; and,
— University Secretarial support.”
(Call for tenders, London Metropolitan University, 1 February 2012)

17. Ambit of savings?
Experience would seem to show that
just working current processes
harder might achieve a 10-15 per
cent efficiency gain, at best.
Selective reengineering of key
services might up that figure by
another ten per cent, or so; but a
thorough across-the-board re-
engineering might achieve yet
another gain, of up to 20 per cent.
(Times Higher Education, 12 Jan. 2012)

19. Outsourcing: The way forward
for higher education services?
m.gillies@londonmet.ac.uk
+44 20 7133 2001