The OE2C 2015 Progress Report

Executive Summary

In April 2014, SMU launched Project SMU: Operational Excellence for the Second Century (OE2C) to streamline operations and redistribute funds from administration to academic initiatives designed to improve the University’s standing. With the consultation of Bain & Company, the project began with a six-month analysis of the organization’s administrative operations that included more than 230 faculty and staff interviews, discussions with 31 of our peer and aspirant institutions and a review of 100% of non-academic spending, 30 campus databases and systems and more than 2.5 million financial transactions.

The findings revealed that there were seven major areas of opportunity for improved performance with a projected annual savings of $25 – $35 million that could be reallocated to academic purposes. These areas were Travel & Entertainment, Contract Administration, Organization Design, Procurement, Finance, IT and Facilities. In each of these areas, initiative teams were formed to conduct more thorough analyses and make recommendations to help SMU realize the projected savings.

The campus efforts to date have already resulted in significant change to the way SMU does business and more than $12 million in savings. “The process of change has not been easy, but I greatly appreciate the ongoing dedication of the campus community as we continue to see it through,” said President R. Gerald Turner. “The improvements made to date, along with those still to come, will allow SMU to meet its strategic goals, focus new resources on our academic mission and put us on secure footing for the future amid the changing national landscape for higher education.”

Initiatives undertaken over the past year and a half have offered new academic opportunities. For example, using reallocated funds, the University has provided increased, round-the-clock access to ManeFrame, one of the most powerful, high-performance computers in the U.S., enabling large-scale research opportunities for faculty and students.

SMU also has increased the number of Ph.D. students on campus with the new “University-wide Fellowship” program. The program funds up to 15 high-achieving Ph.D. students in a variety of SMU’s 22 doctoral programs. More fellowships will be created in years to come.

“We have made great progress toward our overall goal of reallocating $25-$35 million from administrative expense to our academic mission,” said Julie Wiksten, Associate Vice President for Operational Excellence. “But we still have a long way to go. The Operational Excellence Office exists in part to help keep our focus on making SMU a leader among academic institutions. We welcome the participation and ideas of staff, faculty and students to help make that happen.”

The work of Bain & Company with the Operational Excellence for the Second Century (OE2C) project concluded in September 2015, and the University has now begun a new phase in its goal to secure long-term economic vitality. As it charts its own course for the future, SMU will continue to implement initiatives begun over the past year, and will soon establish “continuous improvement” teams to examine other ways – suggested by staff, faculty and students – to improve administrative functions and reallocate funds to the academic mission.

Vision +

As we near the end of SMU’s Strategic Plan 2006-2015, we’re proud of the great progress we’ve made as an institution. With the Second Century Celebration (2011-2015) and resources provided through the Second Century Campaign, we’ve enjoyed a special time of progress in our academic and student life programs; enhanced quality of students, faculty and staff; improvement in facilities; growth in our endowment; and a rising national reputation.

SMU now has an opportunity to continue its ascent as a leading institution for research and creative achievement, outstanding teaching, unique student and campus experiences, and strong community engagement. As part of a move toward that end, SMU engaged in the Operational Excellence for the Second Century (OE2C) initiative.

Working with OE2C, deans have collaborated with faculty members and the provost to recommend needed actions and initiatives to support SMU in its rise in academic reputation and impact. Thought-leaders among the SMU faculty and staff were called upon to provide valuable input as to how SMU could best achieve its ambitions of attracting outstanding faculty and students, as well as providing our students with a rigorous and engaging educational experience.

As we seek to take advantage of this opportunity, we also must recognize that the world has become increasingly complex and interdependent, and higher education – nationwide – faces significant financial, structural and regulatory challenges.

Our core belief is that the sum of SMU is greater than its parts. To achieve our aspirations, we must become increasingly thoughtful, transparent, collaborative and data-driven. This requires all of us to embrace new and innovative ways of doing things at SMU. By identifying the right balance of resources for the University under the OE2C initiative, we’ve been able to recognize ways to realign spending from administration to academic enterprises. We’ll continue prioritizing funding initiatives that provide cross-disciplinary opportunities for faculty and students to examine and address, allowing them to serve as leaders who confront the most pressing issues facing Dallas, the Southwest, the United States and the world.

Our new strategic priorities will be funded by proceeds resulting from OE2C project initiatives. Our goal is to save between $25 million and $35 million annually from administrative operations and invest those savings into the academic mission of the University, while sustaining a high-performing, financially strong organization with effective and engaged people. The more innovative and efficient we are in providing administrative support to the campus, the more resources we’ll have available to invest in our core academic mission. Our ultimate goal is continuing SMU’s promise to shape world-changers.

–R. Gerald Turner, SMU President

October 2014

Mission +

OE2C stands for Operational Excellence for the Second Century. The University is engaging in this process because a number of external factors are having an impact on higher education institutions throughout the nation, including SMU. The institutions that will thrive are the ones that take proactive steps now to improve efficiencies and direct funds more fully to academic purposes. Some of these factors include a decline in the college-age population and greater competition for the level of students SMU seeks, decreasing federal research support and greater competition for grants, limits on what can be charged for tuition, growth in federal regulations and a decline in interest income.

The budget analysis conducted by the University shows that although SMU will continue to receive revenues from tuition and fees, the amount of increase that can be implemented will not be enough to keep the budget in balance when factoring in other expenses such as financial aid and salary increases. To avoid a deficit, SMU must conduct across-the-board cuts, as it has done recently, or must draw from reserves. Neither are desirable or sustainable strategies.

The OE2C program will enable SMU to fulfill its Strategic Plan. It aims to secure the long-term economic vitality of SMU and its academic mission through operational improvements and savings. The primary objectives are to 1) identify opportunities to redirect spending from non-academic to academic purposes, and 2) sustain a high-performance, financially strong organization for SMU’s long-term future.

Accomplishments +

Savings Tracker

The Office of Operational Excellence updates the OE2C Savings Tracker on a quarterly basis. To date, OE2C has realized $12.3 million in administrative savings, and projects that the ultimate annual savings, after one-time and ongoing annual investments, will be between $22.1 and $29.2 million.


Savings Allocation

Of the $12.3 million of administrative savings, $7.2 million have been redistributed in the following ways.



OE2C Funds University-Wide Initiative

Travel & Entertainment +

Executive Sponsor: Marc Christensen
Project Manager: Marci Armstrong

The OE2C Travel initiative sought to streamline processes relating to travel booking and expense submission. The initiative paved the way for standardizing processes campus-wide by implementing one travel policy and one travel process for the entire University. A new electronic booking and expense tool, Concur, has reduced travel processing time significantly across campus and is also being used for all monthly p-card reconciliation.

  • Paved the way for all of the OE2C initiatives to follow
  • Engaged more than 20 vendors to make the Concur and Christopherson/Anthony selections
  • More than 150 individuals engaged for vendor demonstrations and feedback
  • Studied travel policies from more than 10 universities to understand best practices and re-write the SMU policy
  • Countless hours spent testing the Concur system to prepare it for end users



Contract Administration +

Executive Sponsors: David Chard

Tom Tunks

The OE2C Contract Administration initiative sought to streamline processes relating to contract review and approval. Since its launch in April, contract processing time has dropped to an average of four days. The initiative created a new Senior Contract Administrator role and also established contract leads in each school or administrative unit. An electronic tracking tool, Selectica, and database will monitor contract volume and ensure best practices are followed in the long-term.

  • Engaged more than 50 individuals in focus groups to understand process challenges
  • Spoke with seven vendors to choose the Selectica tracking tool
  • Implemented early tracking mechanisms to ensure the new process was working as planned



Organization Design +

Executive Sponsors      Paul Ludden/Harold Stanley

Chris Regis

During the diagnostic phase of the OE2C project, research revealed that SMU’s most efficient and effective peers in higher education utilize flattened and less hierarchical organizational structures, with fewer “layers” and larger “spans.” To help the University create an organization that is better positioned to reinvest in its academic mission, the Organization Design initiative focused on ensuring that the structure of management best supports the mission of each academic and business unit by restructuring reporting and eliminating 114 positions.

Shared Services: Shared Services for Graduate Application Processing was implemented in fall 2015 for entering students in fall 2016 for both Dedman College and Lyle School of Engineering. Other schools will be added in the future.



Procurement +

Executive Sponsors      Lori White/Mike Condon

Al Niemi

Project Manager      Dawn Norris

The OE2C Procurement initiative focused on two areas:

  • Identifying and creating procurement category recommendations for high-spend areas of procurement across campus
  • Redesigning the existing procurement team to ensure a more strategic approach to reducing procurement costs across all categories. The outcome of the work was the hiring of a new Procurement Director and the creation of Category Manager positions within the purchasing department

The procurement team identified “fast-track” opportunities that could be quickly implemented to achieve savings. These categories are office supplies, printers and cell phones, with savings totaling $1 million. The team identified additional savings opportunities in travel and professional memberships, meals and entertainment, advertising and promotion, and information technology. The team has transferred their recommendation and additional materials to the new director for implementation and further review.



Finance +

Executive Sponsors      Brad Cheves

Tom DiPiero

Project Manager      Ernie Barry

The OE2C Finance initiative kicked off in December 2014 with three sub-teams exploring Finance Service Delivery, Data & Analytics and Budgeting across SMU.   Over the ensuing year, each initiative sub-team identified multiple opportunities to improve service and reduce cost, enabling future sustainability at SMU. The Finance initiative group concluded its work at the end of 2015.

The Budgeting team, tasked with improving the budgeting system and procedures at SMU, redesigned budgeting to improve transparency and enable cross-unit strategic initiatives.

The Data & Analytics team worked with finance leaders across campus to identify key information gaps and design a reporting system capable of providing critical financial information to budget owners and campus leaders. In the coming months they will pilot and continue to refine that reporting system.

The Service Delivery team developed and fielded a survey that identified the fragmentation and overlap of finance work at SMU. Using this information, they delved deeper into many areas and identified multiple quick wins to help reduce unnecessary labor. The information collected and analyzed by the Service Delivery team will be used in the coming months to further streamline finance activities and redesign processes to enable both user-friendly services and more strategic decision making among University leaders.

Shared Services

Finance is one of three areas, along with Information Technology and Facilities, that has moved to a Shared Services model. Shared Services is the provision of a service through one centralized part of an organization, whereas the service previously had been sourced from multiple parts of an organization. Under Shared Services, a central department manages the services for the campus as a whole, acting as an internal service provider. The overall purpose is to improve services and increase campus-wide efficiency. The mission of Finance Shared Services is to deliver reliable, high-quality finance support and transactional processing to faculty, staff and students. As part of the division of Business and Finance, it provides financial services that enable schools, divisions and departments to focus on their core academic, research and service missions.



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IT +

Executive Sponsors      Marc Christensen

Jim Quick

Project Manager      Greg Ivy

The OE2C IT initiative focused on analyzing operational and academic computing at SMU as well as the University’s ERP. The initiative team recommended unifying IT services across campus, increasing support for academic technology, and maximizing use of PeopleSoft functionality. By recommending that the CIO report directly to the President, IT is now positioned to be a strategic enabler to SMU’s academic and administrative needs. Per the team’s recommendations, all IT services are now unified under the Office of Information Technology, which has moved to a Shared Services model along with SMU’s Finance and Facilities departments. All IT staff had the opportunity to express interest in new roles and the IT leadership team has four new members. As operational services are consolidated, additional resources will be available for academic technology, including high performance computing and unique faculty teaching and research needs.

The ERP team evaluated alternate ERP vendors and determined the best decision was to remove customizations and enable electronic workflows in our current PeopleSoft system. In the coming months, business owners and technical staff will work together to identify more specific streamlining opportunities.

  • More than 400 survey responses collected and analyzed
  • More than 175 individuals personally engaged through focus groups
  • Highly engaged Executive Sponsors who worked actively with the team to create a final recommendation
  • Greatest faculty participation of all OE2C initiatives to date

Shared Services: In October 2015, IT reached one critical milestone in the transition to Shared Services: all IT support groups are now using a single ticketing software to track customer requests and resolution. This central application offers a more streamlined request process for the campus and improved collaboration between the various IT groups. The leadership team is continuing to meet with leaders across campus to discuss the next phase of its transition plan.



Facilities +

Executive Sponsors      Tom Barry

Sam Holland

Project Manager      Philip Jabour

The OE2C Facilities initiative focused on service delivery, space utilization, and energy usage at SMU. The Energy Usage team helped to identify a set of strategic energy infrastructure investments that could reduce SMU’s overall energy costs by as much as 20%. The team also recommended changing SMU’s temperature set points to more efficient settings in the heating and cooling seasons, potentially resulting in energy savings of $200K per year.

The Service Delivery team helped to define the newly created Facilities Manager position on campus, undertaken as part of SMU Facilities’ move to a Shared Services model, along with Finance and IT. The Facilities Managers at SMU will now oversee all facilities administration for schools and units, and will receive formal training in facilities-related topics throughout the rest of the year. The Service Delivery team also recommended that SMU pursue a more strategic approach to managing vendors of facilities services by consolidating facilities services under one third party provider.

The Space Utilization team undertook a comprehensive analysis of SMU’s Plano campus, identifying a number of strategic alternatives for the future of the satellite facility. The team also recommended that SMU hire a permanent space planner and develop formal space utilization policies to move the University closer to higher education best practices.



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Engagement +

From the beginning, transparency and collaboration have been key values of the OE2C project. During Bain’s diagnostic work, they conducted interviews with 231 faculty and staff members. OE2C project leads gave presentations to more than 50 faculty and staff groups on campus during the summer and fall of 2014, and presentations to the Student and Faculty Senates continue each semester.

Though the Office for Operational Excellence has distributed several key messages via email to all faculty and staff, the primary communication channel for the project has been Since the website’s launch in September 2014, 12,724 unique visitors have conducted 29,830 visits to the site, making 87,291 pageviews and spending an average of two minutes and ten seconds on the site per visit.

Subscribers to the website grew steadily and currently average about 300 faculty and staff. Subscribers are notified each day there are new posts to the OE2C website.

Addendum A +

OE2C Governance

The OE2C project is managed by the Office of Operational Excellence with key decisions coming from the Executive Committee consisting of the President, R. Gerald Turner; Provost, Paul Ludden/Harold Stanley; Vice President for Business and Finance, Chris Regis; Vice President for Executive Affairs, Thomas Barry; and President of the Faculty Senate, Douglas Reinelt.

While working with Bain & Company, the project also benefitted from the guidance of the OE2C Steering Committee, which consisted of the Executive Committee and the following members:

  • Brad Cheves, Vice President for Development and External Affairs
  • Paul Ward, Vice President for Legal Affairs and Governmental Relations, General Counsel and Secretary
  • Lori White (through May 2015)/Joanne Vogel (beginning June 2015), Vice President for Student Affairs
  • Mike Condon, University Treasurer and Chief Investment Officer
  • Richard Hart, Director of Athletics
  • Marc Christensen, Dean, Lyle School of Engineering
  • Peter Moore, Senior Associate Dean and Associate Dean for General Education, Dedman College
  • Lorea Seidel, Director of Talent Management, Human Resources
  • Karen Drennan, Assistant Dean for Marketing and Communications, Meadows School of the Arts
  • Student Senate representative

The governance model for the OE2C project at the beginning of the design stage was as follows:

Addendum B +

Operational Excellence Office

Vision: Project SMU: Operational Excellence for the Second Century (OE2C) will strengthen the economic vitality of SMU and its academic mission through operational improvements and savings by identifying the right balance of resources for the University.

Mission: The OE2C Office advances the financial sustainability of the University through two objectives: 1) Helping ensure resources support the academic mission; 2) Fostering a University culture of continuous improvement towards best-in-class administrative efficiency and effectiveness.

Values: The OE2C Office is committed to being thoughtful, transparent, collaborative, data-driven and bold.

OE2C Office Team

  • Julie Wiksten, ’78, ’92, Project Manager
  • Julie Forrester, Program Coordinator
  • Lorea Seidel, Human Resources Lead
  • Vinh Pham, Analyst
  • Darrel Pyle, ’01, Analyst
  • Karen Drennan, ’09, Communications Lead
  • Patty Alvey, Academic Advisor
  • Ernie Barry, ’08, Financial Advisor
  • Michael Tumeo, Analytics Advisor
  • Linda Sutton, Administrative Coordinator

Addendum C +

OE2C Council

A council of SMU faculty and staff serves as a grassroots channel for gathering and disseminating OE2C-related information across campus and for providing important feedback from the campus community. Two staff members represent each vice president’s area and a faculty and staff member represent each dean and school. The members of the OE2C Council are as follows:

  • Athletics – Tom Buning
  • Business & Finance – Brian Kelly, Mary Stall
  • DEA – Bob Bucker, Yvette Castilla
  • Legal – Diane Rives
  • Provost – Sue Bierman, Kate Livingston
  • Student Affairs – Jorge Juarez
  • CUL – Bill Dworaczyk, Elizabeth Killingsworth
  • Cox – Marci Armstrong, Bill Dillon
  • Dedman – Luisa del Rosal, Tim Rosendale
  • Dedman Law – Pat Heard, Winston Tubb
  • Lyle – Julie Ellis, Paul Krueger
  • Meadows – Melissa Keene, David Sedman
  • Simmons – Lisa Bell, Milan Sevac
  • Perkins – Council members to be named