To all Faculty and Staff,
Last summer I sent you a letter addressing Stony Brook's budget situation which outlined the steps we planned to take to address the shortfall created by the state budget cuts. At the time we all hoped that the situation would be temporary, with possible relief from SUNY's budget cuts forthcoming. Today, Stony Brook's fiscal situation remains critical. We continue to face budgeting challenges in the form of additional cuts delivered to the University and to the Hospital.
Over the last year, we have seen that Stony Brook is a resilient community with a dedicated faculty, staff, and student body that has continued to excel, even in these tough times. I want to thank all of you for what you have done to help us through this difficult period and I want to take this opportunity to update you on the tremendous collective progress we have made.
Thanks to a targeted gift from the Stony Brook Foundation, we have partnered with Bain and Company, a leading global consulting firm, on the Operational Excellence portion of Project 50 Forward. Over the last year we have planned and conducted an objective, cross campus analysis with the goal of identifying ways for Stony Brook to become more efficient and effective while still preserving the fundamental core teaching, research, and service missions of the University.
Over 150 faculty, staff and students have participated in the development of the opportunities identified during the diagnostic and design phases of Operational Excellence via participation in initiative design teams, surveys, interviews and focus groups. As a result of these cumulative efforts the Operational Excellence Steering Committee, led by me with representation from the faculty and administration, has committed to implementing these efforts with a broad spectrum of support from the campus.
The key savings opportunities fall into three categories: procurement savings of ~$10M-14M to be achieved through improved policies, practices and IT enhancement; organizational savings of $11M-14M to be gained through streamlining the organization's processes and cost structures; and process improvement savings of ~$2M to be realized reducing the burden on staff time through the implementation of more effective systems, policies and procedures. The following recommendations have been developed and vetted in collaboration with key stakeholders across the campus to ensure that the solutions are appropriate for Stony Brook:
* Procurement: Stony Brook purchased ~$160M worth of goods and services in 2009. Opportunities have been identified to reduce this spending by 6-9% using 4 key strategies: setting campus wide spending policies, monitoring adherence to those policies, proactively controlling spending, and managing the purchase prices. Towards these goals, the Steering Committee supports standardizing the purchase options in some categories, e.g. office and lab supplies, furniture and computers, and instituting spending policies in other categories, e.g. travel and cell phones.
* Organization: Comparisons with other Universities proved that Stony Brook's administrative staff levels are lean, but a practical analysis showed that there is room for further improvement through increasing the number of reports to each manager and asking departments/colleges to share staff. A plan to implement these principles will be developed gradually over the next 2-3 years. In the meantime, there will be a strict focus to limit hiring as the University fills vacancies internally where possible through a process of redeployment and reassignment providing training and development of staff if needed.
* Process and capabilities: The Steering Committee will support the redesign and automation of many processes across the University. For example, Stony Brook's hiring process was determined to be lengthy and complicated due to several 'bottlenecks'. The recommendation to purchase and implement an automated tracking system will enable Stony Brook to reduce time and cost to hire by ~40%. The investments in automation that will be required have been documented and they will be addressed going forward.
In addition to potential savings, opportunities exist to enhance revenue by $10-17M through investing in the strategic core across research, advancement and academic offerings. The Steering Committee is committed to investing in and implementing the following revenue opportunities:
* Research funding: Stony Brook will explore opportunities to grow grant activity, increase overhead capture, and improve the grant win rate.
* Advancement: The University will pursue strategies to increase Stony Brook's alumni giving rate and to leverage Stony Brook's economic impact by increasing contributions from the local community, corporations and foundations.
* Academic offerings: The University will develop additional offerings for summer/winter session and online to provide great course availability and increase enrollment.
To ensure the full realization of all of the identified opportunities, Stony Brook has established a Program Management Office (PMO) to build and sustain a process of continuous improvement. The PMO will track the progress of the initiatives over time and will measure the impact of the proposed changes using tracking tools and predetermined metrics. The PMO will also coordinate communication to the campus to share further information related to specific initiatives at the appropriate time.
Every effort to reduce costs, decrease spending and increase revenue has been chosen and will be executed with the goal of preserving our academic components. In addition, we will continue as an institution to find ways to reward excellence and invest in programs of quality even in this environment of fiscal austerity.
I look forward to providing you with a more in depth update about the
impact of Operational Excellence on Stony Brook at our meeting in
September. In the meantime, I want to thank you for your continued
help and support.
Samuel L. Stanley Jr., M.D.