UC Berkeley’s high-cost effort to look into operational savings has just issued its first interim report. As outlined in the video above, or by looking through the slide deck, Operational Excellence has already identified numerous areas where more efficient structures or procedures could produce significant savings for the university.
When the Orwellian-sounding Operational Excellence launched last October, the one figure which attracted the most attention was the $3 million cost of the consultants working on the project, Bain & Company. Although the price stuck in my craw, I argued that it could be worth it. From the preliminary work, it looks as though the money will be well spent.
Some of the inefficiencies in the university are striking, even if the broad sweep of the initial conclusions will surprise no one who knows the institution. There is tons of bureaucracy: more than half of supervisors (excluding faculty) have fewer than three direct reports. IT, like so much, is radically decentralized — there are more than 900 servers in more than 50 buildings. Berkeley has one human resources employee (FTE) for every 58 FTEs, compared to 1:127 in the education sector in general. The university spends nearly $600 million on purchases each year, but makes insufficient efforts to take advantage of its buying power.
The final diagnostic results will be made available in April.