Minnesota State Colleges and Universities (the System), the third largest higher education system in the nation, serves more than 300,000 students statewide annually and has an estimated economic impact of over $8 billion. The System’s 26 two-year community and technical colleges (the Colleges) are available to Minnesota residents with a high school diploma or its equivalent. Baker Tilly has served as the co-sourced internal auditor for the System for the past six years.
In our co-sourced internal audit role, the Baker Tilly higher education team was engaged in several audits of shared service operations involving both administrative (e.g., human resources) and academic support functions (e.g., collaborative bookstore, workforce development). The audit findings resulted in the System’s Board of Trustees (the Board) seeking a consistent governance approach and framework for managing shared services across the System that could accommodate the unique needs of the Colleges within the context of the total System statewide geography and institution-type ecosystem. Effective Enterprise Shared Services (ESS) approaches and operations were deemed by Board, System and College leadership as critical to the System’s ability to meet student and market expectations and needs within fiscal and resource realities. Particularly, the inability of some of the smaller or more remote colleges to attract and retain required talent and expertise has become a top risk.
As a follow-on project to initial audit recommendations for strong shared service governance and operating protocol, Baker Tilly consulted with the System Cabinet and representative institution presidents to facilitate the development and execution of effective governance and project management office approaches to managing shared services. Our work will assist the System and its member institutions to determine which functions and specific activities should be considered for shared services, how to prioritize their execution, what frameworks and resources are required for impactful and cost-effective operations and keys for making and governing decisions around participation and funding, operational priorities and service levels. The initiative assumes ownership by the System’s various entities and takes an inclusive approach supported by existing governance structures to establish how to move forward on the shared service journey to benefit students, staff/faculty and stakeholders.
This effort began with work related to the human resources (HR) shared services operations and collaboration with the Vice Chancellor of HR to enhance governance and operational oversight frameworks for improved responsiveness, role clarification and agreed-to performance outcomes. Based on this work, the HR shared services function was able to report stabilized operations at the May 2022 Board meeting and continues to evolve its collaboration with institution partners. At the time of this case study, the broader effort to establish enterprise-wide governance frameworks, approaches for establishing shared service options and a project management office to oversee both the implementation and the performance monitoring of these ESS operations is nearing completion, and a pilot project to “test” and evaluate the developed frameworks has been initiated. Past shared service efforts have proven to be beneficial to students based on savings directly to them (i.e., cost reduction due to online books) and enhanced responsiveness based on common models to serving them (e.g., workforce development programming). Additionally, System staff have benefited from consistent access to technology improvements, backup staffing capabilities and availability of specialized expertise.
Overall, shared service operations have also offered the ability for remote work, which has enhanced talent recruitment and retention. The intended outcomes for this ESS effort are enhanced approaches to service and program delivery, agility to more quickly to meet changing market needs, ability to ensure talent capacity and required expertise consistently statewide, risk reduction due to consistent approaches aligned with compliance requirements and regulations and fewer duplicative efforts in designing and executing service delivery to students, faculty and staff based on leading practices.
For more information, or to learn more about how Baker Tilly’s higher education specialists can help your college, contact our team.