 We’ve
all heard it before. It’s no secret
that managers of support services are always under exceptional pressure
to cut costs and improve overall efficiency.
Funding changes typically lag the economy, so budget reduction is usually not a
temporary situation. Once the initial budget is reduced, it is
usually some time before spending can be increased, positions refilled,
or other operations returned to pre-reduction levels.
You’re expected to do more with less. This is particularly difficult
for support services since the work is usually directly related to
volume which does not change even if a budget is reduced.
Support services do not have a lot of variable costs and are
typically responsible for many of the organization’s fixed costs such as
software licenses, equipment leases and others. Fixed costs are very
difficult to reduce, especially in the short term.
Support units usually have a higher ratio of salary to operating
costs.
Therefore the creation of soft money through
reduction of positions is less available than budgets where there may
more soft costs such as publications or events.
However, we still always review our operations to seek out efficiencies
or ways in which we can work more effectively and here’s are some questions to
review when you have pending budget
reductions.
What are we doing well?
 We
should continue what we’re doing well.
This will include basic and some enhanced
services. It doesn’t make sense to eliminate or cut back in these areas,
unless what we are doing well causes inefficiencies in other areas. This
is also an opportunity to review transactional volumes and see if trends
can be established. For example, if we’re processing faster, is it
because volume is down. If volume is up and we’re processing faster, it
may indicate that there may be less slack than we thought in the
processing areas.
We should look at how well we actually need to do something. You can have a
6 hour turnaround time from gift receipt to generation of acknowledgments, but the cost of
achieving this may not be worthwhile in light of other priorities.
What do we need to
do better or do that we’re not doing?
In some cases a budget increase may
actually be required. If we look at what we need
to do better, it will help to think about how to adjust resources to
make this happen. There may also be ways where the spending of
additional money may lead to greater efficiency, such as the purchase of
a new higher volume photocopier so staff don’t spend time waiting to
copy information. The introduction of electronic imaging may reduce the
need for filing hard copy documents and make information more accessible
for all staff.
In some areas, such as how we deploy reports if we look at solutions
like web enabled reporting, the more effective use of technology can
lead to productivity improvements for many staff and reductions in paper
and photocopying costs.
Is there anything
we’re doing that some other part of the organization should be doing?
Advancement and development
activities cross organizational boundaries and as such we often assume tasks that are more appropriately done by
other departments. For example, many alumni associations have
a career services department whose functionality may be duplicated by
central human resources. There may be opportunities to transfer
responsibilities and end duplication.
Consider activities that may be
candidates for cost recovery. We may be doing tasks such as sending a
departmental list to a national change of address updating service where
the cost could legitimately be charged to a department.
We also need to review what we should not be doing. For example, we
might consider only sending an
acknowledgment for gifts over a certain level. The large majority of
transactions processed fall on the lower level of the giving pyramid and
account for most of our costs.
What
structures/changes will help us to reach our goals?
Organizational re-design can be key
to working more efficiently. For example: Our network support group may be doing what is normally provided
by central computing and network services. Structural re-design of roles
and responsibilities may be a good strategy.
An example of a radical change in structure is to implement
decentralized data entry. This reduces central costs
and can appropriately re-allocate them to the users of the service.
What
strategies do we need to adopt to achieve the goals/outcomes we want?
Strategies are broad based goals. For
example, a strategy to reduce user support calls would be to focus more
on the initial training when an employee starts with the organization.
It may also be appropriate for strategies to cross organizational
boundaries. For example, combine your customer services function and
switchboard into
one common university wide help center.
What are the
cross functional issues that most affect support services?
This is particularly important for
support services since we typically work with every area in the
organization.
A good example is annual fund, in that gift processing and records staff
will need to keep up with the telemarketing. A strategy would be to
utilize some of the telemarketing students for tracing phone numbers.
How would you
re-deploy staff and budget to accomplish
your tasks?
Shifting positions and re-designing
the organization along functional areas can help. Analyze the relationship of the number of managers to
processing staff. Are there ways to change
job responsibilities so staff can accomplish more than one task?
Are there opportunities to move staff from other units, or move your
staff to other units and consolidate where tasks and output is related
or identical?
Many non-profit organizations are unwilling or unable to do
organizational re-design, yet this can be one of the most effective ways
to be more effective.
Re-evaluate what you’re spending your budget. You may have maintenance contracts in place for office
equipment that could be cancelled and simply go to a replace as needed
strategy.
Office supplies is also one of the budget lines to review for
potential savings.
Are there any
savings through attrition, retirements, contract expirations, unfilled
positions?
Since the single highest cost of any
organization is salary and benefits this area deserves careful
consideration. It’s always advantageous to encourage early retirement,
not fill positions, and evaluate the number of part time and/or
contract employees before letting regular full time employees go.
Unfortunately, you’ll often lose
good staff since staff reductions are always the most painful aspect of
any budget reduction exercise..
If you do have to reduce staff, it’s better to do at once rather than continuous reductions over a number of
months.
Morale can be better if large initial reductions lead to some people being called back to work in the
short to medium term.
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