Firm urges U. to restructure

More than two months after it was originally scheduled for completion, the administrative restructuring report prepared for the University by the professional service firm of Coopers & Lybrand is finally finished. The 32-page document, a preliminary version of which was issued last month, will be released to the University community today. It appears in today's Almanac, and copies of the report are also available for examination in libraries and offices across campus. The report assesses the University's current administrative organization, and offers recommendations for reengineering various tasks. Additionally, it discusses benefits that such changes could provide. The report also aims to assist the University by demonstrating ways in which it can reallocate and more efficiently use increasingly-scarce resources. In a letter sent to University faculty and staff yesterday, University President Judith Rodin said "the primary purpose of restructuring is to help us do a better job supporting and enhancing the primary missions of the University: teaching, research and service." Interim Executive Vice President Jack Freeman characterized the report as a "piece of a much bigger exercise," since its suggestions are designed to aid in improving services and reducing costs throughout the University -- although they focus on responsibilities that fall under the EVP Center. Among these responsibilities are human resources, public safety, information systems and computing, facilities management, finance and business services. Overall, the report also advocates "a change in the philosophy and programs for providing compensation and benefits to Penn's employees, with a greater emphasis on rewards based on performance." Freeman said the report represents the University's response to sharply rising administrative costs. He estimated that through restructuring over the next five years, these costs can be cut by 20 percent, ultimately resulting in savings of $25 million per year. "It's not just about cost savings, though," Freeman said. "It's about reallocation as well." Much of the expected savings will come from streamlining and improving existing administrative structures and processes, or from alterations in the University's traditional fiscal management approach that reflect current economic realities and technological advancements. But, he said, the University remains committed to the philosophy of responsibility-center management, which encourages individual schools and budgetary centers to be financially-accountable for their programs. "The whole idea of reengineering is to cut out work that is not productive -- to eliminate wasted steps that do not add value to the end product," Freeman said. As the amount of available work decreases, the University will need fewer personnel, he added. Positions will be eliminated through attrition and intra-University transfers whenever possible. But, layoffs are also expected to occur. Freeman said the report explains the importance of restructuring and "lays out a plan for virtually all administrative processes?in a coherent and systematic way." It refines, but does not fundamentally change, the University's existing system. The plan will be implemented University-wide in stages over the next two to three years, he added. The next immediate step is to hold meetings with the supervisors, administrative staff and faculty members of each school -- all of whom will be affected by administrative restructuring -- in order to "build an understanding of why we are doing this and what it will mean for the University," Freeman said. Following these informational meetings, the development of specific implementation plans will begin in earnest, with an assessment of responsibility and assemblage of a project team looking to coordinate and consolidate administrative services wherever possible. Coopers & Lybrand was originally retained by former Interim University President Claire Fagin. Rodin expanded the firm's role last fall, when she initiated the administrative restructuring project.