Dining, Res. Living targeted for outsourcing

Private companies could take over Dining Services and Residential Living as part of ongoing efforts to cut costs on campus, Executive Vice President John Fry said this summer. Fry said he will consider every department at the University as a possible candidate for outsourcing, though he will focus his efforts this year on meals and dorm services. Outsourcing departments involves contracting private companies to perform their duties. Already, Barnes & Noble has been running The Book Store since July 1. The underlying philosophy behind outsourcing holds that the University's resources should be devoted to things only a university can do, like teaching classes and conducting research. If outside companies could better perform other duties, hiring them to do so saves the University money. Throughout the two years Fry has spent at the University, he has scrutinized its inner workings. Outsourcing can allow the University to get "a real bang from its buck," he says. Administrators are doing market analysis to further understand the needs of students, faculty and staff, while evaluating their satisfaction with University services. "The process is not reflective -- we are gathering a lot of information before any decisions are made," Fry said in June. "I need to look into out-sourcing everything because I need to know what my options are." Currently, Fry is examining 12 outside companies, looking for a third party to evaluate Dining Services. In surveys, the company will concentrate on quality, service and finances. Fry said he will select a third party by mid- or late September. After the survey has been completed, he will decide whether Dining should be outsourced. "At the end of the first semester we will have reached a fork in the road," Fry explained. "Then I will decide whether to have the University continue to operate Dining or whether it would be more efficient to bring in a third party." If Fry determines that the more efficient option is outsourcing, he will use test marketing between January and May to find a company to take over Dining Services. He added that he is very committed to incorporating student input into every aspect of the decision. Toward the end of the year, Fry plans to tackle Residential Living by working with Provost Stanley Chodorow and Vice Provost for University Life Valarie Swain-Cade McCoullum. Chodorow and McCoullum will report to Fry during the second semester. He will then follow through on their recommendations with financial issues in mind. "First we are going to determine if Penn has the right number of beds," Fry said. "Then we will move on to look at the project holistically, with a variety of financial options." Fry said he believes the University needs a more specific plan for the use of finances in facilities -- and said he will have one by the end of the school year. He will also carefully consider adding conveniences to the housing systems to produce a more "hotel" atmosphere. Fry said he will look into coffee shops, exercise complexes and other services to increase student satisfaction in dormitory life. The most prominent possibilities for outsourcing within the Residential Living realm are maintenance and housekeeping. Thus far, the only major outsourcing that the University has completed is its partnership with Barnes & Noble to build a "superstore" on campus that will serve as the University's bookstore. Fry said the new bookstore will provide increased revenue to the University of at least $1 million annually. The groundbreaking for the store will take place toward the beginning of this academic year, Fry said. During future outsourcing planning, Fry said he will take into consideration the University's history while looking at Penn in light of comparable schools. He added that the University would only deal with "reputable" companies. Fry has eliminated certain departments and areas within the University from outsourcing consideration because of their nature. For example, financial aid -- and therefore Student Financial Services -- must be handled by the University because of privacy considerations. "While selective outsourcing will continue to be pursued as one restructuring strategy, many of Penn's administrative operations will never be outsourced," Fry said. "They will, however, be scrutinized regularly to make sure they are serving the campus community well and aggressively managing costs." In the meantime, Fry said he will keep waiting for "the right deal" to save the University money.

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