When Holden Thorp, the chancellor of the University of North
Carolina, was looking for ways to cut the university's budget, he
did what many executives in private industry do — hired a
management consultant.
The consultant, Bain & Company, came up with
recommendations that it said could save the university more than
$150 million a year. They included centralizing some of the
university's widely dispersed procurement operations (up to $45
million) and information technology functions (up to $19 million)
and simplifying its organizational structure (up to $12
million).
And since Mr. Thorp hired Bain, both Cornell University and the
University of California, Berkeley, have followed suit. In each
case, the management consultants examined business functions but
stayed away from academic issues like courseloads and tenure.
''Like any other large organization,'' Mr. Thorp said, ''we hire
people, we buy stuff, we connect to the Internet, we build
buildings and take care of our property, and we wanted Bain to look
at how we could carry out those functions as efficiently as
possible.''
''I thought someone from outside the university world would
provide a new perspective,'' he added.
Michael Mankins, a Bain partner, said that while there were many
differences between corporations and universities - chief among
them that universities do not exist to maximize profits - there are
also many similarities.
"Most corporations can save 15 to 30 percent by standardizing their
approach to procurement, and most universities can as well," Mr.
Mankins said. "Information technology tends to be very fragmented
at corporations, and the same tends to be true in higher
education."
The UNC project was funded by an anonymous donor.
Read the full text of the article on the New York Times
website.
