The UConn Board of Trustees today approved the hiring of McKinsey & Co., a Washington, D.C.-based consulting firm, to examine UConn’s operations and recommend savings and revenue-enhancements that could total a significant amount of money to the University. Their selection follows a standard competitive search process that included the review of proposals from 10 firms.
“We’re heading into what everyone expects will be an exceptionally difficult budget year,” said chairman of the Board Larry McHugh of fiscal year 2012, which begins on July 1. “It’s important that the University’s operations be as lean, cost-effective, and efficient as possible. It’s also vital that we make sure we are maximizing the revenue we generate beyond tuition and fees, so we have more resources to carry out our mission.”
McKinsey’s work will be divided into two phases: in the first, the firm will have a team in place on campus examining UConn’s operations and benchmarking how the University conducts business against other “best-in-class” institutions. In the second, they will develop action plans to help UConn improve its business practices. The McKinsey assignment is expected to continue through the end of the current academic year.
The firm will be active on the Storrs and regional campuses. The Health Center has already undergone a similar effort and is not part of the McKinsey engagement.
The firm will focus on eight specific areas at UConn:
- Information Technology
- Facilities Operations
- Public Safety
- Procurement
- Financial Operations and Administration
- Human Resources
- Student Affairs
- Athletics
Provost Peter Nicholls will chair a broad-based steering committee that will have an advisory role working with McKinsey and the university community. Academic programs are not part of the scope of the firm’s mission, although IT, business affairs, and human resources work that support academic services will be.
Nicholls said that the firm will continue and expand on the work begun by the Cost, Operations, and Revenue Efficiencies (CORE) group, a team of UConn administrators, students, staff, and faculty formed in 2008 to identify savings. The CORE group’s recommendations have thus far saved UConn roughly $7 million a year.
“McKinsey represents a more wide-ranging, intensive effort to save money and generate dollars than the University could possibly have undertaken on its own,” said Nicholls. “As an outside firm, we expect they will dispassionately and objectively evaluate our operations and processes.”
UConn’s Vice President and Chief Operating Officer Barry Feldman said, “The firm brings significant experience in the field of higher education, as well as elsewhere in the public sector and in industry, which helps make them an excellent fit for the University.”
UConn will pay McKinsey $3.9 million under the contract. The goal is to identify a combination of measures that will represent approximately $50 million in potential savings and additional revenue for the University, according to McHugh.
“This is a classic example of investing money to make and save money,” said McHugh.
