BPM Efficiency
- 2. Tennessee Board of Regents Office of Community Colleges Business Process Model Project Efficiency Impact Report 2 BPM Efficiency Impact Report Overview The Business Process Model (BPM) Project, guided by the Complete College Tennessee Act, is designed to standardize select administrative processes across the community college system. As of November 2014, two of the three phases - process design and training – for the project have been completed. The final phase – implementation – will start with an assessment of implementation and impact across the community college system. A survey was administered to all campus-functional members (finance, financial aid, HR/Payroll, admissions/records, and student accounts receivable) to collect data related to implementation. The instrument was also designed to capture any estimates of potential gains in efficiency, as a result of implementation. This report will highlight the outcomes and implications of the responses to this survey. The efficiency framework for the assessment is based on four measurements – cost, workload, quality, and capacity. The survey instrument included questions related to efficiency for each individual process. Each efficiency category included a question about the impact (positive/neutral/negative) of each process standard, and any measurable estimates of this impact based on a list of defined metrics: annual dollars saved, annual hours saved, process-specific reduction in errors, and annual changes in processing volume. The responses of the participants served as the basis for this report, which offers some preliminary evidence of the overall impact of the BPM Project for individual institutions, as well as the collective system. Based on the preliminary analysis of the data, there is evidence of efficiency gains related to the outcomes of the BPM Project. There is an estimated positive impact of more than $200,000 in annual cost savings per institution. Workload, quality, and capacity improvements were also reported. Based on the average reported measurements, the aggregate outcome for these efficiency factors are estimated to save 16,000 hours annually, reduce errors (2.7%), and increase capacity in many areas. While these outcomes represent reported estimates, the evidence suggests some gains can possibly be significant for a given institution, from many different perspectives on efficiency. This report will highlight the significant gains of each functional area, with some background on how these process standards provide the opportunity for campuses to become more efficient. BPM Efficiency Impact (Annual Estimates per Campus) Avg. Savings (Totals) Avg. Saved Hours (Totals) Error Rates (Avg.) Increase in Capacity (Avg.) Finance $(9,883) ‐118.33 0.4% 15 Financial Aid 89,826 5,800.29 5.2% 510 HR/Payroll 77,001 ‐75.83 1.5% 2 SAR 19,300 1,437.33 4.5% 179 Student $39,902 8,960.83 2.0% 676 Total $216,146 16,004.29 2.7% 276
- 3. Tennessee Board of Regents Office of Community Colleges Business Process Model Project Efficiency Impact Report 3 Finance The finance functional area, according to the survey responses, experienced the lowest outcome for efficiency, resulting in an aggregate annual dollar loss of nearly $10,000. The new standardized processes for finance have also shown evidence of potentially taking more time than existing practices on campus. The negative impact may be the result of additional resources necessary in this area to create efficiencies in other areas of the institution. However, there appear to be possible gains in quality, which was the primary focus of designing processes for this group – reporting accuracy. Given the small amount of units processed for this group, the gains in capacity were insignificant. Finance Processes (Averages based on survey responses) Cost Hours Quality Capacity Grants Module $(5,533) ‐70 0.5% 0 Inception‐to‐date reporting for construction projects ‐ ‐55 1.5% 0 Indirect cost (Facilities & Administrative costs) automated calculations (500) ‐3.3 1.0% 0 Banner Effort Certification for Reporting on Sponsored Projects ‐ 0 0.0% 0 Self‐service Banner for Budget Transfer Requests (2,850) ‐80 1.0% 200 Running daily accounts receivable reconciliation schedules ‐ 0 0.0% 0 Expanded Approval Queues for Capital items to ensure proper asset management ‐ 0 0.0% 0 Components and Attachments to accurately generate asset tags 4,000 50 1.0% 0 Automated Year‐end Schedules (5,000) 40 0.0% 0 Banner's Supplemental Data Engine ‐ 0 0.0% 0 UC4 for automated job scheduling ‐ 0 0.0% 0 Banner Workflow ‐ 0 0.0% 0 BDM and/or Reports Manager $‐ 0 0.0% 0 Total $(9,883) ‐118 0.4% 15.4
- 4. Tennessee Board of Regents Office of Community Colleges Business Process Model Project Efficiency Impact Report 4 Financial Aid The financial aid function represents the largest evidence of the total potential annual cost efficiency gains reported by the campus-functional members. Efficiency related to soft savings also showed the potential of performance improvements. The gains across the different processes were evenly distributed, with some items showing evidence of a potential increase in annual cost. The most significant cost improvements centered on the use of Banner to handle and automate functions related to customer service and financial transactions with outside organizations. As an example of the gains from these features, the TD Client process now allows each campus to utilize a new software application developed by the federal government to manage data and financial transactions. This new process significantly reduces the time necessary to handle these transactions, and also reduces the errors associated with two-way data transfers. Given the volume of customers, paperwork, and transactions associated with the financial aid function, the gains in efficiency are an expected outcome for an office with norms of manual and labor- intensive processes. Financial Aid Processes (Averages based on survey responses) Cost Hours Quality Capacity Period/Algorithmic Budgeting $625 17 6.4% 380 Algorithmic Packaging to package financial aid awards (170) ‐12 4.6% 475 Banner's Attending Hours functionality (292) 153 5.3% 400 Self‐Service Banner to allow students to view their financial aid status and accept their aid 4,220 888 9.1% 567 Self‐Service Banner to for Title IV Authorizations (Questions and Answers tab in SSB) 2,972 1003 7.2% 567 EARLINK to link your tracking requirements updated on BDM 5,400 265 4.1% 467 TD Client 8,369 548 3.7% 800 Roane State Alerts Bolt‐on 3,250 194 4.3% 633 Summer Pell Awards Automation (417) 1270 4.1% 700 Banner for Transfer Monitoring 729 0 3.8% 267 Banner for Student Employment (917) 78 3.3% 182 Banner for Return of Title IV 13,059 392 3.4% 400 Third Party Contracts in Financial Aid using Banner functionality 2,000 100 11.8% 500 Banner's Supplemental Data Engine 2,501 200 5.3% 351 UC4 for automated job scheduling 33,829 188 3.5% 667 Workflow 2,501 101 5.3% 351 BDM and/or Reports Manager 10,000 267 4.4% 933 Reports Manager $2,167 150 3.8% 533 Total $89,826 5800 5.2% 510
- 5. Tennessee Board of Regents Office of Community Colleges Business Process Model Project Efficiency Impact Report 5 Human Resources/Payroll The Human Resources/Payroll function responses show the second highest annual cost savings total. However, the results (estimates) for annual workload (hours) efficiencies were the second lowest, revealing a negative impact. The negative impact on workload may be the result of additional resources necessary in this area to create efficiencies in other areas of the institution. The work to automate processes for faculty contracts is an example of a potential increase in workload for the HR/Payroll function. In terms of quality and capacity impact, quality show significant signs of error reduction for the HR/Payroll processes (1.5 errors per 100 processed), and virtually no impact on annual capacity improvements. While the results appear mixed, the outcomes of this survey show realistic promise for this functional area. The cost impacts are driven by a move to paperless processes and transactions. The increase in hours, more than likely, is a result of more technical responsibilities and new procedural adjustments to review data and information. Quality, in alignment with the cost impacts, is possibly attributed to fewer manual processes related to data entry. Finally, the insignificant impact of capacity could possibly be a reflection of moderate volume volatility, with respect to processing contracts or applications. HR/Payroll Processes (Averages based on survey responses) Cost Hours Quality Capacity Position Budgeting $1 0 0.0% 0 Encumbering salaries ‐ 0 0.0% 0 Salary Planner 5,000 100 0.0% 0 FLAC for Adjuncts 25,001 ‐18 5.3% 0 FLAC For Full Time Faculty 5,000 ‐123 3.5% 20 Workflow for FLAC approvals 5,000 ‐98 0.0% 0 Electronic Personnel Action Forms (EPAF) ‐ 0 0.0% 0 Banner's Supplemental Data Engine 999 0 2.0% 0 UC4 for automated job scheduling ‐ 0 0.0% 0 Workflow 5,000 ‐250 1.0% 0 BDM and/or Reports Manager 21,000 513 3.0% 0 Reports Manager ‐ 0 0.0% 0 Web Time Entry $10,000 ‐200 5.0% 0 Total $77,001 ‐76 1.5% 2
- 6. Tennessee Board of Regents Office of Community Colleges Business Process Model Project Efficiency Impact Report 6 Student Accounts Receivable The efficiency outcomes for the student accounts receivable processes were positive in every area. Based on the survey responses, the cost impact of these standardized processes show the potential for nearly a $20,000 savings annually per campus. In terms of soft savings, there is some evidence of a positive impact in all three areas – workload, quality, and capacity. The improvements centered on a higher utilization of baseline Banner, leveraging automation, and adopting a common approach to billing and collection strategies. SAR Processes (Averages based on survey responses) Cost Hours Quality Capacity TSACONT/TSAACCT to build a contract and assign students to the contract $1,000 0 2.0% 20 TSRCBIL at least daily to apply contract credits for all applicable terms using UC4 ‐ 0 2.0% 0 TSACPDT to designate which students are covered by a particular third party payment 2,000 0 3.0% 100 TSACONR with "Data Extract" for contract reconciliation 3,000 ‐50 1.5% 500 TSRTBIL with Form‐Fusion® or ARGOS® to create the majority of your contractor bills 100 12 1.0% 100 TSRROLL to copy contract rules ‐ 0 0.0% 0 ARGOS or Banner's Student/Bill with Form Fusion to produce bills for currently enrolled students 10,000 50 1.0% 50 ARGOS or Banner with Form‐Fusion to produce a student statement for students no longer enrolled 1,000 125 2.0% 262.5 ARGOS or Banner Population Selection to select groups of students for billing and/or collection processing ‐ 500 32.0% 250 ARGOS or Banner Letter Generation to produce collection letters 3,700 600 5.0% 750 TGPHOLD to automate putting students on hold as they move into collection or write off status 2,000 1025 5.3% 300 Banner payment plan functionality for tracking payment plans of students no longer enrolled (500) ‐850 27.5% 50 Recommended Banner processes each evening using UC4 to insure proper maintenance of student accounts including TGRUNAP ‐ 0 0.0% 0 TSRRFND to automatically post the majority of your student refunds ‐ 0 5.0% 0 Population selection as needed to manage refunding groups 1,000 125 2.7% 1200 Banner's Supplemental Data Engine ‐ 0 0.0% 0 UC4 for automated job scheduling ‐ 0 0.0% 0 Workflow ‐ 0 0.0% 0 BDM and/or Reports Manager (4,000) ‐100 0.0% 0 Reports Manager $‐ 0 0.0% 0 Total $19,300 1437 4.5% 179
- 7. Tennessee Board of Regents Office of Community Colleges Business Process Model Project Efficiency Impact Report 7 Student (Admissions & Records) The efficiency outcomes for the student (admissions and records) processes were positive in every area. Based on the survey responses, the cost impact of these standardized processes show the potential for nearly a $40,000 savings annually per campus. In terms of soft savings, there is some evidence of a positive impact in all three areas – workload, quality, and capacity. The improvements centered on the use of automation for daily routines and scheduled communication. The group also transitioned their approach to storing documents by using document management at the beginning of the process to improve processing times, instead of scanning documents at the end of the process for archival purposes. Student Processes (Averages based on survey responses) Cost Hours Quality Capacity Loading Application Data electronically using baseline Banner $1 50 10.0% ‐ Accepting Online Payments through the Banner Self‐Service application ‐ 1 1.0% 1 Banner's Automated Decision Processing 3,000 800 3.0% 15,000 Creating Recruitment records from ISIR data loads to track prospects ‐ ‐ 0.0% ‐ Banner's Recruiting Module and Web for Prospect functionality ‐ ‐ 0.0% ‐ Banner's Self‐Service Admissions Applications ‐ ‐ 0.0% ‐ Argos for managing select lists and formatting applicant correspondence ‐ 100 0.0% ‐ Banner's Supplemental Data Engine ‐ ‐ 0.0% ‐ UC4 for automated job scheduling of jobs, letters, or reports in the area of Recruiting and Admissions ‐ 150 0.0% ‐ Workflow for any recruiting/admissions processes and/or notifications ‐ 100 0.0% ‐ BDM and/or Reports Manager ‐ 50 0.0% ‐ Reports Manager ‐ ‐ 0.0% ‐ Workflow for Student Initiated Grade Changes ‐1,500 ‐484 ‐2.3% ‐1,000 Workflow to automate updates and notifications for Canceled Courses ‐5,000 ‐1,000 ‐10.0% ‐1,000 Customized Registration Error Messages to alert students 5,000 1,000 ‐10.0% 1,000 Banner's Early Alert Functionality (Faculty Feedback) ‐5,000 ‐1,000 ‐10.0% ‐1,000 Banner's Self‐Service Transcript Requests 5,000 1,000 10.0% 1,000 Banner's Web for Proxy to allow parental/employer/sponsor access to Student Self Service 5,000 1,000 10.0% 1,000 Banner's Transfer Articulation Module 5,000 1,000 10.0% 1,000 Transfer catalog import/export functionality to transfer course catalog information from other Banner schools 5,000 1,000 5.5% 850 Banner's Supplemental Data Engine 5,000 1,000 10.0% 1,000 UC4 for automated job scheduling for registration‐related jobs, letters, or reports 5,000 1,000 10.0% 1,000 Workflow ‐5,000 1,000 ‐10.0% 1,000 BDM and/or Reports Manager 5,000 1,000 10.0% 1,000 Reports Manager? 5,000 ‐ 10.0% 1,000 Workflow for Student Curriculum Changes $2,333 ‐ ‐3.3% ‐ Self‐Service Banner to provide students an online Graduation Application ‐ 27 0.3% 233
- 8. Tennessee Board of Regents Office of Community Colleges Business Process Model Project Efficiency Impact Report 8 Student Processes (Averages based on survey responses) Cost Hours Quality Capacity Mass Entry/Update form to process changes to graduation status 400 167 0.3% 233 Workflow to improve Graduation processing/communications 667 ‐ ‐6.3% ‐ Automated Incomplete Grade processing ‐ ‐ ‐10.0% ‐ CAPP (Walter's State model for XML output; or XML output based on XSL style sheets) ‐ ‐ 0.3% 233 Banner's Supplemental Data Engine 5,000 1,000 0.0% ‐ UC4 for automated job scheduling, letters, or reports in the areas of Catalog, Schedule, or Graduation/Degree Conferral ‐5,000 ‐1,000 10.0% 1,000 Workflow 5,000 1,000 ‐10.0% ‐433 BDM and/or Reports Manager ‐ ‐ 10.0% 1,000 Reports Manager $‐ ‐ 33.3% 233 Total $39,902 8,961 2.0% 676 Conclusion There is preliminary evidence of significant gains in efficiency across the community college system. The potential estimated gains in efficiency total more than $2.8 million in annual savings for the community college system. From a soft savings perspective, the impact of the BPM Project could potentially save the community college system more than 16,000 hours annually, reduce errors for certain processes, and increase the capacity to accommodate future growth and demand. To validate the outcomes of these estimates, each functional area was sent a summary table showing the calculations for each process, and asked to verify the validity of these estimates. To date, the responses have affirmed the validity of these estimates. While the outcomes of this study show evidence of improvements in efficiency, the assumptions made about how these improvements can be realized at each campus must factor several constraints and realities. One, the cost savings (estimated) reported in this study come mainly from a reduction in some form of consumption – part-time hours, user fees, materials, etc. These savings may be repurposed in other areas, which may not be clearly apparent from a budgetary perspective. Two, the reduction of hours spent managing these processes may not result in lower part-time costs or an elimination of a position. This may be due to an absorption of these free hours by other resource-strained processes within a particular office. Three, the ability to realize gains in capacity will be highly dependent on the probability of production volumes increasing in the future. For small institutions, and functional areas with stable volume loads, the probability of experiencing these gains is low. As an overall measurement of potential gains, the level of efficiency improvement will vary due to (1) the level of preexisting inefficiency at each campus, (2) the required technical skill and expertise within each office, and (3) the extent of procedural change necessary to adopt these new process standards. Overall, the results show good evidence of a positive impact from the BPM Project. The initial investment for this project totals close to $1.5 million. Given the projections of more than a $2.8 million reduction in system-wide annual cost, not including the reduction in hours and increase in capacity, the investment could be more than covered after the first year of full implementation across the system. Moving forward, the savings realized from this effort show promise of providing campuses with excess capacity to improve customer service, and allowing them to better accommodate new initiatives related to student success. Equally as important, the effort has produced a culture of continuous improvement necessary to realize even more savings in the future, as well as accommodate new administrative demands.