Come Together The Beatles

The term “silo” has been used a lot lately in FM to describe a process or function that has historically been pretty self-contained. It may have some interaction with other people or processes, but only peripherally. At meetings, people will often say “I work in a silo” as a way to describe their non-integrated work. Fortunately, those of us who stay in these meetings for longer than the first few minutes hear the next part of the discussion, which will contain words like “integrated” and more importantly “convergence”. Convergence is a big new millennium buzzword. In high tech and consumer electronics, it means bringing together separate technologies into a single piece of software or device. For example, a camera-phone is an example of convergence, as is adding the option of PayPal to eBay. In Financial Management, it means putting daily work in the context of the entire UW and thinking about how that work can integrate or “converge” with others. This type of thinking typifies what FM is trying to achieve with the Knowledge Worker Initiative.

The CFO’s office in Treasury, led by Doug Breckel, has joined the convergence club by looking at three previously separate functions –cash, operating funds, and debt management- and finding ways to integrate them, to the great benefit of customers, process partners, and staff. This effort began with the formation of the Cash Management Team last year and continues with the current Debt Management Initiative.

Looking at the specific convergence areas in the CFO’s office, it is easy to identify functions that provide real benefit when thought of outside of their silos. For example, Asset Liability Management is a method for looking at interest rate sensitive elements on both sides of the balance sheet (e.g. assets and liabilities) and seeking ways to structure them such that net assets (e.g. assets minus liabilities) are effectively managed. Another idea is to use the debt function to better manage cash. Since cash typically earns the lowest return, this means holding as little cash as possible or even using a line of credit or other loan instrument as an alternative to holding cash.

On the debt management side of the house, borrowing money when needed can reduce interest expense. This is called “just in time borrowing” and can significantly reduce the cost of debt to campus. In addition, borrowing for more than one project at once can serve to combine legal and finance costs. Both of these techniques can lead to more effective management of Net Assets.

Convergence is very exciting stuff and opens up new ways of thinking about how to manage the University. In Treasury, the process is still in its infancy and we are only just beginning to feel the improvements. As time progresses and more processes are looked at in the context of the institution, the way that we do business will become much more efficient and each of us will feel more empowered to make positive change. And that is what being a knowledge worker is all about.

Indiana Jones Theme John WIlliams

The Global Initiative is a University-wide effort to continue to be a global, inclusive, dynamic and growing University. The Global Initiative manifests itself in many ways. A few years back, UW introduced a common book called Mountains Beyond Mountains, and required all incoming freshmen to read it. Classes and reading groups were built around this book. Both the subject (Dr. Paul Farmer) and the author (Tracy Kidder) of the book were invited to come and speak. The book itself examines themes of service and interconnectedness to others in the world. I read the book and was inspired by the subject’s commitment to service and social justice and his vision of a world larger than just his immediate surroundings.

Another way the Global Initiative is playing out is the University’s commitment to making its students global citizens. The University’s goal is for every single student to experience studying abroad. The study abroad experience – a students immersion in a culture not their own – a first hand experience of  another culture and sometimes a whole new way of thinking  – is the first step in opening their eyes to the greater world out there and to ultimately become better global citizens.

When most of us think of a study abroad experience, we think of spending a quarter or even an entire year in another country. This more traditional study abroad experience is not always practical for students on a strict course schedule or who may be relying on financial aid. UW is committed to being inclusive in this commitment to giving all students a study abroad experience, and to this end they are promoting Exploration Seminars.

Exploration Seminars are month long, five credit study abroad classes that take place between summer and fall quarters. They enable students on a strict course schedule to take part in the study abroad experience and they can be less costly than a quarter or year long study abroad program. Some of these programs are underutilized because they are not as publicized as more established study abroad programs run by different UW departments. David Fenner, Vice Provost of the Office of Global Affairs and several other global hotshots came up with an ingenious plan. They knew they needed to get the word out to students about these programs – especially students who had financial or time constraints. They quickly realized that Advisers could be the key to promoting the program. They also knew that with the heavy workload of many advisors, Exploration Seminars might just go to bottom of the inbox pile and never come back up. They had to find a way to make these Exploration Seminars seem exciting, vital and fresh to the Advisors, so that the Advisers could pass on their excitement to their students. Thus, the Pangaea Awards were born. Advisers were invited to submit proposals that might result in a 10 day trip on an Exploration Seminar, with airfare and accommodations paid. Financial Advisers, like myself and my colleagues in Student Fiscal Services, were also encouraged to apply. This cumulated in my own once in a lifetime trip to Africa (see accompanying story in this issue)

I was later featured in an article in UWeek (see link below) that highlighted the reasons why the Exploration Seminar and general Study Abroad experience has become so important in light of the University’s global mission.

uwnews.washington.edu/ni/uweek/uweekarticle.asp?articleID=25383

SFS continues to work with process partners and other departments in making the study abroad and Exploration Seminar experience more accessible to all students. Having SFS participate in Exploration Seminars brought the financial issue to the forefront. SFS has actively participated in the updating of the Exploration Seminars financial advice webpages, and will be leading financial seminars in the spring. We have also been instrumental in examining the financial burdens financial aid Exploration Seminar students may face, leading to our facilitation of a meeting between many of the offices involved in the Exploration Seminars and the Office of Student Financial Aid. This ultimately led to the creation of a new scholarship aimed at easing the loan debt burden of Exploration Seminar students. SFS continues to collaborate with the Office of Global Affairs, other study abroad related offices and our process partners, to promote the UW’s global initiatives.

Lost in Space Theme.mid John Williams

Have you ever started with a simple process, like paying for employee benefits and tried to find a way to put the costs of those benefits to the budgets they belong to?  And as time passes, the process gets refined, and refined a little more, and tweaked here and there to accomplish a more “exact estimate” (no such thing, by the way!).  Now it is a twisting, turning maze, with very bumpy ground. Then two different people take over the process and  fight their way through the maze and stumble over the ground. When they finally get to the end and peek their heads up over one of the hedges of the maze and see they could have arrived at the same place in just two turns!  This maze is, or was, the process of estimating the University’s benefit load rate (or payroll load rate) each year.  And that is how it felt to try and make the process better.

Benefit Load Rates, (or Payroll Load Rates) are the rates used to charge benefit costs to all budgets that have salary charges.  The University pays over $400 million per year of benefit costs, such as health care, retirement, and social security.  Recording in each budget the actual amount of benefit costs paid is impractical for a number of reasons; one of them being that it would be very difficult to allocate to tens of thousands of budgets the actual dollar amounts paid for benefits every pay period. Also, departments can forecast benefit costs more easily by having an estimate of how many dollars of benefits each dollar of salary costs, depending on the type of salary (faculty, classified, professional, and so forth).

Thus, we have the Benefit, or Payroll Load Rate. Financial Accounting recalculates these estimated benefit rates per salary dollar every year and inputs them into our financial system. We start with finding the ratio of benefit dollars paid the year before to the salaries dollars paid the year before.  Then we adjust it for any expected changes in salaries and in benefits, such as health care premiums, FICA and employer contributions to retirement plans.

The problem with arriving at something by wandering (actually – racing!) through that complicated maze is that it is almost impossible to explain why this year’s maze got us to a different place than last year’s maze.  Also, it is hard to be sure we didn’t trip on that bumpy ground and take a wrong turn on the way to the end.  Lastly – it takes a much longer time to get there!

So we got to work and eliminated most of those turns in the maze, and ended up with a much simpler process – one we could do more quickly, explain more easily, and have more confidence in.  What’s more, when someone asked why a benefit rates increased, we didn’t have to say “the spreadsheet did it”! We started with the calculation we had already completed and were using for the current year. Then, using the same basic data, we re-calculated the rates, starting from the beginning as if we were coming up with a method for the first time.   We took the shortest distance between two points – last year’s benefits costs and last year’s salary costs, plus any known increases.  We eliminated all the steps and formulas that had been done to compare for each of the seven benefit types for each of the nine salary classes, how much we paid for the benefit last year as opposed to how much was expensed to budgets using the load rate.  This meant we did not have to input spreadsheets of monthly data summarizing benefits charged to budgets. In other words, we did not try to do all the “fine tuning” that had evolved over time.  Instead, we just allocated this “over and under” from the prior year at a higher level – by salary class. What we eliminated were tabs and tabs of spreadsheets with allocated and reallocated costs with many linked formulas.  And what we found when we were done was that the rates that resulted from the simpler method were substantially the same as the rates under the old method – with a lot less work.

As a result, we are able to respond sooner to departments who need to know the next year’s rate for their budgeting purposes, we estimate we save about three weeks’ time per year, and we went from a 27-tab spreadsheet to a six or seven tab spreadsheet.  We’re happier, we hope the departments that rely on this process are happier, and we have more time to work on eliminating the turns in other mazes!

 

Click to view slideshow

Hello The Doors

In December 2006, Purchasing and Stores (P&S), 85 staff members strong, was reunited with Financial Management.  Years ago, a decision was made to separate the two areas to ensure independence in purchasing and paying functions. Over the years, as the work has become more computerized, sufficient accounting controls are in place to rejoin our natural partnership in the procurement process.

To manage the transition, Jeff Follman, newly appointed Assistant Controller for FM, was appointed Acting Executive Director for Purchasing and Stores.  Carla Helm, interim Director for Purchasing and Stores continues in that role and reports to Jeff. To celebrate our reunion, Ruth Johnston joined Jeff and Carla to plan the transition which included a “Meet and Greet” all-P&S staff meeting. Jeff welcomed the P&S staff and introduced: V’Ella Warren, Ann Anderson, Ruth Johnston, and me.

Carla discussed initial transition planning and opportunities for P&S staff to take advantage of participation of FM quality improvement teams and training programs.  V’Ella welcomed everyone and talked about the FM culture, the FM Strategy Map and commitment to quality improvement. Ann greeted the staff and talked about upcoming plans and Ruth Johnston described the quality teams and training program. Jeanne described the poster boards of the 13 initiatives underway to achieve our strategic goals and urged everyone to look at the posters and ask questions about what we are doing.

Like any good celebration, Jeff kept us on schedule and invited everyone to take a break and have some treats, look at the posters, and then reconvene.  A question and answer session was held before ending. It appeared to me that there was a good turnout and the folks attending seemed to enjoy the treats and a chance to meet us.

The “Meet and Greet” was just the beginning of integrating Purchasing & Stores into Financial Management. The units also participated in the Recognition Awareness Training Team (RATT) training as well as the “Embracing Change” workshop. See slide show for great shots of the various training sessions.

Click to view larger image

Zip-a-Dee-Doo-Dah Allie Wrubel and Ray Gilbert

In our last issue of New Directions, there was an article on the annual Executive Improvement Team (EIT) retreat and the work done to refresh the Financial Management (FM) Strategy Map.  At that time, the EIT adopted 13 strategic initiatives to move FM closer to our goals.

One of these initiatives was to develop a new strategic dashboard to supplement the existing operational dashboard. The Dashboard Team was delegated the responsibility of developing and producing this strategic dashboard.  Thus, began a new and challenging journey for Dashboard Team members. While EIT members had worked on definitions and measures for this new strategy map, the Dashboard Team was charged with figuring out how to collect and report data related to the desired measures.

Based on the new initiatives, the Dashboard Team was restructured. Charles Bennett, the lead of the team at that time became lead for several new initiatives, so he stepped down and I inherited the lead role. Also, with Purchasing and Stores joining FM in December, Sean Kennedy agreed to join us and share his knowledge and expertise.  The other members of the dashboard team are Dinah Walters, Erin Courtney, Kelley Smith, Randy Lewis, Ruth Johnston, Shari Spung, Tammy Yanez, Tom Phillips, and Vincent Lau.

After being briefed on their new assignment over several meetings, the Dashboard Team held an all day retreat in January 2007 to develop operational plans for collecting information for each strategic measure.  While we all worked hard that day, we took a refreshing lunch break as well as stopped to see a raging Snoqualmie Falls, before going back to work (see photo).

At the February 13 EIT meeting, a proposed plan for developing the dashboard was discussed.  Some plans were accepted and others still need further development.  Unlike FM’s Operational Dashboard measures, the Strategic Dashboard contains quantitative as well as qualitative measures. The qualitative measures require further research, benchmarking, and testing of activities to determine whether they will move us forward.  This takes hard work and is challenging our critical thinking skills.

Help The Beatles

Along with many other changes in Financial Management, there has been ongoing process improvement in Accounts Payable. For nearly a year now, AP has shown great progress in the simple but effective ways it has improved invoice processing. These changes have helped not only the department, but also Financial Management as a whole. I sat down to talk with Assistant Director Pramilla Chand and here are some things she had to say.
 
First, Pramilla explained to me the two ways AP has used Process Improvement. The first involves the invoice processing team. In the past, two separate teams worked on logging and processing. It had been the goal of the department to have invoices logged within 48 hours. But because of the unpredictability of the mail (heavier loads on Mondays and Tuesdays) and not enough cross-training, the staff was rarely able to reach this goal. To help solve the problem, both teams were cross-trained to do each other’s jobs.  This provides each employee with new and different skills and helps to build strengths in ways that might have been missed in the past.  Within one year, the data has shown that real improvements have been made.

The second improvement was focused on customer service; specifically, how to handle the many incoming phone calls that the department receives.  Using QI tools provided by FM, the team identified rapid cross-training processes based on the knowledge worker premise. All AP customer service staff are now able to answer all customer inquiries using the knowledge they have gained. Incoming calls are logged to help identify internal and external training opportunities.   
 
The result of the rapid cross-training has reduced inconsistent information. All AP customer service staff use their knowledge worker skills to multi-task while providing good customer service.

Fiscal Specialist supervisor Keli Johnson continues to encourage process improvement using the knowledge worker skills identified for customer service staff.   The team members take turns presenting a PowerPoint presentation of their assigned tasks.  This builds on their presentation skills and educates all AP staff on consistent procedures. The open communication and sharing among team members has helped create an open dialogue between staff and customers. With each member of the group feeling valued, encouraged and empowered to contribute, the group has been able to deliver higher quality customer service.

Both of these new procedures have shown that cross training, positive encouragement, and open communications can greatly benefit both those inside and outside of the department. Not only has AP been able to achieve its goals, it is also a strong model to follow in other areas of Financial Management.

Thought I'd Died And Gone To Heaven Bryan Adams

Whatever team or initiative you participate in within Financial Management, at some point you are likely to hear someone say, "Put it in the wiki!" From project plans and meeting minutes to instructions for feeding Clyde the goldfish, check the wiki and it's there --- or it soon will be. The wiki is transforming how we do our work. Are you ready?
If you haven't used the Financial Management wiki, you may not understand what all of the fuss is about or even what a wiki is. Simply put, the FM wiki is a tool that you can use to easily create and share your knowledge on the web, whatever that knowledge is. If you work in a team or on a project, you will find that the wiki makes it much easier to collaborate on your work.

Write, Rinse, Repeat

Before the wiki, collaborating on a team charter, for example, could consume an extraordinary amount of time. For instance, you might use Microsoft Word to write a draft of a team charter.  You attach the charter to an email, which you send out to a dozen or so colleagues to review. Your colleagues review the charter and send you their comments and revisions. All of a sudden you have a dozen charters in your inbox filled with changes. You have to review comments, combine revisions, send out another batch for review, and then repeat. Whew!

After you finish the final version, ideally you save the charter in a place where you can find it later. Ideally. More likely, a month or more passes and you get that dreaded last minute request to see the "latest version." Not remembering where you put it, you scour email chains and scan your broken memories fighting off a feeling of impending doom. There has got to be a better way, and there is: enter the wiki!

Do It Once And Share

Looking at that previous example, one of the biggest problems is that there are multiple copies and versions that need to be combined and managed. With long email chains and so many versions, even the most organized person is likely to lose an important idea or comment along the way. Wouldn't it be nice to manage just one version that your colleagues could see from anywhere in the world at any time?

The wiki allows you to do just that. The chief role of a wiki is to provide an online space where participants can collaborate on creating information. You can use the wiki to post training manuals, procedures and policies, project plans, and more. It provides a centralized, up-to-date view of your work that people can comment on or edit.

With the charter example, you would first create a team charter page in the wiki. Everything happens in the wiki. You type up the charter and "save" it, which publishes it online instead of saving it to a file. Rather than sending out an attachment to your colleagues, you send out a link to the page. They log in to the wiki and either make comments or revise the page themselves. There's no email chain, because the comments are all on the page. Whenever a change is made, a history of that change is stored in the wiki. You can go back and revert to previous versions at any time. Best of all, because the charter is online, your colleagues always see the most up-to-date version.

Write it in the wiki, change it in the wiki, and share it in the wiki. Everything is centralized, and always available.

How to Start?

To use the wiki, you will need an account. If you don't already have an account, you will in the next few weeks. Everyone in Financial Management will have an account created for them.
As easy as the wiki is, just like any other piece of software it can take some time to become comfortable with it. Financial Management offers a "Wiki 101" course to help you understand the basics. Contact Dinah Walters, waltersd@u.washington.edu, to find out more about this class.

Join the wiki revolution!