Appendix P-2. Sustaining New Synergies Revenue Generation and Cost-Savings Strategies Source: Sustaining New Synergies Task Force, April 15, 2010

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1 Appendix P-2. Sustaining New Synergies Revenue Generation and Cost-Savings Strategies Source: Sustaining New Synergies Task Force, April 15, 2010 Revenue Generation Opportunities R1: Modify CMIP Distribution Policy to Increase Distribution to the General Fund The cap on interest earned on non-general fund cash balances is currently 3.50% and has funded the SAP installation. The University could extend the cap on interest earned on non-general fund cash balances. It could then redirect all/some portion of the earnings in excess of some stated percent toward the General Fund to provide an increase over the $16.5 million currently budgeted interest income. R2: Pursue Opportunities for Campus Cards Evaluate the existing campus cards (ID, Athletics, white card, etc.) to strategically assess overall functionality and business needs to increase financial uses on and off campus. Identify opportunities to generate revenue-sharing and interest income while incorporating new technologies requested by students and their parents. R3: Expand Distance Education to Enrolled Students Evaluate the use of technologies to deliver course content via the internet for a market based fee without compromising academic rigor. Develop the proper financial model and incentives where the university, colleges, schools and faculty will benefit from the extra funds generated. R4: Sell or Lease Commercial and Real Estate Assets Purdue and its Foundation own valuable commercial and real estate assets that have revenue potential. Evaluate the opportunity to lease or sell land for development. R5: Aggressively License Digital Content and Intellectual Property Evaluate and actively pursue opportunities to license digital content or other intellectual property to develop or increment revenue streams. R6: Change Endowment Spending Policy (up 0.5 percent) Conduct an assessment to determine the long-term scenarios to the endowment value and impact to distribution to the general fund if an increase of 0.5% to the endowment spending policy were implemented. This assessment will include identification and modeling of potential risks to the overall endowment value. 1 P age

2 R7: Pursue Professional Education and Continuing Education Programs Establish new revenue-generating adult and professional education classes to provide Continuing Education Units (CEUs) to holders of professional licenses and certifications internal and external to the institution (i.e. Accounting, Engineering, Legal, Treasury, etc.). To encourage participation, financial models and incentives must allow units to cover costs and share in the financial return. R8: Change Tuition and Fee Policy to Charge for Credit Hours in excess of X Hours Currently, Purdue students enrolled in less than a threshold number of credit hours pay a per-credit-hour rate, and students enrolled in more than the threshold number of hours pay a flat fee. Conduct a peer review of credit hour pricing models. Investigate the potential of changing Purdue s model with sensitivity toward the biennial fee setting timeline. R9: Sell Naming Rights for Existing Facilities and Advertising Pursue naming rights or sponsorships for existing facilities/venues and events, including those named for donors or distinguished figures. This initiative would require dedicated and aggressive effort, as well as active participation from Advancement, Purdue Marketing & Media, and the University contracting group to pursue long-term opportunities. Develop strategic alliances with selected partners such as major vendors, local retailers, student groups, community, etc., to generate revenue from paid advertising. Consider use of screensaver feature in Windows for all Universitynetworked computers and/or Purdue vehicles for these advertising venues. R10: Increase Resource Utilization through External Partnerships Purdue and its Foundations steward many resources that may be of great interest to local stakeholders (e.g., data center, research lab instrumentation, library resources, etc.). Some of these resources offer capabilities that are critical to the University s mission, but are not utilized to full capacity. Partnerships with external stakeholders may provide opportunity for revenue generation through the sale/lease of excess capacity. For example, the MRI facility at InnerVision West (Purdue Research Park) benefits Purdue research and a local health care system. 2 P age

3 Cost Savings Opportunities C1: Create Retirement Incentive Program (in process) Create incentives or remove barriers to retirement for eligible employees. This allows funding for the vacated positions to be redirected and for the related medical and retirement savings to be directed to the medical benefit pool. C2: Reduce or Eliminate Strategic Plan Allocations The strategic plan was created by the Purdue community during a stronger and more stable economic time. The level of support for general funded scholarships and strategic plan investments should be reconsidered in light of the new economic environment. C3: Reduce Scholarship Funding from the General Fund (in process) Evaluate a shift of scholarship funding from the General Fund to the non- General Fund or reduce scholarship support. C4: Conduct Academic Program Review Academic programs are at the heart of the institution and drive all costs 1. Peer benchmark data shows that academic program reviews and resulting efficiencies have been an important part of the response to the economic downturn by many similar institutions. Internally, many ideas collected through the Sustaining New Synergies (SNS) web site fall under the Academic Program Review category. While the SNS Task Force recognizes that these ideas fall outside our scope, we strongly encourage the swift, formal initiation of an academic program review at Purdue. Conducting a thorough academic program review takes a significant amount of time and effort. However, there are likely opportunities for saving that can occur in tandem with the review. Setting a financial target for quick wins in the academic domain will stimulate cost savings activities while the comprehensive review is in process. This activity must be done with a focus on offering our core curriculum more efficiently while maintaining the high quality for which Purdue is known. C5: Strategic Sourcing (in process) Strategic sourcing will review how goods and services are acquired by the University, and seek opportunities to improve the overall price or quality for those goods and services. The goal is to develop vendor alliances that maximize the total value equation (quality, service, and price). Also under consideration will be the processes involved in negotiating, requisitioning, ordering, receiving and paying for purchased goods while improving and simplifying these processes end-to-end. 3 P age

4 C6: Implement Base Budget Reductions In the absence of a budget process that requires consistent line item construction across all units, a strategic and flexible method to capture recurring cost savings should be provided. However, if the budget reduction requirements exceed our capacity for strategic savings, across the board base budget reductions will be required. C7: Evaluate Print Media and Related Postage Expenditures Initiate a campus-wide assessment of print media that are published and widely distributed both on and off campus. Identify alternative distribution methods available through existing channels in order to reduce printing costs, postage costs and paper use. Identify applications that allow employees to opt in or opt out of advertisements and mass mailings. Promote the use of sustainable methods, such as PurduE-Board (used to replace sidewalk flyers) and filtering mailing lists for specific target audiences. Partner with existing APSAC initiative. C8: Evaluate University Staff Vehicle Assignments Evaluate the business case and return on investment for vehicle acquisition and assignments to individuals and units. C9: Review and Evaluate Travel Expenditure Policies Evaluate current travel policies and establish guidelines to optimize travel value and encourage more electronic meeting participation, as well as demonstrable return on investment for actual travel conducted. Consider changes to per diem eligibility times and conditions; limits on number of Purdue participants to events; mandatory travel partners (i.e., airline, hotel, etc.). C10: Evaluate Hospitality Spending Currently, Purdue s hospitality policy allows units to spend general funds on hospitality. A deeper evaluation of hospitality spending with a focus on the general fund component could identify targeted opportunities for savings. For example, serving meals during staff meetings has been identified as an area of opportunity. C11: Review Event Spending Hosting events plays an important role in advancing Purdue s strategic plan. A review of event spending may identify opportunities to reduce the overall investment while maintaining the quality and impact of the events. Additionally, the review may identify events that could be eliminated with minimal impact. C12: Evaluate Legal Services Sourcing Evaluate internal and multiple external sources for legal services. C13: Reduce Number of Quarter-Time Graduate Appointments 4 P age

5 Re-evaluate ¼-time FTE graduate student appointments. Quarter-time appointments only contribute 10 hours of labor weekly, but receive full tuition remission benefits paid by the University s central benefits pool. When a department funds a typical ½-FTE individual graduate student appointment with two ¼-time FTE graduate students, the total cost to the University is increased by the additional fee remission. Reducing or placing a cap on the number of ¼- time FTE appointments should be considered as an important policy adjustment in conjunction with other options for increasing graduate student funding opportunities. C14: Review/Update Personal Office and Work Area Space Design Standards Review and update work area design standards for both new and remodeled space. Establish and maintain standards of size, aesthetic finish, furnishings and frequency of renovations. These standards could help control first and ongoing maintenance expenses of occupied spaces (i.e., offices, conference rooms and staff relaxation break areas). C15: Evaluate Electronic Workflow Solutions and Elimination of Paper Forms Evaluate University processes and related forms for electronic solutions which include electronic signatures, minimizing or eliminating physical distribution of forms, and signature retrieval efforts. Opportunities include employment, benefits, annual certifications and disclosures, etc. C16: Review Reserve and Carry-Forward Balance Practices A significant amount of cash is held in reserve accounts, and each year units carry forward significant year-end balances. Currently, Purdue s budget policy allows unconstrained year-end carry forwards. Utilizing funds from reserves or temporarily utilizing carry-forward balances could potentially create a source for significant short-term cash. C17: Evaluate Staff and Dependent Remission Policy Review Tuition and Fee Remission Rates and Eligibility Requirements (under review). Conduct a peer review of faculty and staff tuition remission programs for full- and part-time employees. Compare Purdue s program based on eligibility, utilization, benefits value and need. Evaluate the current level of fee remissions granted to graduate students appointed to teaching and research positions, balancing opportunities for reduced costs and increased revenue while ensuring enrollment projections and research needs are met. C18: Eliminate Subsidies for Miscellaneous Operations Some operations across campus receive indirect subsidies to remain viable. Subsidies supporting these operations should be reviewed and evaluated against the values derived. For example, the rates charged to units do not always factor in total utility costs, costs of central business operations, and 5 P age

6 information technology infrastructure. costs and to fully recover indirect costs. Rates should be built to reflect direct C19: Evaluate University Stores Operation Evaluate the business need of campus units and the role of and administrative allocation around University Stores. Reconsider the policy which allows campus customers to bypass purchasing from Stores which results in an inefficient and incomplete allocation of a fixed cost. Right-sizing the operation, the inventoried products and repurposing any idled space could generate administrative efficiencies and possibly reduce certain product and inventory costs. C20: Evaluate Internal Print Shop Conduct an assessment of business needs related to on-campus printing. C21: Evaluate Redundancy of Functions across West Lafayette Campus Areas such as, but not limited to, Human Resources, Diversity, and Engagement exist in different areas of the University and may be performing redundant services. A formal benchmarking review can assess redundancies and improve efficiencies. Consider expanding this evaluation to those not included in the benchmarking review. C22: Review Criteria for Distribution of Complimentary Offerings Evaluate current policies for distribution of complimentary tickets policies and giveaways by sponsoring departments (University Theatre, Convocations, Athletics and events sponsored by academic units). Concentrate on areas where general funds are used to purchase ticket blocks or are subsidized by departmental general funds. The review could increase awareness of the true cost of these offerings, could increase a stronger sense of accountability in the decision-making process, and may identify opportunities for savings. Overarching Consideration Review University Budget Model Some units have shown interest in a budget model that incorporates some attributes of a responsibility-centered management model. Their interest is centered on a model that is more responsive to shifts in enrollment and designed to adapt to strategic priorities. Adopting a budget model that is more responsive to unit level changes may also support strategic progress. 1 Payseur, Victoria. Tight Budgets Call for Focus on Academic Program Review, Business Officer, March P age