Abilene Christian University eliminated a $4.5 million budget deficit and reimagined itself

Learn how Mindstream helped re-organize the university to find additional cost savings without crippling the institution’s mission or culture 

Starting Position 

Abilene Christian University (ACU) needed to close a significant budget gap and reinvest to expand its online offerings and increase enrollment: 

  • An annual budget deficit of $ 4.5 million, resulting in consecutive years of layoffs, buyouts, and hiring freezes 
  • Steady decline in residential enrollment over the previous 10 years 
  • A culture of decentralization and resistance to change 

Insights & Advice 

ACU’s leadership team brought Mindstream to campus in September 2015 to conduct an Effectiveness and Efficiency Review. The goal was to identify opportunities to close the budget deficit through additional savings and increased revenue, and design options that met or exceeded current service levels. Our scope of work included assessing the overall university strategy, as well as the structure and members of university leadership teams. We also assessed key areas across the organization, including procurement of goods and services, information technology and management, facilities management, marketing and communications, auxiliary services (including the Campus Book Store, Dining, and the Pura Vida Salon), ACU Dallas (ACU’s satellite campus to provide online programs), the ACU library and ACU Press, employee compensation and classification, and administrative coordinator support. 

Mindstream discovered many significant insights during our assessment. Student populations had declined over 10 years, while campus infrastructure and staffing increased over that same period. The ACU Dallas satellite campus had posted a negative Return-on-investment since its creation. Inefficient and costly layers of administration and process kept the university frozen. For example, managers across campus managed too few people and in Administration and Operations division, too many management layers had been created. In addition, finance functions and personnel were decentralized into each division and college. 

Across the university, some offices were understaffed, while other functions, such as office support, had too many FTEs. Severe variations in compensation were common for similar jobs in different divisions. 

Some of the university’s auxiliary services were draining resources without providing appropriate return and over-spending on goods and services, driven by decentralized purchasing policies, were hurting the institution’s ability to close the budget gap. 

We recommended combining the Finance and Business & Operations divisions, which significantly reduced unnecessary spans and layers, which in turn led to more responsive services and reduced costs. Part of that restructuring included reallocating decentralized staff to the Finance division, to serve all divisions and colleges and creating more bandwidth for budget management and reporting. Centralized procurement practices that monitor and control spending were implemented, as well as travel software and policies that curtail costs in those areas. 

Other procurement recommendations included the elimination or outsourcing of auxiliary functions that had not met return-on-investment goals. Our team also executed new RFPs for existing outsourced functions and evaluated outsourcing internal functions, such as IT and Facilities Management. 

We recommended consolidation of office support functions within centers across campus and a structured job class and compensation plan that equalized pay for similar job functions. 

The Mindstream solution set included Critical-To-Quality metrics and Key Performance Indicators to measure success of all initiatives. Also, each plan contained change management initiatives to ensure adherence to and cultural adaptation of new processes and policies. 

Impact 

Mindstream’s analysis and approach enabled ACU to: 

  • Reduce their annual budget by identifying $ 4.5 million in recurring and one- time savings, allowing the university to invest in its online programs and grow enrollment to record levels 
  • Restructure so that functions were more accountable and responsive 
  • Restructure the finance division to be strategic rather than transactional 
  • Reduce expenses across the institution without sacrificing services to students, faculty, or staff 
  • Implement new financial policies and technologies that foster financial discipline 
  • Centralize functions that led to budget woes while preserving the campus culture 

We faced the challenging task of finding ways to offer the same quality of service to students, faculty, and staff while trimming cost and redundancy. Joseph Garcia and his Mindstream team were invaluable in this venture & they provided expert guidance and service. Joseph became part of our team at ACU and I am grateful for his dedication and expertise.

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Dr. Robert Rhodes

Provost
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