Doing Business at Penn:
A View from the EVP's Office
Association of Business Administrators
Meeting
September 22, 2005
The EVP Division
Office of the
Executive Vice President
EVP Support
Office of Budget &
Management
Analysis
Information
Systems and
Computing
Office of Audit
and
Compliance
Division of
Business
Services
Division of
Human
Resources
Office of
Investments
Division of
Public
Safety
Division of
Finance and
Treasury
Integration with the Penn
Compact
Access
Integrated
Knowledge
Engagement
EVP Division Serves as an Enabler
FY 2005 Accomplishments
Priority Themes
* Resource Creation
* Transparency
* Collaboration
2005 Accomplishments
Resource Creation
• Benefit Contract Compliance yields $6 million
• Driving Revenue Growth
– Total Bookstore retail sales up 12.6%
– Inn at Penn revenue 14.5% over last year
• Penn becomes a loan consolidator
• Refinancing of long term debt produces $11 million
of debt service savings
2005 Accomplishments
Transparency
• Total Compensation Statement developed and
mailed to employees
• Rollout of U@Penn
• Advanced recommendations of Ad-Hoc Committee
on Safety in a Diverse Environment
2005 Accomplishments
Collaboration
• Upgrades of Oracle general ledger, purchasing
and Penn Marketplace systems
• Enhanced safety initiatives implemented in parking
facilities
• Rollout of next phase of PennERA
• Introduction of On-line Directory
Challenges Facing Higher
Education
Projected Cost of Education
70,000
64,561
60,000
53,264
50,000
40,000
39,635
30,000
20,000
10,000
0
2005
2014
3% Growth/Year
2005
2014
2014
5% Growth/Year
2014
Key Implications:
•Ability to maintain “need blind” admissions
•Willingness to make educational investment
•Public perception
Sustained Federal Budget
Deficits
Source: CBO, Washington Post
Key Implications:
•Poor environment for research funding
•Likely to result in higher interest rates
•Continued pressure on federal student aid programs
Rising Employee Benefit
Costs
Growth in Penn Medical Costs*
140
120
100
80
60
40
20
0
124.7
57.4
13.2
1988
33.3
24.2
1993
1998
2004
2008P
Active Medical
*Active employees only; excludes retiree medical
Key Implications:
•Ability to sustain competitive compensation levels
•Ability to offer current set of benefits
Medical Expense Trends
1988 - 2004
1988
Medical Expenses
No. of enrollees
Cost per enrollee
1993
2004
$ 24.3 M
$ 57.4M
6,789
7,655
11,584
$1,944
$3,174
$4,953
$ 13.2 M
During this period, the number of
enrollees increased by 70%, but Penn
has experienced a 154% increase in
annual medical expenses.
Management/Administrative
Costs
Management & General Expenses/Total Operating Expenses
0.10
0.09
0.095
0.09
0.076
0.08
0.065
0.06
0.04
0.02
0.00
Penn 1999
Penn 2004
Source: Audited Financial Statements
Duke 2004
Stanford
2004
Yale 2004
Key Implications:
•Limited economies of scale as Penn grows
•Need to understand institutional differences and develop
benchmarks
Emerging Challenges…
• Computer Security
• Management Issues
• Public Safety
FY 2006 Goals
Revised format for Goals and Strategies in ‘06
1. Initiatives to Support the EVP Goals
2. Individual Division Goals
3. Personal Development Goals
4. Stretch Goals (personal and/or divisional)
1. Initiatives to Support the
EVP Goals
Create resources through effective, collaborative, and innovative
approaches
Achieve productivity enhancements and cost avoidance and incremental
resource generation equal to 5% of the aggregate cost of the EVP
Division (approx. $5M)
Selected Examples:
•Complete next milestones of the Advancement Project
•Develop plan for Fixed Assets System
•Complete review of revised retiree medical benefit plans
•Pilot a “spend analysis” to identify cost savings
1. Initiatives to Support the
EVP Goals
Recruit, retain, and develop a diverse workforce
80% of EVP division personnel will complete some form of
professional development or training over next 12 months
Selected examples:
•Develop comprehensive diversity recruitment program
•Initiate a management orientation program
•Deliver a Sponsored Projects Certification program
1. Initiatives to Support the
EVP Goals
Enhance the quality of experiences for those who
interact in the Penn community
Selected Examples:
• Achieve the key milestones of PennERA / PennERS
• Implement on-line Tuition Assistance application
• Complete Student Borrowing Management System
• Increase awareness about identity theft and privacy
• Expand health and wellness programs and offerings
• Reduce overall crime within Penn boundaries
2. Individual Division Goals
OACP
OBMA
Execute FY06
Risk-based Audit Plans
Implement New
Budgeting System
Conduct Compliance
Assessments and
Risk Mitigation
Initiatives
Transform the
Budget Process
Execute Privacy
FY06 Work Plan
Improve Data
Accuracy and
Transparency
EVP
Campus Development
Reinitiate MDP
Facilitate Economic
Impact Study
Control Costs of
Central Administration
2. Individual Division Goals
Human Resources
Finance
ISC
Online Tuition
Assistance
Application
Reduce Worker’s
Comp Costs
Tuition Distribution
Reporting
Long-term care
Benefit revisions
Business Control
Model Implementation
Faculty Database
Enhance Security
Labor negotiations
Family-friendly
Programs / policies
TIF Policies
Increased training
Support Business
Continuity
2. Individual Division Goals
Public Safety
Continuous
Implementation of
Ad-hoc Committee
Recommendations
Supervisory and Patrol
Zone Initiatives
Emergency
Preparedness
Business Services
Purchase
Spend Analysis
Break-even Analysis of
Certain Business
Units
Evaluate Expansion
of PCC
Marketing and
Brand Promotions
Investments
Improve on
Endowment’s 5 and
10 year performance
Diversification strategy
Continue to
Develop Investment
Office
3. Personal Development
Check-Up On Yourself
1. Health
2. Financial
(888) PENN-BEN
(877) PENN-RET
3. Professional Development
(215) 898-3400
Effective Management
Reasons cited for success:
•Employs entire team
•Plays to people’s strengths
•Manages around weaknesses
The Long-Term Vision: A Truly Effective Organization
The
Penn
Compact
EVP
President’s
Center
OGC
FRES
EVP
Division
Provost’s
Office
Schools
Centers
Questions and Discussion
1. What is working well?
2. What can be improved?
3. What’s on your mind?