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Treasury and Payments

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Discover the latest numbers, news and market moves to know about each week with Ginger Chambless, Commercial Banking’s Head of Research.

Higher Education

Could Shared Services Help Your Institution?

Shared services agreements are gaining popularity among colleges and universities looking to reduce costs. But is it right for your school?

As many colleges and universities work to balance budgets while facing rising operating costs and continuous funding challenges—including flat and declining tuition and endowments—many are beginning to explore the benefits of shared services initiatives to streamline and centralize administrative tasks. But is a cost-sharing partnership right for your institution?


James F. Lock, J.P. Morgan Treasury Services Specialist, encourages CFOs and treasurers to ask themselves a few important questions that, surprisingly for some, are more closely related to institutional strategy rather than size. “Some of our clients are concerned that their organization isn’t large or complex enough to warrant shared services,” explains Lock. “But the question isn’t about complexity or size of institution, it’s about having the ability to consolidate similar functions into a single office. This can often free up scattered resources to streamline processes, providing a better customer experience and achieving financial savings.” When considering shared services arrangements for your institution, Lock suggests a few key considerations below.

Clearly Established Goals

Before exploring shared services initiatives, Lock recommends identifying the key goals your institution has that could benefit from such an arrangement and the success measure you’ll use to quantitatively measure its performance. In the initial data-gather phase, begin by assessing financial operations and identifying where your organization has tried to bring about change in the past. Then compare yourself to other case studies from similar schools, or ones facing a similar challenge or need. “By clearly defining the ‘what’ and the ‘why’—two foundational elements in any change management effort—business officers can take a more metric-based approach to the discussion, which can help with securing senior stakeholder buy-in,” says Lock.

Think Outside the Box

According to Lock, shared services can help improve efficiency and manage costs in numerous departments for higher education institutions. “Schools who consider shared services beneficial only for their accounts receivable and accounts payable departments are often missing out on a larger opportunity for their institution,” he explains. “Often, these are the most obvious areas to consolidate first, but frequently, they’re just the beginning. Areas such as human resources, payroll, connectivity services, purchasing, audit and compliance, and food services are also prime contenders for shared services benefits.”

Timing Is Everything

One of the most frequent challenges to successful shared services arrangements, in Lock’s experience, is failing to consider when they should happen. “It’s critical to consider other organizational changes that are either in progress or planned to occur in the near- and mid-term that could interfere with such an initiative or cause a resource drain,” says Lock. Instead, he suggests mapping out future resource planning efforts and the impacts they could have during historically busy periods (e.g., the beginning or end of the academic year) to determine the optimal time to embark on this type of initiative.

Leadership Support

“By their nature, shared service arrangements will impact both operations and culture at any institution,” adds Lock. “Securing senior management buy-in and willingness to commit resources is key in successfully implementing this type of initiative.” He recommends reviewing any existing strategic plans that may compete with the resource and management commitment needed to pursue shared services. He also suggests taking the time to think through all the different levels of senior leader commitment and executive sponsorship needed to provide oversight, guidance and visible support from the top of the organization to ensure funding and implementations are achievable.

Training and Implementations

Taking into consideration the knowledge, experience and tools your organization currently has related to the services you’re exploring can help to determine what types of training may be needed across the institution to implement a shared services arrangement. Lock recommends reaching out to peers in other institutions who can offer advice and serve as a sounding board to address questions and obstacles that arise and proactively identify answers.

James Lock

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