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The newspaper of The Johns Hopkins University June 27, 2005 | Vol. 34 No. 38
University, Health System to Consolidate Some Offices

Service centers for seven office functions will be launched in July 2006

By Jeanne Johnson

In an effort to streamline and improve the business practices of The Johns Hopkins University and the Johns Hopkins Health System, leaders of the entities have decided that the two will share service centers for seven office functions, beginning in July 2006.

The change, though not a formal part of HopkinsOne, was occasioned by that business initiative, which also will go into effect in July 2006.

"It's a way to capture the advantages of the HopkinsOne structure," says James McGill, the university's senior vice president for finance and administration. "After consideration, this decision became an obvious one."

The shared service centers will combine staff from the university and health system to perform the same functions, "only better," McGill says. People who perform similar functions will be housed in one location, sharing common procedures, equipment and personnel.

The leaders chosen to head the centers come from throughout Johns Hopkins. Sponsored Projects will be led by Lynn Kingsley, currently director of cost and research accounting, JHU; Accounts Receivable, Ken Hoffmeyer, associate controller, JHU; Payroll, Barb Warren, director of tax and payroll, JHU; Accounts Payable, Kathy Ward, manager of disbursements, JHHS; Fixed Assets, Ed Mooney, director of general accounting, JHHS; Supply Chain/Purchasing, co-leaders Paul Beyer, director of purchasing, JHU, and Bill Kennett, senior director of supply chain, JHHS; and Benefits, Heidi Conway, senior director of benefits planning and administration, JHU.

In 2007, a Johns Hopkins Human Re-sources Service Center for both the university and the health system will open.

Each center will be accountable to an advisory committee consisting of representatives from across Johns Hopkins. "Staff will be able to develop expertise in common ways of doing things but still be sensitive to the idiosyncrasies of the organizations they serve," McGill says.

McGill and Ronald Werthman, vice president for finance for the health system, say that the HopkinsOne project presents a unique opportunity to increase efficiency by consolidating "back office" functions like payroll and accounts payable. HopkinsOne is a multiyear project to modernize most of Johns Hopkins' business and administrative systems by installing integrated, enterprisewide software called SAP.

McGill acknowledges the fear among some employees that service center consolidation represents a trend to meld or homogenize an organization that is known for its decentralization and distinctive character across departments and divisions. However, service centers are not new to Johns Hopkins; they exist, for example, in development, internal audit, real estate, information technology and telecommunications.

In addition, "it's important to realize that Johns Hopkins' strength comes from a decentralized flow of funds at the divisional level or below, which minimizes outside bureaucracy and encourages an entrepreneurial spirit among faculty," McGill says. "From a business perspective, some consolidation makes sense. We will work assiduously to not put any roadblocks in the way of entrepreneurship, nor will we make any changes in how divisional spending decisions are made. Deans and department heads make those decisions, and that won't change."

Both Werthman and McGill assure employees that the changes will not pose a threat to job security. "In the long run, service centers will mean that fewer people will perform these back office functions, but it will take a few years for these centers to fully hit their stride," McGill says. "In the meantime, some people will leave or retire; depending upon their roles, we may not hire employees to replace them. And we will give those who stay the opportunity to be retrained."

Werthman points out that when the health system combined office functions more than a decade ago, not only did efficiency increase, but jobs were added rather than lost because of overall growth. "Change is never easy, but it is inevitable," Werthman says. "I still think we have a good track record when it comes to demonstrating concern for all our employees' careers."

The next step is for service center heads to develop business plans and determine the nature of the service agreements they will establish with constituents, turnaround times and other operational details, Werthman says.

Service center locations and other details are not yet determined.


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