Introduction

TRAINING MANUAL SECTION 1

1.1 Introduction

Welcome to Western Michigan University’s (the “University”) Strategic Resource Management (“SRM”) Operating Manual. This manual is designed to assist deans, associate deans, chairs, directors, business managers and any other users involved in the SRM process by providing clear documentation of the SRM process and related topics. This manual will be updated periodically, and we hope you find it to be an informative and useful guide. Please contact us with any questions or comments.

Colleen Scarff, associate vice president for business and finance

Office: (269) 387-4268

Business and Finance

1.2 Overview of strategic resource management

SRM is a philosophy and model, not a budget. It is a means to achieve the University's strategic goals, but it does not determine those goals. SRM aims to create transparency and clarity in the resource allocation process, and it is most effectively applied in an atmosphere of shared commitment and engagement from the campus community.
 
SRM is expected to provide an incentive-based and transparent resource allocation system that is linked to the University's strategic plan, helps to decentralize decision-making, and aligns resources and accountability to University units. 

1.3 History of strategic resource management at the University

In April 2018, President Edward Montgomery announced plans to explore an SRM model for the University. A Strategic Direction and Steering Committee (“SDSC”), consisting of the president, vice presidents, chief of staff and director of athletics was established. This group’s charge was to provide strategic direction, funding and incentives for this effort. In addition, the provost, vice president for student affairs and the vice president for business and finance were named SRM champions. 

The project's core team was established and consisted of:

• Chris Cheatham, vice provost for budget and personnel, Academic Affairs

• Nicole Kalmbach, director of business operations, Division of Student Affairs

• Colleen Scarff, associate vice president for business, Office of Business and Finance

• Peter Dams, project manager, Dams & Associates, Inc.

The core team managed the project and developed the approved budget model, acting as the conduit for work group communications to the SDSC.

Five work groups were established:

• Revenue Allocation

• Cost Allocation

• Communications

• Infrastructure Support for Implementation and Training

• Training, Process Documentation and Policy

An SRM organizational chart can be found here.

Timeline for the project:

• April to August 2018: Invitation letters were sent to work group appointees, and guiding principles were adopted by the SDSC.

• September 2018 through April 2019: Work groups received their charges from the core team and developed draft recommendations on identified factors and budget technology needs. 

• May through June 2019: The SDSC reviewed recommendations and provided feedback to work groups and the core team. During this timeframe, the core team also conducted mid-process reviews to ensure all budget factors were addressed and the implementation timeline was on target. Modifications were communicated to SRM champions for approval.

• July through September 2019: The work groups finalized their recommendations to the SDSC. 

• October 2019: The SDSC reviewed and approved the final recommendations.

• November 2019 through June 2020: The core team modeled the new budget model based on the recommendations it received. During this time, work groups began assessment of training needs and the review and updating of business policies and processes. 

• March through June 2021: Implementation activities were started, the training plan was executed, and the business process documentation was completed. 

The SRM model will be run side-by-side with the University's existing budget model during fiscal year 2020-21. The new model will be fully implemented in fiscal year 2021-22.

1.4 Western Michigan University mission, SRM vision, purpose of the project and SRM guiding principles

Western Michigan University mission statement

Western Michigan University is a learner-centered, research university, building intellectual inquiry and discovery into undergraduate, graduate, and professional programs  in a way that fosters knowledge and innovation, and transforms wisdom into action. As a public university, the University provides leadership in teaching, research, learning, and service, and is committed to enhancing the future of our global citizenry. 

Vision of SRM

In 1980, more than 70% of the University's general operating budget was funded through state appropriations. In 2020, that figure is approximately 27%. As the nation’s public universities receive less state support, they are finding it necessary not only to develop new sources of funding but to adopt new budget approaches that encourage greater academic planning by colleges, align financial resources with priorities, and are consistent with the creative and entrepreneurial activities occurring on university campuses.

Purpose of the project

• Provide a clear and comprehensive approach to resource allocation that is nimble and responsive to the University's changing needs.

• Enhance transparency through processes that are easily understood.

• Strategically align financial resources with University priorities.

• Encourage and reward innovation, revenue generation and efficiency.

• Ensure inclusive participation with wide representation across campus.

Guiding principles

The SRM initiative is guided by 14 principles intended to support behaviors, strategies and initiatives that are consistent with the mission and goals of the University's  strategic plan.

All guiding principles are valued equally unless through the course of the SRM process a hierarchy is set.

1. Accountability: Leaders in each budget unit must ensure that their budget processes and resource allocations align with SRM guiding principles and the University’s strategic plan.
2. Adaptability: The model should be adaptable to changing circumstances and regularly reviewed and revised as the University learns more about the process and outcomes.
3. Balance: There should be ongoing monitoring of the balance between incentives and control provided to colleges and the common good of the University community. Both financial and curricular considerations should be used in determining the balance.
4. Central Funds Investment: A central pool of funds should be maintained to provide supplemental support for the implementation of University strategic initiatives.
5. Collaboration: The model should encourage collaboration across the University community.
6. Communication: Constant and direct communication should occur to ensure all campus stakeholders are thoroughly informed about the new budget model elements, issues and processes.
7. Data: A robust data environment must be maintained for the new model to be implemented, administered and analyzed.
8. Full Cost: Full costs (i.e., salaries, supplies, scholarships, debt, utilities) should be aligned with revenue streams where appropriate.
9. Governance: The inclusion of shared governance and technical expertise will provide appropriate oversight of the new model.
10. Incentives: The model should provide appropriate and logical budgetary incentives to enhance revenues and to control costs.
11. Negative Outcomes: The model should anticipate and avoid negative outcomes by providing sufficient funding and agreements to support valued higher cost efforts.
12. Predictability: The model should have rules that are clear and consistently applied, resulting in predictable outcomes that enable effective planning throughout campus.
13. Simplicity: Even though the details of costs and revenues can be complex, the model itself should be simple.
14. Transparency: The model should be implemented and maintained in a clear, consistent and transparent manner.

1.5 Responsibility units

A number of areas of the University are identified as responsibility units (“RU”). By definition, RUs must generate revenues. RUs are held accountable for the effective and efficient management of their resources and for developing strategic and financial plans that align with overall academic and University plans. The SDSC has designated colleges and auxiliary units to be the primary RUs. The following areas are identified as RUs:

• College of Arts and Sciences

• College of Aviation

• Haworth College of Business

• College of Education and Human Development

• College of Engineering and Applied Sciences

• College of Fine Arts

• College of Health and Human Services

The University’s auxiliary operations already operate as RUs. The following are identified as auxiliary units and as such, RUs:

• Athletics

• Auxiliary Administrative Services

• Center for Disability Services

• Fetzer Center

• Housing, Dining Services, Bernhard Center

• Miller Auditorium

• Paper Pilot Plant

• Parking Services

• Sindecuse Health Center

• Telecommunications

• The Oaklands

• Unified Clinics

• WMU Supply Sales-Postage/Billing

• West Hills Athletic Club

1.6 Service units

By definition, service units (“SU”) do not generate revenues. The Graduate College, the Lee Honors College, University College, and WMUx generate revenue; however, they are considered SUs because these units do not have sufficient capacity to generate revenue necessary to be treated as full RUs. Other SUs are:

• Internal Audit

• Office of Institutional Equity

• Office of the General Counsel

• Office of the President

• Office of University Budgets

• Provost and Vice President for Academic Affairs

• Vice president for Business and Finance

• Vice president for Diversity and Inclusion

• Vice president for Research and Innovation

• Vice president for Government Relations

• Vice president for Marketing and Strategic Communications

• Vice president for Student Affairs

• Vice president for University Advancement