Rodney A. Erickson Remarks
Presentation to the Board of Trustees
Second-Year Progress Report, Priorities for Excellence
May 13, 2011
Good morning. I'm pleased to update you on the status of the University's 5-year strategic plan which the Board adopted in May 2009. The continuing challenge for Penn State and for our peers is to find ways to enhance student success and fulfill the rest of the University's mission while operating within increasingly tight financial constraints.
Slide 2 Recap of Strategic Planning Goals
You'll recall that there are seven overarching goals in the Strategic Plan. The goals begin with student success, build around academic excellence and our Land Grant mission, and conclude with strategies for further operating efficiencies.
Slide 3 Strategy Implementation Matrix
The Plan includes a Strategy Implementation Matrix that identifies the administrator or group responsible for each of the 38 strategies, and also a start date, selected performance measures, and a general indication of the fiscal impacts.
Slide 4 OPIA Progress and Performance Webpage
I will touch briefly on some highlights of implementation today, but more information can be found on the Office of Planning and Institutional Assessment's website.
Slide 5 Goal 1: Enhance Student Success
Within Goal 1, we have focused on the student experience.
Strategy 1.1: Enhance Student Success
Most programs now have formally stated learning outcomes and the University Assessment Coordination Committee is leading this effort;
The Office of Undergraduate Education is also working with the Faculty Senate to identify learning outcome measures for high-enrollment courses in the General Education curriculum.
Strategy 1.2: Expand and Promote Opportunities for Students to Engage in Research and Active Learning
This has been a banner year for undergraduate research. In addition to growth in the Undergraduate Research Exhibition, there was growth in other venues where students showcase their work, and in applications for centrally supported Summer Discovery Grants.
Strategy 1.3: Improve Key Student Transition Experiences
We have piloted the new LINK UP and college orientation programs to improve students' transition into their majors and their change of campus assignment as well as a summer bridge program (iLEAP) for new international students
Slide 6 Goal 1: Enhance Student Success (continued)
Strategy 1.4: Encourage Better Advising and Student Ownership of Education
A key focus for advising and for the University Advising Council has been on early intervention for students encountering academic challenges. The online Early Progress Report completed by faculty is providing an increasingly important mechanism for notifying students' advisers and identifying areas of difficulty.
Strategy 1.6: Assist Students to Explore Ethical Issues in their Professional and Personal Lives
Many more college and campus programs now have required ethics courses at both the undergraduate and graduate levels.
Slide 7 Goal 2: Advance Academic Excellence and Research Prominence
Goal 2 focuses on advancing academic excellence.
Strategy 2.1: Focus on Faculty Recruitment and Retention for Excellence (From June 2010 report)
Fewer faculty were recruited in 2009-10 due to the economic challenges facing the University, but the largely replacement hiring we did was highly successful, including for special interdisciplinary clusters such as genomics and infectious diseases.
Strategy 2.2: Foster Research, Instruction, and Outreach in Emerging, Interdisciplinary Fields of Great Societal Importance
Led by Vice President Foley and our academic deans, we have worked to boost interdisciplinary research.
I've previously shared with you the outstanding rankings of most Penn State doctoral programs in the recent National Research Council report; many of these highly ranked programs are in interdisciplinary fields such as plant sciences.
Next fall we will launch a new minor in Entrepreneurship to encourage students' creative ventures.
Strategy 2.3: Enhance the College of Medicine's Research and Clinical Capabilities in Central Pennsylvania (From June 2010 report)
Dr. Paz will brief the Board this afternoon, but I can report that we are experiencing growth in the size and scope of our Hershey clinical enterprise including the regional medical campus in State College and the construction of the new Children's Hospital
Meanwhile, the volume of joint research grants involving Hershey and University Park faculty has grown significantly and now totals over $20 million.
Slide 8 Goal 2: Advance Academic Excellence and Research Prominence, continued
Strategy 2.4: Consolidate Academic and Administrative Programs through Targeted Reviews
I'll talk in a few minutes about Strategy 2.4 since this has been one of the highest priorities and most public parts of the Strategic Planning process.
Strategy 2.5: Acquire Additional Endowments to Enhance Faculty and Student Quality
We are making excellent progress with our fundraising campaign, For the Future , which has student scholarships and faculty endowments as top priorities.
Slide 9 Goal 3: Realize Penn State's Potential as a Global University
Goal 3 is about realizing the vision of Global Penn State. Progress toward this goal was the topic of discussion at this morning's Educational Policy Committee meeting, and Trustee Joyner will provide a fuller report this afternoon.
Strategy 3.1: Establish the Office of Global Programs as the Locus of the University's International Strategy
We have now established the Office of Global Programs as the focal unit providing central coordination of all of Penn State's major international activities.
Strategy 3.2: Build International Partnerships at Home and Abroad
Strategy 3.3: Expand Opportunities for Education Abroad and International Visiting Scholars
Slide 10 Goal 3: Realize Penn State's Potential as a Global University, continued
Strategy 3.4: Infuse International Topics and Experiences into Instruction
Strategy 3.5: Increase International Student Enrollments
Increasing the diversity of our student body is an important strategy, and we have made good progress. Enrollment of international undergraduates has increased from 1,553 in Fall 2008 to 2,558 just two years later.
Slide 11 Goal 4: Maintain Access/Affordability and Enhance Diversity
Goal 4 recognizes the important role that Penn State plays in providing access to higher education across the Commonwealth.
Strategy 4.1: Position the Commonwealth Campuses for Access and Affordability
With the expanding tuition differential between the Commonwealth Campuses and University Park, we are seeing an increase in the number of applicants selecting a Commonwealth Campus as their first choice.
The 2+2 mission will continue to be important to the strength of our campuses, but we expect baccalaureate enrollments to continue growing at the campuses.
Strategy 4.2: Invest Selectively in Capital Improvements and Student Services at the Campuses
A team charged by the President to evaluate the potential for expanded student housing at selected Commonwealth Campuses has recently presented recommendations that we are considering.
Strategy 4.3: Allocate Additional Funds from Tuition for Need-Based Student Aid
We continue to budget additional recurring funds for student aid, now totaling $40.5 million, even in difficult financial times.
Slide 12 Goal 4: Maintain Access/Affordability and Enhance Diversity, continued
Strategy 4.4: Sustain Investment in For the Future: The Campaign for Penn State Students
$55 million of the $257 million in private philanthropy raised so far this academic year has been in support of undergraduate scholarships. During the course of the campaign, $80 million has been raised for Trustee Matching Scholarships to support academically strong students with financial need.
Strategy 4.5: Build on the Framework to Foster Diversity
Penn State is a nationally recognized leader in diversity strategic planning. We are now in the 3rd 5-year cycle of diversity reviews and identification of best practices.
Slide 13 Goal 5: Serve the People of the Commonwealth and Beyond
Goal 5 is focused on public service, especially for the Commonwealth.
Strategy 5.1: Deliver More Penn State Programming Using Technology and Media
We are delivering much more Penn State programming using new media.
Strategy 5.2: Consolidate Specialized Services at Regional and Campus Sites
And focusing program delivery regionally and at our Commonwealth Campuses, wherever possible.
Strategy 5.3: Share Programs, Faculty, Staff, and Facilities within Regions
There are an increasing number of campuses now sharing faculty and support staff to offer joint academic programs and to spread expertise and services while reducing operating costs.
Slide 14 Goal 5: Serve the People of the Commonwealth and Beyond, continued
Strategy 5.4: Re-mission Some Campuses, if Necessary
Campus enrollments have held up very well in recent years, even at campuses in western Pennsylvania, as the number of high school graduates has declined. However, we will continue to keep a close eye on campus viability.
Strategy 5.5: Create a More Entrepreneurial Approach to Service Delivery
Slide 15 Goal 6: Use Technology to Expand Access and Opportunities
One of the larger tasks within Goal 6 is to investigate opportunities for cost savings and productivity improvements through and for technology.
Strategy 6.1: Expand the World Campus and Other Online Educational Offerings
A task force has completed work on a new revenue sharing model to ensure adequate incentives to the academic units, to provide for investments to scale the World Campus to the next level of growth, and to provide support for the necessary services for the increasing number of students
Strategy 6.2: Invest in Robust/Flexible IT Infrastructure for Teaching, Research and Administration
An external consultant has made recommendations that are now under review for replacing the antiquated student information and payroll systems
Slide 16 Goal 6: Use Technology to Expand Access and Opportunities
Strategy 6.3: Re-Balance Centralized/Dispersed Facilities/Services for Greater Efficiency and Effectiveness
And, an external consultant is assessing the University's IT environment with the goal of reducing overlap and re-balancing service delivery to provide the greatest efficiency and access
Strategy 6.4: Protect the Security and Integrity of the IT Infrastructure
We have made new investments in IT Disaster Recovery, Identity and Access Management, and have made great progress in regularly scanning for Personally Identifiable information (PII) on our network.
Slide 17 Goal 7: Control Costs and Generate Additional Efficiencies
Goal 7 continues our tradition of seeking ways to operate even more efficiently and is closely related to the work of the Core Council.
Strategy 7.1: Improve Instructional Productivity
All academic colleges and campuses now have formal instructional workload policies and are working to reduce the number of under-enrolled sections. We are making significant progress in improving productivity and I appreciate the cooperation we have had from our faculty.
With the help of the Faculty Senate, we have eliminated over 600 infrequently taught undergraduate courses. The Graduate Council is working on a similar process.
Strategy 7.2: Better Utilize Instructional and Research Facilities
Our new scheduling policies and a new scheduling system will expand the number of courses offered outside of prime hours and provide greater central control over scheduling
We are developing a better inventory of specialized research equipment to maximize their utilization in core facilities
Strategy 7.3: Reduce the Rate of Increase in Health Care Costs
We have introduced changes to deductibles and co-pays to encourage in-network health care, and are encouraging greater participation in wellness programs
We continue to enhance our healthcare partnerships with Highmark, the Hershey Medical Center, and the Mt. Nittany Medical Center
Effective last January, new employees have a defined contribution plan rather than a defined benefit plan for health care into retirement
Strategy 7.4: Develop Frameworks for Greater Budgeting and Staffing Flexibility
Effective this July 1 st , all academic and administrative units will be required to cover the benefits costs for all net new hires, which will put additional discipline into decisions to add personnel.
And, we are encouraging the use of less-than-full-time and less-than-full-year staff appointments
Slide 18 Goal 7: Control Costs and Generate Additional Efficiencies, continued
Strategy 7.5: Modify Central Recycling and Introduce Investment Models for New Initiatives
Our approach is to move toward more vertical budget cutting identified through the Core Council and similar processes, which I'll talk about shortly
Strategy 7.6: Cap University Allocations to Outreach Beginning 2010-11
The University's contribution to Outreach programming has now been capped at the 2009-10 level.
Units within Outreach that are not involved in the delivery of credit programming have been moved to a self-supporting, auxiliary budget model.
Strategy 7.7: Promote Continuous Quality Improvement and Reward Innovation
Strategy 7.8: Establish and Foster Sustainable Environments
We are now focusing our sustainability education programming through the Center for Sustainability
Vice President Horvath and I have recently appointed a University Sustainability Council and charged them to develop a strategic plan for greater sustainability by the end of the calendar year
And our Office of Physical Plant has a number of new initiatives underway, including audits for energy savings, recycling, and converting the power plant from coal to natural gas
Slide 19 Penn State After Two Decades of Strategic Planning
Penn State is a very different university after two decades of strategic planning. Before I report on the activities of the Core Council, I would like to reflect back very briefly on the results of 20 years of strategic planning.
Slide 20 Two Decades of Budget Reductions and Reallocations (1992-93 through 2010-11)
From 1992-93 through 2010-11, Penn State has centrally recycled and reallocated more than $203 million. Individual units have internally recycled tens of millions of dollars as well to fund their new strategic initiatives.
Recycling forces unit leaders to evaluate programs and activities and to curtail those that are of less strategic importance. The reallocation process is difficult and becoming more so each year as we cut deeper and deeper into some areas in order to sustain others.
This Board has approved numerous academic programs for restructuring, elimination or merger over the past two decades, including the elimination of the Institute for Public Administration and the Department of Energy and Mineral Economics, the merger of Management Information Systems with Business Logistics, Computer Science with Computer Engineering, Nuclear Engineering with Mechanical Engineering, American Studies with English, and many other program changes.
Slide 21 Enrollment Increases, Fall 2001 to Fall 2010
While we've been focused on reallocations and cost savings over the past two decades, Penn State's enrollment has grown substantially. Between Fall 2001 and Fall 2010, headcount enrollment at University Park, our 19 Commonwealth Campuses, and online enrollment in the World Campus has increased by more than 14,000 students or 19 percent; full-time equivalent enrollments at the Commonwealth Campuses have increased by more than 12 percent in the past six years.
Slide 22 Focus on Core Academics
As I mentioned earlier, budget recycling and reallocations are focused on strengthening the core academic enterprise. As enrollments have grown, we would expect an increase in the number of faculty and staff needed to instruct, advise, and support these students.
A review of the number of employees in Fall 2001 and Fall 2010 who are supported by the Education and General budget for University Park, the Commonwealth Campuses, and the World Campus confirms that the vast majority of the allocations for new employees have gone to the academic units.
The number of full-time employees budgeted in these E&G-supported units went from 10,212 in Fall 2001 to 11,527 in Fall 2010, an increase of 1,315 employees or 12.9 percent.
Eighty-six percent of this increase occurred in the academic and academic support units. Only 182 employees were added in administrative support units, where the largest increase was in University Development as Penn State staffed up for the current fundraising campaign .
Slide 23 Update on Academic Program and Administrative Services Review Core Council
I'd now like to focus on the work of the Academic Program and Administrative Services Review Core Council, which was charged by President Spanier under Strategy 2.4 in late 2009. Our task has been to review units across the University with the goal of finding resources that would help to reduce tuition increases and provide funds for some limited new strategic investments.
Slide 24 Review Coordinating Committees
The Core Council works closely with three committees whose assessments feed into the work of the Core Council. The coordinating committees, like the Core Council, include a broad cross section of administrators and faculty.
The Core Council is considering both longer-term savings as well as short-term cuts. We are also considering how cost savings in one unit may impact other units. Overall, we were tasked with finding $10 million in cost savings and/or revenue enhancements, with the idea that even more savings would be highly desirable. We will meet our $10 million goal, and likely more. The bulk of the savings will come out of operating and administrative changes rather than the academic enterprise.
To date, all University Park deans and most academic support unit executives have received recommendations from the Core Council that have been reviewed by President Spanier as well. I've provided you with copies of two such communications, to the College of Education and the College of Agricultural Sciences; these should give you a good idea of the comprehensiveness of the reviews. We expect to communicate with the campus chancellors within the next few weeks concerning both broader Commonwealth Campus issues and specific campus recommendations.
Slide 25 Status of Academic Program Review and Actions by Colleges
Looking just at changes in academic programs at University Park for a moment, we've asked the colleges to make difficult decisions to close or merge specific degree programs as well as some departments.
Recommendations were based on many factors, including enrollments as a reflection of student demand, degrees awarded, faculty productivity, cost per student credit hour generated, and centrality to the core academic mission.
Some programs that are not thriving, but deemed highly important by the colleges, have been placed on a watch list for possible future actions.
Slide 26 Opportunities for Cost Savings
In addition to the majors and minors recommended for elimination or consolidation, other areas frequently noted in the Core Council memos include:
Reductions in the number of under-enrolled sections and low-enrollment special topics courses
Areas identified for sharing infrastructure and service provision across colleges and other units
The redeployment of faculty lines and faculty effort to areas of higher student demand
A reduction of graduate student numbers in some fields.
Slide 27 Opportunities for Cost Savings Commonwealth Campuses
Recommendations for the Commonwealth Campuses will include consolidating or phasing out associate degrees for which demand is low as well as eliminating some underperforming baccalaureate degrees. We are also making recommendations for a few new majors that we believe will have strong appeal to students, for facilitating change of assignment to campuses other than University Park for students to complete a popular major of their choice, and for additional articulation agreements with the 14 community colleges.
The Core Council is also recommending a significant reduction in the number of developmental courses taught at the campuses in math and English through better student advising and online learning systems for assessment and more tailored teaching approaches.
As a routine matter and within their own limits, campuses must adjust their faculty and staffing levels based on enrollment changes. Finding opportunities to adjust these levels and finding new ways to collaborate is being approached with recommendations for faculty and staff sharing within geographic clusters where our campuses are located.
We will also re-calibrate base support for campuses with altered missions.
Slide 28 Opportunities for Cost Savings Academic and Administrative Services
We have made or recommended many important changes to operating and administrative practices that will save funds:
We will continue to incorporate more consumer-driven principles in health care provision, disease management, and wellness programming.
We have eliminated a tuition benefit previously available to employees at Commonwealth Campuses to attend other universities.
Slide 29 Opportunities for Cost Savings Academic and Administrative Services (continued)
Additional areas in Finance and Business that are targeted for savings include:
Operating efficiencies in the Office of Physical Plant
Additional energy savings initiatives
Strategic procurement opportunities resulting in lower costs
Additional central overhead recovery from auxiliary enterprises
Streamlining travel services
Slide 30 Opportunities for Revenue Enhancement
The Core Council has also been looking for ways to enhance revenue:
There is growing interest in programs in which students are able to complete both a baccalaureate degree and a master's degree in five years; the MACC or Master's in Accounting, which meets the new professional standard, is a good example.
The World Campus is our major enrollment growth area. Professional Master's degrees, along with professionally oriented undergraduate degrees, are the fastest growing markets in online education, and the Core Council is pushing colleges and campuses to move expeditiously to develop programs responsive to these demands.
A new budget model to revitalize Summer Session is being implemented this spring. The new model encourages colleges to take a more student-demand oriented approach to the scheduling and delivery of summer courses and should provide increased revenue and better resource utilization.
And, we recommended that Cooperative Extension develop a pricing model for some programs and services to help offset delivery costs.
Slide 31 Next Steps
One important next step is to identify the optimal balance and distribution of core services, such as Human Resources, Continuing Education, Career Services, and Information Technology. Study and discussion of these issues will continue into the summer and early fall when we hope to wrap up the work of the Core Council.
Slide 32 Next Steps (continued)
We have now completed the first two years of the five-year strategic plan. The Core Council will continue sharing its recommendations, getting feedback, providing feedback, and pushing to implement changes. Some changes will require Faculty Senate actions and some will require Board actions.
Next year, we will add the third-year strategies. And, just as for earlier plans, we have identified a set of performance indicators to track the University's progress toward our goals. We will publish our performance data at the URL shown here.
Slide 33 Summary (Photo of Old Main)
I believe we've made good progress with Year 2 strategies. And Core Council members have carefully considered many ideas and options. Most of our cost savings are coming from administration and operations rather than core academics, and that's music to my provost ears.
I can also report that we have received excellent cooperation from the units in discussing and planning to implement Core Council recommendations.
And now, I'd be happy to take your questions as time remains.
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Web page last modified September 30, 2011