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Case Study

Cost Containment at Delta State University

Times are tough. State revenues are down. Businesses are suffering. Families are uncertain about savings, mortgages, and even jobs. For these reasons--more than ever--higher education must be vigilant about cost containment.

At Delta State University, cost containment is serious business. Not only must we cope with cutbacks in state appropriations, but we must also be certain the educational opportunities we offer are affordable for the students we serve. To this end, we have taken a campus-wide approach to reducing costs wherever possible. Following are a few of the steps we've taken to manage the university as efficiently as possible.

Let's start with energy savings. We've done pretty well over the past couple of years with targeted strategies. Delta State uses 23 percent less natural gas and 10 percent less electricity today than we did two years ago. From 2007 to 2008 we reduced annual expenditures for energy by $325,000. We continue to reduce our usage this year, but the dollar savings are slightly less dramatic because of price increases in fuel.

How have we done it? It started with our facilities management team. They installed new control systems and revised schedules for heating and cooling. They converted to energy efficient light fixtures. As a result, they haven't purchased incandescent bulbs in more than a year.

We also installed new windows as part of our campaign to cut costs. And the team closely monitors all electric motors so they run only when necessary. Buildings that will be unused during vacation periods are closed to save on energy costs. We are especially proud because our teams in facilities management recently won a much-deserved award for their efforts in energy conservation from the Mississippi Development Authority.

We try to engage the entire campus community in our energy saving efforts as well. We regularly encourage people to turn off lights and shut down their office technology appliances before they head for home. This campus-wide participation, fostered by much communication about the costs and potential savings of reduced energy usage, has helped further our cost containment efforts. Delta State's faculty and staff have become quite aware that each dollar we save makes a difference.

Our next big project in support of our efforts to reduce costs is the construction of a new central chiller plant that will allow us to take eight older, less efficient chillers out of service. (A chiller is an air conditioning mechanism that uses water to help "chill" the air.) Even the campus police are contributing by using bicycles and four-wheel ATVs rather than riding in cruisers.

We are also reducing costs in the area of information technology. Our onsite IT staff from SunGard Higher Education have led initiatives to engineer savings. For example, technology staff have consolidated servers, reducing the number of servers from 35 to five. They automatically shut down computer labs at 11 p.m. each night. By turning off more than 200 computers in these labs, we are saving up to $30 per machine per year.

We installed a broadly available, secure wireless network that saves 75 percent over our traditional switching infrastructure. We also upgraded our core network and installed traffic shaping software, which is providing us with an estimated $200,000 in cost avoidance.

Our IT team also installed new filters to eliminate the flood of SPAM e-mail that clogged inboxes and slowed down performance. SPAM represents 89 percent of the 46,000 e-mails arriving on the campus daily. By working to eliminate SPAM, we are saving time for all our end users, as well as our IT staff.

Altogether the information technology cost containment strategies for fiscal year 2008 yielded an estimated $688,000 in savings. These are real savings that will allow us to forego budget allocations in the future or to add beneficial technology services immediately that otherwise would have been postponed until more dollars were available.

We are also applying cost containment strategies in our business operations. Outsourcing credit card payments saves us $51,000 per year in fees to card companies. E-mailing students their billing statements versus using the postal service saves the institution about $10,000 annually. An efficient and all-electronic procurement system saves Delta State thousands of dollars in personnel time and supplies. And our foundation office uses barcoding technology to process mailings and pledges, thereby cutting staff time on most projects from hours to minutes.

In addition to cutting costs, we are attempting to build revenue. To that end, we have developed and implemented a new marketing plan designed to attract eligible students from a wider geographic area. Recruiting students and then retaining them from first enrollment through graduation is important. This is true not only because our mission is education, but also because our budget requires enrollment stability. In order to retain more students, we are redesigning some courses using a nationally successful model. We are also making some changes to the overall freshman experience so that first-time students are engaged sooner and more fully with Delta State, and thus more likely to complete their higher education with us.

Times may be tough, but we're working hard to contain costs and build revenue. By taking a campus-wide view to identify opportunities for cost savings, we have reduced costs by more than a million dollars. And our University Budget Committee continues to systematically sift through all operations, seeking additional efficiency opportunities. Providing quality and affordability in education and a better student experience has become even more challenging in today's economic climate. But by being vigilant about cost containment, institutions can make sure that limited dollars are spent on initiatives that support student success rather than on wasteful practices.

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