Merging Departments Improves Efficency

When you think of mergers, you probably picture two corporate giants shaking hands over a deal worth billions of dollars: Chase Manhattan and Chemical Bank, for example, or Viacom and CBS.

But most mergers take place on a much smaller scale: Between cross-town rivals, within one company in the form of a reorganization or even—if you haven't guessed by now—involving an in-plant.

As an in-plant manager, you may have the chance to do a little consolidation of your own, either merging with or taking over other departments within the organization. But this brings up several considerations:

• Can your parent organization really benefit from this move?
• How do such mergers affect employees and customers?
• And how can in-plant managers initiate a merger on their own?

According to Jerry McCartney, associate dean and chief information officer of the Wharton School at the University of Pennsylvania, merging the in-plant with other departments lets the organization better synchronize existing technologies—and lets the in-plant benefit from more sources of revenue. Eight years ago, Wharton's academic computing department became responsible for reprographics. When McCartney joined the university six and a half years ago, the department's responsibilities grew to encompass all computing functions.

Getting Maximum Value

"If you think of a copy center as a high-volume print shop, there are clear implications for the integration of those products into an overall networking solution," says McCartney. "We've been able to leverage the school's significant investment in technology so we get maximum value from the print shop. We're also able to pick up work from other parts of the university electronically."

For Jim Muchler, director of administrative services at Bucknell University, in Lewisburg, Pa., taking over computer systems printing—a task previously handled by information services—allowed for a better utilization of equipment, a smoother workflow and clear budget savings.

"Much of what we generate gets processed further in the form of mailing. And printing in the same department that does the mailing means that the workflow is smoother," he says. "And because it's being printed and mailed out of the same building, the result is a significant reduction in costs." Since administrative services can electronically generate the forms and their data at the same time, eliminating the need to stockpile preprinted forms and data packs, costs are reduced even more.

Eight years ago, AFLAC, an insurance company in Columbus, Ga., decided to roll the printing, inbound mail and outbound mail departments into one and to print only materials that are destined to be mailed. All other forms of communication are stored electronically—even incoming mail. Vice President of Support Services Harley McIntire says AFLAC's departmental reorganization has resulted in less waste.

"I eliminate waste in the form of obsolescence, and I also eliminate customer back order situations," says McIntire. "There's also very little end-user waste because they don't find themselves ordering and stocking huge quantities only to see it become obsolete on their shelves. They know that if they place an order, they'll see it in the next couple of days, so they don't hoard those materials."

Worker Woes

A consolidation of departments may make sense for the organization and the in-plant—but how can you alleviate the employee resentment that may arise when their jobs suddenly change? McIntire believes that showing employees how their value to the company will increase helps them make the transition.

"People are sometimes afraid of change, but if you can show them that change is both positive and necessary, then they jump in," he says.

Another suggestion is to make sure the merging groups identify with one another. For example, the Wharton School in-plant recently held a reception at its new remote reprographics facility to honor staff members with exceptional performance.

"We invited all the computing people to come along and have a look at it," McCartney relates. "They're interested in the technology solutions that are in place in the print shop."

Muchler relied on an old standby: money. "I told them we had a new opportunity to generate revenue," he says. He also explained to his employees that the workload would not be increasing greatly. "My assessment was that it was a not a huge workload," he says. "We were averaging 900,000 clicks per month on the DocuTech. Adding these new responsibilities made it go to 950,000." These assurances helped the employees adjust to the change.

Charging For Services

Chances are that an in-plant merger will change how printing services are charged within the organization, and clients may not understand why they now have to pay for services that used to be free to them.

"It's easy for a department to get the perception that printing on an in-house device is free because they're not charged directly for it," says McIntire. When this happens, the department will often print materials on a less-than-economical platform.

AFLAC dealt with this situation by creating an internal subsidiary called Communicorp. McIntire and his employees are AFLAC employees, but they report to the president of Communicorp, who is also a senior vice president of AFLAC.

"We don't have those troubles about the perception of value of whether something is printed in-house or externally because the reporting structure changes all that," says McIntire.

There are now service charges on some internal services that were previously free. "It's really an awareness charge," says McIntire. "We're showing a department what a project they previously perceived to be free is actually costing the corporation." By making everyone aware of these costs, McIntire can justify why a given project will be printed on a given platform—one more economical than what was used in the past. "There was quite a bit of agitation with the heavy users when we made that transition, but we're well past that now," he says.

Muchler used a different approach. "Printing with the computer center was previously free. If we anticipated one Achilles heel, that was going to be it," he says. Since information services would no longer be responsible for printing, it took its printing budget and distributed it among the departments of the university based on their printing load from the previous year.

"We sent the departments a letter saying that the computer center won't be budgeting for printing costs next year, so when you build your budget, you'll need to accommodate the expected cost of your printing," Muchler explains.

In any case, managers who have been through all this agree that disgruntled clients will likely experience an about-face when they see how services improve after the merger. "We've taken a dramatic step towards improving the service levels they've come to expect," says McIntire. "Now they get turnaround times of 24 hours that had previously been two weeks."

Broadening Your Horizons

Taking on additional responsibilities is a smart career move for the in-plant manager, according to McCartney. "My sense is that if you're not going forward, you're actually going backward, even if you don't realize it. If you're stuck in a particular vertical track, it's easy to get pigeonholed. You have to keep moving forward," he says.

Just keep in mind that you're not a Fortune 500 CEO planning a hostile takeover. "If I'm trying to assume responsibility for another department and the intent of that action is to improve my position with the company, I can almost guarantee that that's going to be short-sighted and mistaken," insists McIntire. "The motivation is unsound and the move itself is ill-advised." McIntire instead suggests that the in-plant manager look for and suggest opportunities to eliminate unnecessary redundancy within the organization.

Muchler has a simple formula for in-plant managers looking to broaden their horizons: "Go out and find work you can do more efficiently that benefits the university, reduces costs and improves service, then put a proposal together and send it off to your boss." As long as you're working towards the best interests of the organization, the action will benefit you both.