The University Record, September 18, 1995

VCM on track for July 1 start

By Jane R. Elgass

“VCM is real, it’s on track for implementation July 1, 1996.”

That’s the message from the three administrators in charge of the program, who noted last week that the University remains committed to full implementation of the new approach to budgeting that was formally introduced last January.

“The decision to move to VCM [value centered management] was an executive officer decision,” President James J. Duderstadt told the Record last week. “It was made as an institutional commitment involving the deans, directors and a great many others and it stays on track.”

Duderstadt notes that the new approach will allow both academic and administrative units “to participate as full partners with the central administration in making resource allocation decisions.”

“It also allows resource allocation decisions to be driven by the values, core mission and priorities of the University, rather than be dictated by external factors.”

A one-year parallel test period of the VCM model went into effect July 1, with units being held budget-neutral this year.

The development and implementation of VCM is a cooperative effort of the Office of the Provost and Executive Vice President for Academic Affairs and the Office of the Executive Vice President and Chief Financial Officer. The test period will “help ensure the success of full implementation of the program,” says Executive Vice President Farris W. Womack. “We want to make certain it is responsive to the responsibilities, challenges and opportunities facing the University.”

Womack also notes that the VCM process will make trends in resources and expenditures visible, allowing adjustments on a timely basis at both the unit and central level.

Interim Provost J. Bernard Machen echoes the emphasis Womack puts on the importance of the one-year test period.

“During the year both faculty and staff will be involved in further consultation and development of the model,” he says. “Our understanding will grow during the year and users will gain experience. We’ll work with the leaders of the units during the year to make certain we have the best form of VCM possible. We have time for adjustments to make it as good as we possibly can. This approach provides an opportunity for mastery of budgets at the unit and general level, something that will benefit the entire institution.

“While units will be responsible for both expenses and revenues, we retain a central ability to fund new initiatives and provide bridging resources. This is an exciting time of change from a system that didn’t allow for differential adjustments on a timely basis.”


Editor’s Note: Beginning with the Sept. 25 issue, the Record will carry a periodic column on questions about VCM, with answers provided by those working to implement the system. Questions are welcomed from all Record readers and should be sent to: Jane Elgass, 412 Maynard St. 1399; 747-1841; fax 764-7084; e-mail: jrelgass@umich.edu or Robert Holbrook in the Provost’s Office, Room 3080, Fleming Administration Building; 763-1282; fax 764-4546; e-mail: rsh@umich.edu.