Here is the latest, Thorp's message dated February 12, 2009:  http://www.unc.edu/chan/chancellors/thorp_holden/090212-budget.php, and reproduced below. The study is to be conducted by "Bain & Company, a global business consulting firm" and "The UNC-Chapel Hill Foundation is funding the study, which is made possible through a restricted gift from a Carolina alumnus."

Some interesting research questions come up.  Can we know  how much this study is costing, who really funded it, and  its particulars (e.g. can we see a copy of the proposal the firm wrote to get this job, and the contract with them?  Is this all a matter of public record, and should people try to see it?  One can infer from use of the word "restricted" that we may never know who is behind it. Should we?

 Some research on Bain and Company is called for.  Their website is here:  http://www.bain.com/bainweb/home.asp.  No  work with universities shows up there. Their website touts clients and includes a statement from one of them, DeBeers .  Here is an interesting article about the work Bain did for DeBeers:  http://www.jckonline.com/article/CA302634.html, which includes "In 1998, soon after current chairman Nicky Oppenheimer took over the company, De Beers enlisted Boston-based consultant Bain and Company for a "strategic review." (Some critics of the new direction say De Beers has been "Bain-washed.") The review was intended to boost De Beers' languishing share price, although that goal became moot in 2001 when De Beers went private. But it quickly turned into an exercise in corporate soul-searching meant to chart the future."  The upshot is that Bain focused DeBeers on the demand side of diamonds.  How that panned out is another question.  (This article is from 2003, so presumably that could be learned.)  It's not clear if there is need to increase UNC's brand recognition, nor that whether greater demand for UNC is necessarily something Bain will look at.

 One can't help but wonder just what Bain and Company will do.  They compete with McKinsey and other business consultants.  To really get a handle on this, again, we need to understand what's going on here, right from the start.  Let's learn the budget and see the proposal and contract, and get this out in the open right away.  This could be another PR problem for UNC, and could lead to a lot of consternation and inefficiencies, if the process is not fully open.  The Heisenberg Uncertainty Principal (http://en.wikipedia.org/wiki/Uncertainty_principle) comes to mind.  No doubt Holden Thorpe could derive it from first principals.  In essence, in attempting to measure UNC, UNC may be changed in ways that decrease the accuracy of the measurement. But it depends upon what is really going on here, its size and scope, etc.

Message to Students, Faculty and Staff: University Budget Update

Dear Students, Faculty and Staff:

I’m writing again to share updates about the University’s budget. You all know that we face serious budget cuts. The decisions that we make during tough times like these are going to be more important than any we might make when times are good. It would be easy for us to fall into the trap of hunkering down, making cuts across the board and just trying to survive. But the great institutions – the ones that will emerge from this economic crisis even stronger – will be those that are willing to look hard at what they do and then make really smart decisions. I intend for Carolina to be one of those great institutions.

That means we’ve got to be strategic and look critically at everything we do. We owe it to ourselves, and we owe it to the Legislature and people of North Carolina. We have an obligation to do our part in these tough economic times.

So far in this budget crisis, we have asked the vice chancellors and deans to look within their units to identify the cuts that we need to make. But what we haven’t done is take a good look at ourselves from the cross-University perspective to see if there are ways to improve operations and reduce costs.

To do that, Bain & Company, a global business consulting firm, has been asked to conduct a study to help us identify innovative ways to streamline operations, become more effective, and perhaps achieve additional cost savings. The UNC-Chapel Hill Foundation is funding the study, which is made possible through a restricted gift from a Carolina alumnus.

I see this study as a great opportunity to bring in outside experts who can take an objective look at how the University currently operates to meet our campus-wide goals and to fulfill our mission to educate students and serve the people of North Carolina and beyond.

In my regular e-mail updates to the campus about the budget, lots of employees have written back with suggestions about how to improve and cut costs at the same time. Some of those ideas have to do with energy savings, sustainable practices, personnel, purchasing and procurement, technology and facilities.

There is always room for improvement in any operation. And we always have an obligation to try and be better in all that we do to best serve the taxpayers of North Carolina.

The goal of the study, which will be conducted this spring, is to provide the University with potential strategies for operational improvements and enhancements to the intensive planning we already have under way. The Bain study will give us one more tool to make smart decisions about Carolina’s future.

I wanted you to have a larger context for where we’re headed before sharing the latest developments about what happens next with the state budget picture. Last week, UNC General Administration sent the State Budget Director a memo detailing potential 2009-2011 budget reductions for the UNC system. This information reflected our input that I told you about last month – planning scenarios requested by President Bowles for reductions of 3 percent, 5 percent and 7 percent of our state funding. I also shared some numbers about the possible losses of faculty, teaching and staff positions from those contingency plans, our best estimates of the potential impact.

The General Administration memo also highlighted another UNC-Chapel Hill projection as part of a system-wide list showing the effects of a state cut at the 7 percent level. If we keep the current student-faculty ratio to maintain quality, the loss of about 230 faculty and teaching positions would warrant an enrollment reduction of more than 3,400 students – roughly the size of our incoming first-year class. The memo emphasized President Bowles’ plans to make the best possible case with the State Budget Office, Governor Perdue and the General Assembly that permanent cuts next year would be the equivalent of sacrificing North Carolina’s future. I wanted you to know that President Bowles and his staff, along with the Board of Governors, are advocating admirably on behalf of all the UNC campuses.

I continue to be impressed by the positive, but realistic approach that our community has taken with these budget issues. I’ll keep sharing timely information with you. Regarding our current budget year, the next steps will depend on what happens in Washington with the federal stimulus package, as well as how state tax return revenues are running in April. We’re doing all we can right now to be prepared.

Finally, if you’re interested in reading the General Administration memo mentioned above, along with my previous budget messages and related background, refer to a new link, “Carolina Budget Update,” on the University’s homepage, www.unc.edu. And keep sending any creative cost-cutting suggestions to budgetideas@unc.edu. On behalf of the vice chancellors, I want to thank everyone who has taken the time to share their ideas.

Sincerely,

Holden Thorp