Following several weeks of faculty and staff outcry against the centralization of human-resource and finance personnel, University President Mary Sue Coleman said Wednesday the shared services implementation will continue after the delay.

Proposed by University administrators, Administrative Services Transformation is part of a larger effort to promote cost-containment at the University. AST, one of the aspects of the initiative, would consolidate nearly 300 departmental employees to a location off of State Street near the University’s Wolverine Tower, a move estimated to save $5 to $6 million per year.

In the wake of receiving 1,200-signature-strong petition, University administrators announced they will delay the center’s implementation until after April 2014 to better fit the needs of faculty and staff.

In the statement released early Wednesday, Coleman wrote that University administrators will continue to meet with faculty across campus to better understand and determine better approaches to the controversial initiative.

In an interview Wednesday, Coleman said the University must cut costs in light of decreased state support for public higher education.

“While we’re hoping for an increase in state support — and I’m working as hard as I can on that — we have to be realistic,” Coleman said. “And we also have to be cognizant of the fact that the cost of higher education is something of tremendous concern in this country. And we would be irresponsible if we didn’t try to deal with that. We are going to move forward, pause, and listen, and make sure we do it right.”

In the statement, Coleman wrote that the issue of cost-containment is a national concern that must be addressed to uphold the University’s reputation and academic mission.

“This has been a very challenging time on our campus, as we grapple with enormous changes in higher education and our need to keep costs as low as possible,” Coleman wrote. “We are not immune to the many pressures facing higher education today.”

To adapt to the financial challenges facing higher education in part due to declining state appropriation, the University has implemented cost-containment strategies throughout the past few years by evaluating expenditures to translate to better financial performance. Coleman said the University has cut $265 million in recurring expenses from the general fund budget over the past decade.

Students, faculty and staff voiced concerns over the program Monday at the Senate Assembly meeting, at a special forum for LSA professors and faculty and at a protest organized by the Student Union for Michigan.

Protesters delivered a letter to Rowan Miranda, associate vice president for finance. Miranda is one of the administrators involved in the shared services center’s creation and has received backlash from faculty for his previous relationship with Accenture, the consulting firm contracted to design and assist in the initiative’s implementation.

At the two meetings, faculty members discussed ways to include more participation in the planning of the center.

However, the student union protesters hoped to halt the initiative as a whole.

The University’s contract with Accenture, worth $11.7 million, has also been criticized by faculty, with concerns focused on Miranda’s former employment as the head of Accenture’s higher education portfolio.

On Wednesday, Coleman said working with a consulting firm was necessary to move forward on the shared services initiative.

“Sometimes we need arms and legs from consulting firms,” Coleman said. “You know, that’s the way it is. I think we are in another phase now, so that perhaps we can do more of the work internally. We’ll balance it as we need to balance it.”

In her statement, Coleman wrote that AST “must and will continue” after considering the concerns raised by faculty and staff.

“The question for me is not whether the University will mount a shared-services program, but how to do so in a way that best meets the needs of the Michigan community,” Coleman wrote.

In an interview Tuesday, University Provost Martha Pollack echoed Coleman’s statements about the future of initiative. Pollack has met with department chairs and deans to discuss the issues at hand, and plans on speaking to them throughout the rest of the initiative’s planning process.

“Change is tough, it’s difficult, I understand that,” Coleman said in the interview. “But this is something we need to move forward on.”

— Daily Staff Reporter Yardain Amron contributed to this report.

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