That sentiment shifted in the 1990s when state officials began pressuring MTA to decrease spending. HR as well as finance and operations were prime candidates for cutbacks. This was in part because other alternatives, such as reducing transit services, cutting back capital projects, and slowing compensation growth, would upset customers and unions; it also stemmed from a belief that with seven operating companies, MTA could manage finance and HR more efficiently. To figure out how to do this, MTA sought input from Booz Allen Hamilton, which recommended that the agency establish a shared services operation and consolidate the agency’s HR, procurement, and finance operations. Staff expressed concern that the consultants had not created a compelling “business case” for the move. MTA therefore sought a second opinion from Accenture, which concluded that with a shared services center, MTA could eliminate 40 percent of its HR and finance staff and provide the same level of service.
With the start of the Great Recession in fall 2009, MTA saw an almost immediate $1 billion hole in its budget due to shortfalls in dedicated tax revenues. For most organizations, this would create a crisis, but for MTA, it was fortuitous and after more than a decade of planning and discussion, created a powerful impetus for change. In addition to allowing cuts to be made across the board in staffing and services, the upheaval enabled MTA’s leadership to push for the BSC to become a reality.
That sentiment shifted in the 1990s when state officials began pressuring MTA to decrease spending. HR as well as finance and operations were prime candidates for cutbacks. This was in part because other alternatives, such as reducing transit services, cutting back capital projects, and slowing compensation growth, would upset customers and unions; it also stemmed from a belief that with seven operating companies, MTA could manage finance and HR more efficiently. To figure out how to do this, MTA sought input from Booz Allen Hamilton, which recommended that the agency establish a shared services operation and consolidate the agency’s HR, procurement, and finance operations. Staff expressed concern that the consultants had not created a compelling “business case” for the move. MTA therefore sought a second opinion from Accenture, which concluded that with a shared services center, MTA could eliminate 40 percent of its HR and finance staff and provide the same level of service.
With the start of the Great Recession in fall 2009, MTA saw an almost immediate $1 billion hole in its budget due to shortfalls in dedicated tax revenues. For most organizations, this would create a crisis, but for MTA, it was fortuitous and after more than a decade of planning and discussion, created a powerful impetus for change. In addition to allowing cuts to be made across the board in staffing and services, the upheaval enabled MTA’s leadership to push for the BSC to become a reality.
From its beginning in 2009, the BSC group faced challenges. One was that before the organization was established, many operating agencies, knowing that the administrative functions that they now performed would soon be transferred to BSC, had stopped carrying out crucial tasks; as a result, as soon as BSC opened its doors, it was immediately struggling with backlogs. Also, because the agencies themselves determined which employees would move to BSC, the highest performers often remained at their home operating agencies but in different positions. This meant that the most knowledgeable and effective operators were not part of the new system. Making matters worse, 40 percent of MTA employees who performed the tasks that BSC would now undertake were laid off. This further diminished BSC’s popularity.