course costing… dr thomas loya, director planning and management information university of...
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Course costing…
Dr Thomas Loya, Director
Planning and Management Information
University of Nottingham
HESA: Process Benchmarking Seminar – June 2011
and reflections on
process benchmarking
HESA: Process Benchmarking Seminar – June 2011
2
Overview
Process benchmarking: evaluating aspects of processes in relation to peer group / sector ‘best practice’ – but how best to determine?
1.Various models for identifying good practice
2.Course costing: University of Nottingham’s journey
Introduction
HESA: Process Benchmarking Seminar – June 2011
3
Independent HE Research Agencies (USA)
• Extensive specialist research capability
• Membership based - but wide representation
• Expanding membership into UK
• Strong basis for Identifying good practice
• Comprehensive coverage of HE activities
• Examples:– Education Advisory Board
– Hanover Research Council
Process BM: Other models
HESA: Process Benchmarking Seminar – June 2011 4
Standards organisations (BSI, ISO, etc)
• Justifiable claim to define best practice• Extensive cross-sector engagement• Strong links to international / global practice• Negligible engagement by UK HE sector!• Strong coverage of biz process improvement:
Risk mgmt, Info security, environmental mgmt, business continuity, accessibility, business system documentation, supply chain mgmt, etc
Process BM: Other models
HESA: Process Benchmarking Seminar – June 2011 5
Purposes and issues
• Assess teaching cost, income & profitability• Focus resource on higher net revenue areas• Cultural change: cost & efficiency awareness• Identify all costs - in Schools and ‘centre’• Provide powerful form of mgmt information• Not to be used in isolation; context is a review /
refresh of institutional portfolio
Course costing
HESA: Process Benchmarking Seminar – June 2011 6
Two overall approaches
• Bottom-up: activity based costing– Aggregate up specific activity costs– Detailed time, quantity, activity data– Fine grained; costly to gather & analyse data– Successful one-School pilot => scalability issues
• Top-down– Parcel out high-level costs to modules– Aggregate up costs to courses– Broad-brush, use centrally held data– Set out on this path for first institution-wide exercise
Course costing
HESA: Process Benchmarking Seminar – June 2011 7
Course costing
TRAC Teaching CostsBy School
Assessment
Variable CostsFixed Costs
Teaching Other
The Model:Costs
HESA: Process Benchmarking Seminar – June 2011 8
Course costing
The Model:Shares
Module Variable Cost
Amount
Credits * School share * weight * students
Module Fixed Cost Amount
Credits * School share * weight
HESA: Process Benchmarking Seminar – June 2011 9
Course costing
The Model:Modules
Module Variable Cost
Amount
Module Fixed Cost Amount
Fixed Costs Variable Costs
Module Income
Total Module
Income and Costs
Central Costs
HESA: Process Benchmarking Seminar – June 2011 10
Course costing
The Model:Courses
Module Income and
Costs
Students by Course and
Module
Course Income and
Costs
HESA: Process Benchmarking Seminar – June 2011 11
Outputs
• Income, school and central costs => operating and net margins, for every course
• Currently covers UG + PGT, for 2 years
• Identify cost drivers, areas for review
• Valuable input to academic strategy development and institutional portfolio review
Course costing
HESA: Process Benchmarking Seminar – June 2011 12
Some issues and next steps
• Costs dependent on module classification
• Skepticism about use of TRAC data
• Input data as valuable as headline figures
• Complex chain of reasoning to mgmt action
• Have moved to bottom-up approach!
Course costing
HESA: Process Benchmarking Seminar – June 2011 13
Practical considerations
• High data volumes led to use of Cognos EP for data management and analysis
• Long period to register impact of changes
• To gain full value, needs to be repeatable
• Bottom-up data gathering is costly
• Can appear contrary to academic culture
Course costing
HESA: Process Benchmarking seminar – June 2011 14
Implications for benchmarking…
• Feasibility dependencies: data availability, data mgmt capability, drivers, scale, scope…
• Costs may reflect mission, subject mix, organisation structure, efficiency of ops
• Powerful internal metric, but…
– Not likely to be a quick win
– Difficult/impossible to include quality
– Limited scope comparability b/w HEIs
Course costing
HESA: Process Benchmarking Seminar– June 2011 15
Issues, questions and concerns
• Best practice vs just ‘good’ practice(s)?
• Efficiency - institution or sector attribute?
• Competition - cuts both ways
• Can be irrational to share real innovation
• Myth of ‘HE exceptionalism’
• What do we want from HESA?
Finally…
Thank you
For questions, please contact:
Thomas.loya@nottingham.ac.uk
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