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Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

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Page 1: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Financial Reporting

To Improve Operational MetricsTo Lower the Odds of Being Outsourced

DENNIS MEKELBURG

SENIOR CONSULTANT, INDICO

CSANC, OCT 27, 2015

Page 2: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Goals for Today

An Interactive Conversation

Talk about why we should report financial (and other) information

Talk about the “teaser questions” and why they were asked

Provide some information and ideas to use in our stores

Learn about some of the language of outsourcing

Talk about contractor interests and language

Page 3: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

What have you done

TODAY?

Page 4: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015
Page 5: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

How often do the contractors communicate with your administration?

At least once a month?

NACAS and NACUBO publications

Several times a year?

NACAS and NACUBO meetings

Direct communication

Mailings

Personal contacts

Page 6: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

So – What does that mean relative to financial reporting?

To whom do want your administration to listen?

Page 7: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Why Would Your Campus Outsource the Bookstore?

Financial – Perceived or Real

Textbook sales declining – fear about future sales

Fear of the future – digital textbooks

Perceived lack of customer satisfaction

Lack of communication from the bookstore

Page 8: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Why Would Your Campus Outsource the Bookstore?

Are the contractors communicating with your administration?

NACAS

NACUBO

What are they telling your administrators?

Page 9: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

How to Address Pressures to Outsource

Financial

Know your numbers!

Especially what the total contribution to the campus is

Improve each primary measurement

Examples:

Cash flow

Textbook inventory arrival/return management

Page 10: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Three Guys - $30

Make Sure the numbers make sense!

Page 11: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

How to Address Pressures to Outsource

Textbook sales declining?

Know Why!

Category Sales (New, Used, Rental, Digital)

Unit Sales

Rental Units increasing or declining?

More course materials through the campus LMS?

What is the customer feedback?

Page 12: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

How to Address Pressures to Outsource

Fear of the future – digital textbooks

Do you believe these Ads in NACAS magazines by contractors?

“Only xxx can help you seamlessly manage the transition to digital course materials…..”

“XXX is the undisputed leader in helping you create a superior campus store experience”

“We’re your faculty’s advocate – empowering them with groundbreaking textbook research and adoption tools”

“We’re your campus’ retail expert – fueling school spirit with dynamic in-store and online shopping experiences”

“We’re your school’s hands-on partner – delivering what’s next to drive your academic and business success”

“Original and inventive, our solutions are as unique as the bookstores they benefit”

Page 13: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

How to Address Pressures to Outsource

Know what the contractors are saying

“We’re your students trusted ally – saving them the most money on course materials and providing the most options”

How are they the trusted ally?

What are the metrics for “saving the most money”

What options do they provide that others do not?

Page 14: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Reducing the Odds

Maintain a list of all services that the current store provides Include with financial reports

Track every nickel that you provide for your campus and administration Profit

“Rent”

Utilities

Assessments for administration, IT support, etc.

Required contributions for employee benefits

Contributions to R&R

Departmental, faculty/staff discounts

Contributions to campus related organizations

Are they of high value to some constituency?

Find out if customers care about the services

What is the dollar value of them being provided?

Page 15: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

How to Address Pressures to Outsource

Emphasize that the course materials are ordered ON CAMPUS.

Be the course materials expert on your campus

Access code sales in the store and online

Sell through academic departments

Through LMS (Blackboard, etc.)

Fee based, included in tuition

Multiple licenses, delivered to individual students through the LMS, charged to the academic department

Support faculty publication of digital materials

Example - RedShelf as a partner

Know about the competitors

Amazon

Akademos

Page 16: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

How to Address Pressures to Outsource

Perceived lack of customer satisfaction

How often do you measure customer satisfaction?

What was the action plan formulated from the last survey?

Page 17: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Reducing the Odds

Know the institutions goals for the store

Are goals for the store clearly stated?

Are they realistic?

Communicate/Communicate/Communicate

Tell – Keep a current list of all that the store provides

Ask

Have you asked for exclusivity for textbook (or other) sales on campus?

Exclusivity is a condition of the contract for most outsourced stores

Page 18: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Reducing the Odds

Operate the store as if it was outsourced

COMMUNICATE!

Financial Goals Achieved

Student Satisfaction

Positive Messages

Page 19: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Reducing the Odds – Tell the Story!

Know what you bring to the table Complete access for all constituencies

On campus, off campus, faculty, alumni and staff

Policies and Procedures locally derived

Not subject to corporate policies, procedures and dictates

Professional, campus specific knowledge

All course materials decisions make in the store

Access to all technologies for price comparison and sourcing

Examples - Verba / Sidewalk / Rafter

Access to technologies for digital migration

Example - RedShelf

Page 20: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Campus Contribution Worksheet

Campus Contributions Worksheet

Store Net Sales  

Discounts   All discounts - students, faculty/staff, sapecial sales, etc.Rent  Commission  Donations   Monetary and in-kind (books to audio, etc.)Scholarships  Institutional Support   Cost of 3rd party partnerships that are focused on student satisfactionBad Debt  Rebates    In a contracted store many, if not most, of these go to home officeUtilities (on campus utilities only)  Net Income  Other (non-sales income) Grad, Amazon etc.  TOTAL  

Contribution as a % of sales #DIV/0!

Page 21: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Teaser Questions“Why does it matter” to each question

When you take your annual physical inventory, how do you determine the cost value of the inventory? If you use system cost as the number, how is that cost calculated?

What do you believe is an acceptable number (as a percentage of retail sales) for mark-downs from retail for product that doesn’t sell at the initial retail price?

How many full-time or part-time positions have you filled during the last fiscal year?

How many full-time or part-time positions have you not filled during the last fiscal year?

How many adopted titles are on the shelf for Fall, 2015?

How many adopted titles were on the shelf for Fall, 2014?

What is the additional charge, paid to the institution, for each dollar paid in salaries or wages? (Benefits and / or administrative charge)

Page 22: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Teaser Questions“Why does it matter” to each question

What is your total personnel cost, as a percentage of net sales?

What percentage of your sales for course materials are fulfilled through web sales?

What percentage of your sales for general merchandise are fulfilled through web sales?

What percentage of your course materials sales through the web include at least one SKU of general merchandise?

What is your marketing / advertising expense for this fiscal year, and how much of that number is dedicated to the web?

What is the metric your store uses for the shipment of received web orders relative to the receipt of the order?

Do you use dynamic pricing for any of your course materials?

What expenses have you purposely increased or decreased during this fiscal

Page 23: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

What have you done

TODAY?

Page 24: Financial Reporting To Improve Operational Metrics To Lower the Odds of Being Outsourced DENNIS MEKELBURG SENIOR CONSULTANT, INDICO CSANC, OCT 27, 2015

Reducing the Odds – Two Things:

1. If you have additional strategies that will enhance and supplement our endeavors – please send to me!

2. THANK YOU!

Contact Information:

Dennis Mekelburg

Senior Consultant

indiCo

[email protected]

[email protected]