from grant dependent to profit centre

Action Plan to Convert Educational Grant

dependent institutes to Profit Centre

From Grants Dependent to Profit Centre

Example Taken: British Council

Naseha Sameen for sevenSolutions

1

[email protected] www.sevensolutions.in

From Grants to Profit Centre

Action Plan to Convert Educational Grant dependent institutes to

Profit Centre. Examples of such an institute is ‘British Council’. This

paper takes British Council as an example and creates an action plan

around it. It is an example of how to convert an institutes that is

mainly depended on Grants to be ‘Self Sufficient’ and then ‘Revenue

Generating’ Profit Centre. It can be easily replicated to other such

institutes.

British Council – An example

As per the paper published British Council’s plan is that EU would be

off the grant by 2017. This could be replicated by other

markets/regions. Considering that this scenario is applicable to India

market and a department is responsible to implement this. The

basic work of this department is divided into three vertical. Those

are:

1. Growth - through consultative presales where we help parent

organisation to identify opportunities in their operations where they

can achieve standardisation, consolidation and reduced cost of

operations through Shared Services operations.

2. Innovation - building culture within the organisation to help it

achieve significant, disruptive improvements in performance, quality

and cost of operations. A two fold approach by driving bottom up

innovation through inclusive innovation with staff and by top down

innovation where we look to disrupt current ‘ways’ by identifying

relevant and right practices to help achieve strategic goals

3. Consulting – deliver short term consulting projects for the Shared

Service Centre and/or parent organisation based on cost charge

basis, wherever applicable.

This paper define what should be the SMART goals for Innovation

portfolio. Please also identify targets and stretched targets and

create an action plan as to achieve the stretch goals in a 12 month

period.

The focus area for this assignment

is Innovation Lab portfolio. The

scope of Innovation is primarily

within the Organization to

challenge the status quo, re-visit

the plans and practices, and to

think out of box and build a

Culture of right practices that

would help achieve Strategic

Goals.

Since, Innovation cannot and

should not work in silos, have

covered Growth and Consulting in

this assignment

Focus Area

Peripherals

Approach Used

Top Down – for long term projects drives towards fulfilling 2Y

strategic goal of British Council in synch with global goals.

Bottom Up – for short term & quick hits within department that

would facilitate achieving the strategic and regional goals.

Balanced – for projects that had huge inter-departmental

dependencies

mailto:[email protected]

http://www.sevensolutions.in/

2


We begin by understanding the revenue generation model of British Council, the annual Report of 2014-

15i and the Corporate Plans of 2014-161.

Income for British Council is generated through Teaching and

Examination, which construes almost 55% of the revenue. Though income

target was reduced for 2014-15 due to slower growth in commercial English

work and a revision of income plans in East Asia and Europeii.

Expenditure is broadly classified into Operating Cost and Platform Cost. Direct Cost is the

major driver of the expenditure, which is ~70% of the total cost and ~80% of the Operating Cost iii.

For this assignment, our assumption is that India expenditure and

income is in same lines as global income and expenditureiv

1 2013–14 based on quarter 3 forecast,

2014–15 based on operating plan FCO grant includes capital,

2015-16 based on corporate plan

Major Source of Income are:

Teaching &

Examination

Contracts

FCO Grants

INCOME

India Income is in line with the Global Income for British Council. Taking the assumption that other Income and Expenditure are in similar lines.

Operating Cost is to be

optimized in expenditure

category with focus on area of

Maximum impact – Direct Cost.



3


The action items ultimately result in main output for Innovation portfolio, which is to

gradually decrease grant dependability and ultimately be self-sustained by year 2017. To achieve this,

efforts are grouped under two broad categories – lowering cost and increasing revenue.

Increasing revenue can further be categorized as ‘Increasing Revenue from Current Sources’

and ‘Finding New Sources of Revenue Generation’.

In this document we would go through each line item in detail.

Innovation Portfolio

Decreasing Grant Dependability

Lowering Cost

Decreasing Operating

Costs

Evaluating existing

programs for Manpower

Automation /Robotics

Increasing Revenue

Increasing Rev. from Current Sources

Project Managing

Programs at each level

Targetting individual efficiency

Predictive Modelling

Finding New Avenues of

Rev. Generation

Possible Patent

Opportunities

REGIONAL GOAL (SOUTH ASIA)

2014-16

INVESTMENT - Continue to invest

the dividends from our ‘paid-for’

services in the capability, people,

technology and respond to the full

extent of opportunity for UK education

and culture worldwide, by creating

innovative and effective models of

delivery systems

PRODUCTIVITY – focus on efficiency,

cost, management, programmes and

partnerships

SCALE - Respond & utilize to full

extent all opportunity for UK education

and culture worldwide, by creating

innovative and effective models of

delivery

OUTLINE FOR ACTION PLAN OF

IMPROVEMENT - INDIA

DECREASING

DEPENDIBILITY ON

GRANTS

LOWERING COST

INCREASING REVENUE

GENERATION FROM

CURRENT SOURCES

FINDING NEW AVENUES

OF REVENUE

GENERATION

Converts To



4


Innovation Portfolio

Decreasing Grant Dependability

12 Month Plan

Approach •Top Down

Methodology

•Need to figure out the Programs relying more on grants and less on profit churn.

•Concentrating on grant-dependent programs more to reduce overall cost

Assumptions

•Program not capable of generating revenue, e.g. Charity.

Resources

•Cost/Revenue/HC etc. Data of existing programs for last 3Y.

•For Assumptive Programs like Charity, Cost/Sponsorship/Adv. Cost, Target audience etc.

Target

•Current Grant is around 20% of Total Income,

•Overall Target - by 2017, reduce the Govt. Grant in Target to 0%.

•2015 – Target – 15%

•2016 – Target – 10%

•2017 - Target - 0%

Stretched Target

•2015 - Stretched Target – 10%



First Phase of Optimization in

Profit Sharing program

Reduce dependency on Grants to 10%.

Q4

Reduce dependency on Grants to 12%.

Implement and Analyse Profit

Sharing Model

Q3

Move identified process from Grant

to Rev. Gen.

Grant Dependency to reduce from

20% to 14%

Create Cap on profit sharing from other programs for

Program not capable of generating

revenue, e.g. Charity.

Q2

Figure out the Programs relying

more on grants and less on profit

churn

Map all process that can generate

profit

Q1



5


Decreasing Operating Costs

12 Month Plan

Approach •Bottom Up

Methodology

•To figure out existing suppliers of resources (for e.g. papers, printer supplies, real estate etc.), re-evaluate the market for cheaper souces of supplies

Assumptions

•Assuming, the Operating Cost remains same or reduces in total and we target only Infrastructure Cost from total Op Cost.

Resources

•Profitability of last 3 years.

•Market research of new vendors.

•Current Supply Chain Practice

•.

Target

•Overall Target - by 2017 reduce the infrastucture cost from current 14% to less than 7%

•2015 – 12% Target,

•2016 – 10% Target,

•2017 – Less than 7%

Stretched Target

•2015 - stretched Target – 10%

•2016 - stretched Target – 8%

•2017 – Less than 6%

Optimize the process to reduce Cost from 11% to

10%

Q4

Market research for new vendors and new tie ups

Reduce Cost from 12% to 11%

Q3

Touching first 20% of the Pareto

output.

Applying LEAN to the above identified

processes.


Q2

Map all process

Applying DMAIC to Current Supply

Chain Practice


Q1



6


Project Managing Programs at each level

12 Month Plan


Methodology

•Driving MOST (Mission, Objective, Strategies, Tactic) and other BA tools, driving each micro level task with the view of the Mission/Vision. Identifying the deliverables and responsibility centers at each stage.

Assumptions

•Some Programs are not Project Managed or have opportunities of improvement.

Resources•Data on all current programs and inline programs, deliverables and responsibility center..

Target•All current Programs are Project Managed by end of year.

Stretched Target

•All current Programs are Project Managed within 10 Months.

•Framework for future Programs to be Project Managed in place.

By mid of this Q 100% of total

projects should be Project Managed

Framework for future Programs

to be Project Managed in place

Q4

By end of this Q 70% of total


Q3

Create framework for Programs to be

Project Managed and apply them

By end of this Q 35% of total


Q2

Map all process

Apply Business Analysis tools to each micro level

task with the view of the

Mission/Vision. Identifying the

deliverables and responsibility

centers at each stage.

Q1



7


Evaluating existing programs for Manpower

12 Month Plan

Approach •Top Down & Bottom Up

Methodology

•To figure out the number of manpower involved in programs, evaluate the need of manpower for such programs and see if more programs can be managed with existing resources

Assumptions

•Absence of multi-skill in employees.

Resources

•Manpower/Manhours/Productive Efficiency information on all current programs and inline programs, deliverables and responsibility centers.

Target

•Decreasing average manpower per program by

•Q1: 1%

•Q2: 3%

•Q3: 4%

•Q4: 5%

Stretched Target

•Decreasing average manpower per program by

•Q1: 2%

•Q2: 4%

•Q3: 5%

•Q4: 6%.

Optimize & improve

Productivity Targets for

Employees -decrease average

manpower per program by 6%

Q4

Multi Skilling Employess

decrease average manpower per

program by 5%

Q3

Training of Employees on

Increasing Productivity like

short cuts, smart keys etc. to

decrease average manpower per program by 4%

Q2

Map all process

Employee Scheduling &

Engagement to decrease average

manpower per program by 2%

Q1



8


Targeting individual efficiency

12 Month Plan


Methodology

•Time and Motion of repititive works to understand the time taken which needs to improve with experience.

•Training employees on LEAN (to avoid/remove wastage).

•Multi skilling to create back ups and remove dependencies.

Assumptions

•Applicable to only repititive tasks.

Resources

•Manpower/Manhours/Productive Efficiency information on all current programs and inline programs, deliverables and responsibility centers.

Target

•Increase in efficiency of productivity

•Q1: 2%

•Q2: 4%

•Q3: 6%

•Q4: 8%

Stretched Target

•Increase in efficiency of productivity

•Q1: 4%

•Q2: 6%

•Q3: 8%

•Q4: 10%

Increasing Productivity as per normal growth for Employees by 10%

Q4

Multi Skilling Employess and

implementation of LEAN to increase

productivity by 8%

Q3

Training of Employees on

Increasing Productivity like

short cuts, smart keys etc. to

increase average productivity by 6%

(same as Q2 plan for Evaluating

Existing Program for Manpower)

Q2

Map all process

TnM of all the process

Basic Training of Employees on

Error Reducing Methods to

increase average productivity by 4%

Q1



9


Automation/Robotics

12 Month Plan


Methodology

•Upgradation to existing IT setup (for e.g. in case we are on P3 and 1 GB RAM), cases that results in latency and time consumption.

•Targetting IT downtime to reduce wastage of time.

Assumptions

•There are scopes of Automation

•The CBA fits into budget.

Resources

•As Is Process Maps / Flowcharts

•IT Downtime data

•HW/SW Specs

Target

•Identifying and implementing Quick Hits in 6 months.

•6 process automation in 12 months

Stretched Target

•Identifying and implementing Quick Hits in 6 months.

•8 process automation in 12 months

2 more Process to be automated

Q4

Targetting IT downtime to

reduce wastage of time.

3 more Process to be automated

Q3

Upgrading the existing IT setup

cases that results in latency and

time consumption.

Identifying and implementing Quick Hits in 3

months.

4 Process to be automated

Q2

Map all process

Identifying and implementing Quick Hits in 3

months.

Q1



10


Possible Patent Opportunities

12 Month Plan


Methodology

•Exploring Partnership with Universities, Research Facilities and Individual Researchers for assisting in development of ideas that can be patented or co-patented.

Assumptions

•Potential Patent opportunity found.

Resources•Partner intellectual data

Target•2 Patent Opportunities in first year

Stretched Target

•3 Patent Opportunities in first year

1 Patent Opportunities in

Quarter

Q4


Quarter

Q3

Partner intellectual data


Quarter

.

Q2

Exploring Partnership with

Universities, Research Facilities

and Individual Researchers for

assisting in development of

ideas that can be patented or co-

patented.

Q1



11


Predictive Modelling

12 Month Plan


Methodology

•Forecasting Demand and Analysis of Causality.

Assumptions

•Availability of correct market data.

Resources

•Correct market data on past and current demand, socio-political and climatic changes and global events in culture and entertainment market.

Target

•Forecasting accuracy 90% in first year.

•Identifying 3 main drivers/influencers & suggesting programs to tap the market.

•Resulting increase in Revenue by 5%.

Stretched Target

•Forecasting accuracy 95% in first year.

•Identifying 5 main drivers/influencers & suggesting programs to tap the market.

•Resulting increase in Revenue by 8%.

Modification of Models

Increasing Revenue by 8%

through identifying main

driver and causality

Increasing Forecast accuracy

to 95%

Q4

Pluging of Gaps

Increasing Revenue by 5%

through identifying main

driver

Q3

Forecasting with 80% accuracy

Effect of Drivers analysis

.

Q2

Data Collection and Modeling of

Data

Q1



12


Growth & Consulting Portfolio

Harvesting existing services partners Finding needs of existing partners that can be catered to, creating Case Studies and

pitching it for getting new business from existing clients

Creating Demand in current societal structure Designing a new supply for the new middle class with ambition of better education and

skillset. The new middle class has more purchasing power since 2010 than before.

Restructuring Price Plan for Customer Retention/Acquisition Existing Price Plans can be looked at to make them more lucrative and cost effective.

For example - Online Library can be made free for generic study and charged for

specific/research oriented study. Charging method could be per click/month with utility

protection.

Utility Protection reflects the confidence of the Brand and gives assurance to Customer for

utility of money

Increasing number of Partners in India Increasing number of partners in different sector like IPL for sports, state Universities for

research, NIIT for e-learning, Konark Festival for cultural exchange

Corporate Trainings for Client Engagement roles India is a hub for BPO, process are migrated from mainly two countries – USA and UK. For

both, knowledge of English is mandatory. British Council can partner with BPOs to provide

Basic English training for US process and English, Soft Skills, Voice and Accent and Culture

Training for UK process

Exploring Entertainment Industry for promoting UK Entertainment is huge industry in India which can be tapped to revenue generation.

Most popular channels in India are from the USA, few channels from the UK is popular like

BBC. More channels from the UK can be partnered with for airing in India that can add to

mutual benefit and growth.

Interest in the UK and its culture can be increased using popular movie which has its roots

in the UK like James Bond, Sherlock Holmes by partnering with Distribution Houses.

When novel like Harry Potter was released, the UK tourism saw an increase in number.

India did miss out on using such events to customised tours. Such events can be used to

increase tourism to the UK, generating increased revenue. British council can partner with

OTA or provide such customised tours.



13


Summary: This is a paradigm shift from Grant dependent to Self Sufficient and then to Revenue

Generating Model

The target is steep but not unachievable

Main Methods used are Six Sigma, Project Management and Statistical Analysis

Inter-department communication and leveraging is required to achieve stretched target

Reference:

i http://www.britishcouncil.org/sites/britishcouncil.uk2/files/d554_annual_report_final.pdf ii http://www.britishcouncil.org/sites/britishcouncil.uk2/files/corporate-plan-2014-16.pdf Page 49 iii http://www.britishcouncil.org/sites/britishcouncil.uk2/files/corporate-plan-2014-16.pdf Page 49 iv http://www.britishcouncil.org/sites/britishcouncil.uk2/files/d554_annual_report_final.pdf - Page 43 http://www.britishcouncil.in/programmes http://www.britishcouncil.in/about

NASEHA SAMEEN

http://www.slideshare.net/nasehasameen [email protected]

+91-9818665497



http://www.britishcouncil.org/sites/britishcouncil.uk2/files/d554_annual_report_final.pdf

http://www.britishcouncil.org/sites/britishcouncil.uk2/files/corporate-plan-2014-16.pdf

http://www.britishcouncil.org/sites/britishcouncil.uk2/files/corporate-plan-2014-16.pdf

http://www.britishcouncil.org/sites/britishcouncil.uk2/files/d554_annual_report_final.pdf%20-%20Page%2043

http://www.britishcouncil.in/programmes

http://www.britishcouncil.in/about

http://www.slideshare.net/nasehasameen
