Course costing… Dr Thomas Loya, Director Planning and Management Information University of Nottingham HESA: Process Benchmarking Seminar – June 2011 and.

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

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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

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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

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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

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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

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Course costing

TRAC Teaching CostsBy School

Assessment

Variable CostsFixed Costs

Teaching Other

The Model:Costs

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Course costing

The Model:Shares

Module Variable Cost

Amount

Credits * School share * weight * students

Module Fixed Cost Amount

Credits * School share * weight

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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

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Course costing

The Model:Courses

Module Income and

Costs

Students by Course and

Module

Course Income and

Costs

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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

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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

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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

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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

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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:

[email protected]