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Abbey Life AssuranceABB Kent MetersACCO EuropeAEA Technology (Harwell)Allied DomecqAllied Industrial ServicesAlstom Gas TurbinesAmocoAnglia Polytechnic UniversityAspen Business CommsAutomobile AssociationAvesta SheffieldBahrain TelecomBank of Ireland MortgagesBanque Industrie FranBaiseBARMACBBC ProductionBBC World ServiceBBC WorldwideBenfield MotorsBETBoehringer Mannheim LimitedBoots International HealthcareBoots the ChemistBoots Store PlanningBP ChemicalsBP ExplorationBP OilBAe Systems and EquipmentBritish Aviation InsuranceBritish RailBritish TelecomBT ConferencingBT Mobile BTR Graphics
Building Research EstablishmentCCH EditionsCendant Business AnswersCentury GroupCerberusChalmers & MitchellCharities Aid FoundationCharter ConsolidatedCI BakeriesCIC Banque (Paris)CLS PackagingClyde ShippingComagCo-operative BankCo-operative Retail ServicesCopystatic SystemsCostainDepartment of the Environment, Transport and the RegionsDHL WorldwideDominic GroupEast Midlands ElectricityEnronEquifaxEstonian RailwaysFactory Mutual InternationalFisons PharmaceuticalsFleet Air ArmForth River Purification BoardFranklin MintGlostalGranada Hospitality ServicesGranvilleGrattan
Guardian NewspapersGuardian Royal ExchangeGunstones BakeryHazlewood FoodsH P BulmerHepworth RefractoriesHollow ExtrusionsHolt Jackson Book CompanyHow Engineering ServicesHydrographic OfficeIlford FilmsJersey MilkKao Infosystems (UK)Kleinwort BensonKuwait Investment OfficeKyle Stewart LimitedLab of the Govnt ChemistLe Riche GroupLeeds Permanent Bldg SocietyLIFFELivpl Victoria Friendly SocietyLloyds BowmakerLombard North CentralLondon ElectricityLucas Aftermarket OperationsLucas Automotive ElectronicsLyons TetleyMeggittMercantile CreditMetal CastingsMinistry of DefenceMuraspec
Murray LawrenceNational SavingsNational Starch NatWest BankNokia TelecommsNORWEBOhmeda LimitedPearl AssurancePerot SystemsPilkington Barnes HindPro-BelPrudential AssurancePrudential Home ServicePrudential Portfolio PyrobanQuadrantRhone Poulenc RorerRoss BreedersRover GroupRoyal Automobile ClubRoyal Bank of ScotlandRTZ PillarSaudi International BankSchroder Unit TrustsScottish CourageScottish Environment PASevern Trent SystemsSG HambrosSimpson LawrenceSir William HalcrowSmithKline BeechamSouth West WaterST Microelectronics
Staveley IndustriesStryker (Howmedica International)Sun Alliance GroupSun Life AssuranceSyntegraTate & Lyle SugarsTexacoThe Mercers CompanyThe Post OfficeToad InnovationsUK PaperUnited UtilitiesUniversity of LeedsUniversity of ManchesterUniversity of SurreyVertex Data ScienceWH SmithWace GroupWaitroseWalter AlexanderWellaWhitbreadWholesale FittingsYellow PagesYorkshire ElectricityZeneca Pharma Zurich Insurance
Typical past clients: (Broad spectrum)
Typical clients in the HE/FE sector:• University of Leeds
• University of Manchester
• University of Surrey
• City University
• Anglia Polytechnic University
• Buckinghamshire Chilterns University College
• Edinburgh Telford College
UFS HE is big business
Income UK 2001/02
- 1.0 2.0 3.0 4.0 5.0 6.0
Funding Council grants
Tuition fees, grants, contracts
Research grants & Contracts
Other income
Endowment & investment income
Amount £bns
UFS
Pricing GuidelinesJCPSG Publications -•Pricing Toolkit•Developing a Pricing Strategy
Treasury letter (February 2004)- see TRAC Volume 111
OST Guidance on the Pricing of Research Projects (October 2004) - see OST website http://www.ost.gov.uk/whats_new.htm (17 November 2004)
Prices to be paid by Research Councils - see OST website http://www.ost.gov.uk/whats_new.htm (6 January 2005)
Time table for the Operation of Pricing based upon Full Economic Cost Methods (sent to VCs in March 2005) - to be included on www.jcpsg.ac.uk/resources/letters.htm by 15 April 2005
Key messages and actions that follow
1. An example of a pricing policy which an HEI might adopt
is one that aims to set prices that cover actual costs and
make a surplus on any activity, the level of surplus
reflecting what the market can bear.
3. It is recognised that an institution may not be in control
of prices for certain services, since most HEIs operate in
a variety of markets with often very different constraints
in pricing
1. The increased awareness of the costs of different activities and different units that has come about
as a result of the Transparency Review should enable institutions to have a much clearer view of
which areas are financially viable, and which are not.
3. The pricing strategy may need to address using the opportunity to review processes and seek
simplification.
UFS High quality answers are needed
Contribution
analysisContribution analysis
UFS Key points
• Meaningful information. Not buried by data.
•
•
•
•
•
UFS
Whereyou arenow
Whereyou want
to be
Capability• Methods
• Processes
• Organisation
• Technology
• Skills
• Culture
Positioning• Products/services
• Customer Needs
• Competitors
• Regulatory framework
• Environment
• Shareholders
Strategy is about Positioning and Capability•Overseas student fees•Non-publicly funded courses•Franchised programmes•Research and consultancy•Professional courses•Major teaching contracts •Short courses•Workplace nurseries•Residences, catering, conferences, •Bars and shops•Printing and publishing•Theatre performances•Room and equipment hire
UFS
Capability
PositioningActivity Based Management
Product & Customer profitability
Portfolio mix, pricing
Business Process Re-engineering
Reduce process costs, improve
service
Where youare now
Where youwant to be
The journey
Change Management
Performance Measurement
Culture Change
No pitfalls on the journey
Where are we on the journey?
Is everyone with us?
UFS Key points
• Meaningful information. Not buried by data.
• Need to work on both axes: Positioning & Capability
•
•
•
•
UFS Activities: The fundamental building blocks
ActivitiesInputsMake activities
happen
Cost driver volumes *
OutputsResult of activities
Service levels *
ResourcesLedger
Costs *
MethodsWay things are
doneUnit costs *
* All these are measurable
Activities are the engine of change
Revenue
UFS Activities
Process effectivenessUsing Business Process Re-engineering
TRAC & fEC using Activity Based Costing
ActivitiesInputsMake activities
happen
Cost driver volumes
OutputsResult of activities
ResourcesLedger
Costs
MethodsWay things are
done
Unit costs
UFS Key points
• Create meaningful information. Don’t get buried by data.
• Need to work on both axes: Positioning & Capability – plot the journey
• ‘Activities’: useful for TRAC, fEC and improving process effectiveness
•
•
•
UFS Activities vary for different reasons
Core
Adds value, meets business and customer needs
Support
Enables core activityto take place
Diversionary
Adds cost, but no value - caused by process failure
Reduce costs:
By changing the method
Reduce costs:
By making an upstream process improvement
..and by
Changing customer (& supplier) behaviours
Reduce (increase) costs:
By changing the level of service
internally & externally and identify risks
(benefits)
Show excited customer research
proposal
Travel to customer
Explain to customer why last project was
late, report had missing sections and the invoice
was wrong
UFS Process view more useful than functional view
Linked activities - with measurable inputs and outputs
Inputs
(eg Student shows up for
Registration)
Outputs
(eg Student registered and fees in the bank)
UFS Becoming price competitive (and/or fund growth plans)
C C/S C/D D
InputsOutputs
51%30%
19%
Typical starting
point
Overall less and
rebalancedBecomes
UFS Key points
• Create meaningful information. Don’t get buried by data.
• Need to work on both axes: Positioning & Capability – plot the journey
• ‘Activities’: useful for FEC and improving process effectiveness
• Reducing ‘diversionary costs’ funds all your improvements (case study later)
• All functions work together concurrently on Positioning & Capability
• ABC analysis produces surprising insights even in simple businesses.
• …and as many shocks and surprises in a University
UFS Case study: University
Capabilityeg Improve processes to reduce costs & improve service
1. Recruitment, Admissions and Registration (including marketing activities)
2. Timetabling
3. Assessment
4. Curriculum Development and Management
5. QA: Validation and Annual Monitoring
6. Staff Development and Training
….
….
23. Key processes
UFS
Many students do not enter through the UCAS standard system e.g. entry through NMAS, ‘route B’, direct
application, part-time, post-graduate. Nurses and design students all require interviews.
Admissions process viewed as slow, inefficient and uncertain
Lack of clarity of task split between centre and faculty admissions
Students faced with queues, delays and repetition
Fragmented impression given to student – may lose potential students
Fragmented and duplicate data collected throughout university
Inconsistency of processes in different parts of organisation
Persistent schedule slippage, deadlines felt to be unrealistic
Everyone involved in much diversionary chasing activity
Needs clear strategic direction – no real course planning or portfolio development strategy
Curriculum development tends to be faculty-driven rather than demand-lead
Academic planning process is not adhered to – 2 year lead time required for new courses by administrative
procedures
Short product life cycle but tendency to add and never cut courses (many modules may be running
uneconomically)
General consensus that too much choice is offered to students
Recruitment, Admissions and Registration
Curriculum Development and Management
Staff know of many more issues at the detailed level so more can be improved.
Ensures buy-in by the people who will be affected by the proposed changes.
Involve the people who work in the processes
UFS
Attend Open Day
FacultyD/base
MarketingD/base
Create a process perspective: Walk processes
ProspectiveStudent
Marketing
Yes
Faculty Admin
No
Student contacts BCUC with an enquiry
1
Answer query / send prospectus.
8
Answer query / provide further
detail or pass to academic
3
Admissions
Answer query about entry
qualifications
5
Accommodation
Answer query about
accommodation
6
13
Send follow-up letter - different O/D dates to
non-attendees.
14
Update Definitive course list
Update courses on Marketing
Database
Follow-up if they wish?
10
FacultyAcademics
Answer query / provide further
detail
4
Provide information on
courses
Simpleenquiry?
2
DisabilitySupportServices
Answer query about disabilities
7
Arrange suitable facilities to
enable student to attend12
Answer query / send prospectus.
Pass on names if student has shown interest in open day
15
Send out invites to Open Day and record those who
attend.11
Record in Enquiries D/base. e-mail to Faculties
weekly
9
No further followup. Student then
decides toapply / not.
16
Example shown is ‘Handling Enquiries’ a Sub process of Recruitment
The Recruitment, Admissions, Enrolment and Induction process is one of the most complex processes in a university and very prone to process failures and therefore unnecessary costs
Seeing the impact of issues within and between departments
UFS Analyse activities from a new perspective
Core
Adds value, meets business and customer needs
Support
Enables core activityto take place
Diversionary
Adds cost, but no value - caused by process failure
Forecast next year’s student accommodation needs
Keep records of suitable accommodation
Deal with all the mismatches and unexpected numbers of students. Done with haste and incurring extra costs.
Strategy, res planningStrategy, res plngCurriculum dev, QAStudent recruitment
Student inductionCurriculum mgt
Student progressStudent support
Income collectionHousing services
PlacementsPurchasing
IS/ITHuman Resources
Financial mgtEstates mgtGeneral mgt
Core Support Diversionary
Hours
Reported diversionary = 18% total time workedRemoving 50% of it releases 87,000 hours p.a.
Total hours p.a. 970,000FTEs 565 £11,338,000
UFS
Dept A Dept B Dept C Dept D
Task Task
Task TaskCheck/decision
MarketingD/base
NoFurtheraction
Bring people together linked in a process
Very often the people in different functions linked by a process will not have been together before to solve process problems.
The event is a revelation.
Why do the Schools and the Centre both do
it?!
It is nowonder it
takes so long!
I'm confused!No wonder the
student is!
No chance that the HEFCE returns will
be on time
A Process Review Meeting
One per process
Issues and problems
Ideas for improvements
Inputs
Agreement to make changes
Implementation path – who, how, when
Outputs
UFS
RecommendationsStgGp Recruitment is and increasingly a key issue for Uni. Develop Uni-wide recruitment
strategy to ensure that Faculties work within a common framework and direction. Recruitment strategy to define approach to be taken with different target groups:
Do they have different ‘recruit’ / ‘sell’ priorities? What are the messages that staff should be giving to the different groups?
Clarify the image that the Uni is trying to portray…. ‘suits or jeans’?
UCAS Late entrantsClearingDirect entry
Define and implement process to generate and maintain a Definitive Course List comprising:
List of all courses, both full-time and part-time
Status e.g. validated / to be validated, running / not running, in prospectus
Fee
Timing (for part-time courses)
(e) Short-term solution (quick-win): paper based
(f) longer-term solution: database of all information, accessible via the web
PST
Example: Process #1. Recruitment, admissions, enrolment and induction
UFS
StgGp
Assign clear roles and responsibilities:
(a) Each Faculty to have a Recruitment and Admissions Tutor (academic) and a Recruitment and Admissions Officer (administrative staff)
(b) Create a ‘Recruitment Action Team’:
Develop recruitment ideas, share best practice
Ensure common approach and consistency (e.g. open days, enquiries handling and follow up)
Enable communication between marketing, enquiries and faculties
Ensure standardisation of Joining Instructions
Marketing
Admissions
FacultyRecruitment &
AdmissionsTutor
FacultyRecruitment &
AdmissionsTutor
FacultyRecruitment &
AdmissionsTutor
FacultyRecruitment &
AdmissionsTutor
FacultyRecruitment &
AdmissionsTutor
Local SchoolLiaison
Coordinator
Head of Strategy
& Planning
FacultyRecruitment &
AdmissionsTutor
Recruitment Action Team
Inputs:•Market intelligence•Trends & forecasts•Uni strategy•Recruitment plan
• All functions work together concurrently on Positioning & Capability
• ABC analysis produces surprising insights even in simple businesses.
• …and as many shocks and surprises in a University
• Process analysis uncovers ways to improve methods and reduce/eliminate process failures. The savings can be used to finance growth and improve service levels.
UFS Implications for 2005 onwards
The bigger picture
UFS Sources of income
5,692,090 3,338,194
Research Councils 805,360 UK charities 606,885 UK central gov, LAs, Health 413,163 UK industry 250,232 EU sources 188,864 Other Overseas 115,605 Other 53,309
2,433,418 Course validation fees 17,791 Teaching companies 25,638 UK central gov, LAs, Health 208,743 UK industry 137,866 EU sources 61,287 Other Overseas 30,572 Other operating income 1,025,441 Residences & catering ops 967,802 Grants from LAs 872 Income from Health & Hospital 227,303 Release of deferred capital 45,858 Income from IP rights 19,874
2,769,047 Specific endowments 117,180 General endowments 26,971 Interest receivable 113,975
258,126
Total: UK 14,490,875
Endowment & investment
income
Other income
Funding Council grantsTuition fees & education grants & contracts