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Course costing…

Course costing…. and reflections on process benchmarking. Dr Thomas Loya, Director Planning and Management Information University of Nottingham. Overview. Process benchmarking: evaluating aspects of processes in relation to peer group / sector ‘best practice’ – but how best to determine?

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Course costing…

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  1. Course costing… and reflections onprocess benchmarking Dr Thomas Loya, Director Planning and Management Information University of Nottingham 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? Various models for identifying good practice 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 The Model: Costs TRAC Teaching Costs By School Teaching Assessment Other Fixed Costs Variable Costs HESA: Process Benchmarking Seminar – June 2011

  8. Course costing The Model: Shares Module Fixed Cost Amount Credits * School share * weight Module Variable Cost Amount Credits * School share * weight * students HESA: Process Benchmarking Seminar – June 2011

  9. Course costing The Model: Modules Module Fixed Cost Amount Module Variable Cost Amount Total Module Income and Costs Fixed Costs Variable Costs Module Income Central Costs HESA: Process Benchmarking Seminar – June 2011

  10. Course costing The Model: Courses Module Income and Costs Course Income and Costs Students by Course and Module 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… HESA: Process Benchmarking Seminar– June 2011

  16. Thank you For questions, please contact: Thomas.loya@nottingham.ac.uk

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