In a time of increasing pressure on resources, every college is exploring ways to improve its cost effectiveness. National policy advice continues to nudge colleges towards investing in Shared Service solutions, and yet most colleges are reluctant to give up sovereignty of their support service functions.

But to quote the strap line of a major high street bank: there is another way! Some recent data analysis work has been undertaken to support colleges who wish to improve their cost effectiveness through business process reengineering.

The work stemmed from an analysis of sector benchmarking cost data and recasting the data on a transactional cost basis. This approach seeks to identify how much it costs each college to run its support services, for example its finance function; or HR service; or MIS based on the key driver of that cost area. One such “cost-driver” might be MIS cost per student.

The research results show that some colleges spend three times as much as others on running their MIS function. And some spend three times as much on their finance function, and others three times as much on their HR function.

Even more surprising is that the lowest cost functions are to be found in ‘Outstanding’ colleges as measured by Ofsted. One of the highlights of the research is shown in the chart below.

The chart below shows the wide range of expenditure levels per learner, when assessing the ‘transactional’ cost of the MIS function by establishing the cost per learner. The wide range of costs is similar if you were to consider the transactional cost ‘per enrolment’ rather than ‘per learner’; though most colleges believe that the key driver of MIS costs is the learner.

And to confirm the earlier comment about quality of service, this is what the Inspection Report of College 2 in the above chart said about the quality of data and MIS at College 2 which is an ‘outstanding’ college as judged by Ofsted:

“Data are accurate and accessible. Staff at all levels are able to access very detailed and useful information with which to judge the progress and outcomes of their courses. The performance management of staff is equally effective.”

The wide range of costs in the chart means that there is potential for average savings of some 60 per cent in MIS costs if all the other colleges were to structure their MIS function in line with College 2.

In cash terms the research shows an average cost benefit per college of circa £500,000. And at the lowest quartile there would still be potential savings opportunities of some 33 per cent representing £250k per college. This suggests that there are significant opportunities for colleges to reduce some of their back office costs without moving to a shared service solution.

Do you know what the transactional cost of your MIS function is (or any other support function) or how it compares to those of other colleges? Maybe a transactional cost analysis of your support functions would be a good place to start when considering the challenges of next year’s allocation.

Gary Williams
Director of FE & HE Services, Tribal

The FE sector is starting to see the impact of the budget cuts that were imposed for the year 2011 – 2012, while according to statistics from UCAS, the number of applications from English students to attend university has declined by around nine per cent compared to the previous year.

For FE establishments, this is a double-edged sword – the drop in school leavers going to university should represent more potential students that wish to take part in FE courses and vocational work. However, it also puts more strain on IT systems and resources for supporting these students.

The adage over the past few years across public sector IT has been to “do more with less” and this continues to be the mantra for the foreseeable future. The main consideration therefore has to be around how colleges can use IT to support service delivery more effectively, as well as how these IT networks can be managed at lower cost to the organisation. Systems management is therefore a key point for the future.

Keeping IT up to date is a challenge. All FE students will require at least some access to IT assets, from occasional use of desktops and laptops for students on vocational courses to those that require full suites of digital resources for creative projects or coursework. Behind all these devices is an IT team that has to manage the network, keeping these endpoints updated and secure.

Around 80 per cent of IT budgets are dedicated to [the] bread and butter work”

This ability to ‘keep the lights on’ involves day-to-day administration work such as patching applications, installing updates and checking that machines are all secure. According to IT analyst firm Gartner, around 80 per cent of IT budgets are dedicated to this bread and butter work, covering license fees, staff time and general maintenance. Any activity that can reduce the time spent on managing systems is therefore a good candidate for consideration when it comes to cutting costs.

Looking at how you manage desktops from a power perspective is a good idea. For many colleges, they will have at least one ICT suite as well as desktops available for students to use outside formal lessons and in communal areas like libraries.

Depending on the college, these desktops could be on all the time in preparation for students. If this is the case, the likelihood is that they are then idle overnight while still consuming power, which represents a significant cost in just power consumption.

There are two potential routes to take here. The first is to prepare a general policy for users to adhere to around turning off machines when they are not in use.

The second alternative is to implement a power management solution that automatically powers down machines when they are not in use. While it would cost money to implement this, the cost savings that can be achieved can be assured.

Further education organisations will undoubtedly come under more pressure this year, as student numbers are expected to rise while budgets remain either static or get cut. However, there are opportunities to continue developing how IT assets are delivered and managed so that teaching services – and ultimately, student support – does not suffer because of these changes.

Seann Gardiner
EMEA Sales Leader, Dell