It’s not news that the higher education sector is experiencing significant change. Whilst the sector could say it’s been navigating change for years, there is something more pressing and critical now, partly due to the fall in international and post graduate intakes in 2024. Before this, the media was already reporting many institutions in trouble and sector commentators have underlined that there is a bumpy ride ahead. Institutions must manage changing student demand and the impact on their financial position, regardless of whether government considers raising the tuition fee cap.
Institutions are scenario planning for an unclear future with no confirmed direction on upcoming policy direction. Many are already taking tactical cost cutting measures and reducing staff numbers in response to current financial challenges. But this degree of change also presents opportunities to think differently, to identify and remove inefficiencies and to strength your university. The more adaptive and transformational changes some commentators are predicting may well primarily be in relation to mergers, shared services and the development of much more flexible and digitally informed provision.
At the SUMS Conference The ultimate balancing act: Cutting costs, driving growth on 14 November 2024, we will be exploring how institutions can think differently.
The tools and techniques to deliver significant recurrent savings are tried, tested and evidenced by best practice. Methodologies including Stop: start: continue analysis, top ten hurts exercises, zero-based activity design and rapid improvement events are a great starting point. When used with the strategic intent to realise meaningful, long term change they are hugely effective in enabling institutions to think differently. SUMS Consulting is working with institutions interesting in using these techniques which enable institutions to become more operationally efficient.
But what about the bigger picture? Where institutions are considering more significant change and the potential for working with other institutions, there is a continuum of options which runs from deep collaboration, through shared services and into merger. This could include the opportunities to be gained from Special Purpose Vehicles (SPVs) or changes in technology such as shared systems and joint ERPs. It might mean working with the NHS as much as other local educators and as we see greater institutional differentiation, this could start to drive evolution of the current systems for national pay bargaining in the sector.
And therein lies the leadership challenge – delivering change at this scale is reliant on good-quality strategic conversations. Staff and trade unions will need to be taken on a cultural journey and there will potentially need to be alignment in structures, policies and governance. Thinking differently means planning carefully and communicating well.
If we thought differently about our options when responding to current challenges where could that take us? Would we create thinking space to address known process issues and pain points? What can we learn from other sectors, or from other HE systems internationally (for example the recent Adelaide merger)? Would we redevelop business models starting with design principles and realising quantifiable improvement and efficiency by maximising automation? Would we be radical enough to widen use of special purpose vehicles and other commercial techniques to reduce our costs, resolve some of the current uncontrollable pensions and demographic shifts and protect our core activities? Would we set up high quality shared services for multiple institutions operating in the same city? Would we consider merger where it makes sense for the academic portfolio or creates the right profile/critical mass?
We hope you will join us to consider these issues on the 14 November.
Dr Rhiannon Birch, Principal Consultant, SUMS
Paul Boustead, Associate Consultant, SUMS
Helen Watson, COO, City St George’s, University of London
