Benchmarking to inform future transformative change
Financial benchmarking is used by our clients in a variety of different ways: to inform strategic planning, to provide an objective health check of the cost base against sector norms, and - as one might expect - to identify opportunities for financial efficiencies or investment.
UK universities are under pressure to make some challenging decisions quickly. Our clients are using benchmarking not only to provide a robust basis to measure and compare current costs, but also to look forward, inform future size and shape, and make informed decisions about where costs could be reduced. Below are a couple of (anonymised) case studies showing how this is working in practice.
University A is a regular benchmarking client, typically completing a biennial benchmarking review. Benchmarking has been well socialised across the university and data has been used periodically to inform planning and budget setting processes, as well as to evidence where investment in key professional services has been needed.
The university is undergoing a major transformational change project, looking at size and shape across the whole organisation. As part of a toolkit of data providing insight to inform the project, they have engaged in a benchmarking review using the 2023/24 financial outturn data as the starting point. Our contact and discussion with university colleagues is with a central knowledgeable team. It was agreed that limiting contact across the wider university was the most appropriate approach, due to sensitivities associated with the ongoing transformation project. However, working with an experienced central team ensures that the level of detail required to benchmark robustly is maintained.
The 2023/24 outturn data will be categorised according to Etio definitions. Following this, a snapshot of current mid-2024/25 data will be taken and the Etio model applied. The benefit of this approach is to ensure that a complete set of financial and staffing data has been robustly analysed, whilst also modelling current data against sector norms to provide the university with the most up to date picture of cost structures to inform decision making.
The university plans to use the benchmarking data alongside other information sources, such as capability modelling, to produce an evidence base and insight to inform the wider project reviewing organisation size and shape.
University B are a long-standing client, typically engaging every 3 years. Facing a significant decline in international student numbers the university decided to engage in a benchmark review of 2022/23 data. Although the university had undergone a period of change, it was agreed that this would provide a strong position for measuring change going forward, applying context to the data where changes had already been made.
In autumn 2024, when the university had a clearer idea of student numbers for the current academic year, Etio engaged with them in a follow up piece of modelling work to help provide a clearer picture of how they compared to other universities given their anticipated reductions in student numbers and income for 2024/25. To resize the comparisons appropriately, modelling was applied not just to income, but to student and staff numbers to provide a robust basis for calculating benchmark data and to show how much resource was used in comparator institutions based on revised outputs.
The university have been using the modelled benchmarking data to inform their budgeting processes and planning discussions on cost optimisation, targeting professional service areas to reduce costs by aligning more closely with Etio benchmarks to address the shortfalls expected due to declining student numbers and therefore income. Professional services were the focus of the exercise, however alongside this the university have been completing a detailed academic size and shape review.
Get in touch to find out how we can help provide scenario modelling and forward-looking benchmarking analysis to inform your change management and strategic planning process.
