As with many universities at the moment, there's a lot of financial headwinds impacting financial performance for Middlesex University. We hear from Executive Director of Finance, Andrew Corti, and Head of Management Accounts, Tom De Val, as they explain how using a benchmarking approach has made things that little bit clearer, and given them the tools to be more proactive when it comes to managing the university’s cost-base.
Achieving project buy-in across the university
Middlesex University ran their Etio (formerly Tribal Education Services) Benchmarking project in Spring 2022, to help tackle the prevalent headwinds by taking a more proactive approach to the university’s cost-base. Executive Director of Finance, Andrew Corti, explains how he framed the exercise with the university’s management team.
“I felt that undertaking a benchmarking exercise with Etio would provide some valuable pointers. As part of my recommendation to the senior management team I wanted to be very clear up-front about what benchmarking is and how it works. One of the key messages that I wanted to get across was it doesn't necessarily provide you with the answer. What it does is provide good material for good conversations.”
A regular counter to running a benchmarking exercise is that inevitably a university’s departments won't map exactly to the departments in the Etio model, but for Andrew, this is actually a key benefit.
“That’s sort of the point - an advantage of that is you then get a feel for what functions or activities may be spread across different areas, and that in itself is an area for discussion and review.”
(The Etio Benchmarking model overcomes different organisational structures and sizes by categorising all data using a proven “function driven” model.)
Having laid the ground-work ahead of Etio's Benchmarking team coming in to gather the data, understanding amongst the university’s staff was already high. Tom De Val, explains how stakeholder buy-in was increased further by the Benchmarking team’s pre-project communications.
“I think the communications were quite clear as to why we're doing it. We have got a Finance Business Partner model in place where members of the management accounts team are business partners with a variety of services. There's a lot more understanding of the university’s financial position and people understood why we wanted to do the exercise. Our consultant, Katie, also helped in this regard, holding concise meetings to explain the process to staff, and covering it in a level of detail that meant people were happy the data collection process was thorough and being quality assured. So, it was a case of good quality information going in from the start - the process was definitely positive.”
Etio's benchmarking team do all the heavy lifting of data gathering and validation, applying it to the Etio model that allows for like-for-like comparison, and then reporting the results back to the university stakeholder group via detailed presentations to ensure the results are fully understood. Additionally, a Benchmarking portal is also provided to enable further independent analysis and interrogation of the results.
Increasing impactful discussion through widened access to granular data
The positive engagement developed from the start of the project continued through to the reporting phase, with not only Andrew, Tom and the Management Accounts team using the Benchmarking portal to further interrogate the data. The Provost was also keen to get access in order to drill-down themselves into the results for the different faculties using their wider perspective across the university to better understand the results. Unsurprisingly, having run Benchmarking at previous universities, the Chief Operating Officer also had a keen interest in accessing the results via the portal, explains Andrew.
“Our COO was quite keen on drilling-down into her own areas and having more of a look at some of the areas of variance against benchmark in order to unpick some of the contributing factors. So, harnessing that cross-university buy-in, the understanding and the ability to access the results via the portal, was great - it helped people be able to effectively ask the right questions, but also to interrogate the data to find some of the answers for themselves. Without this, they may not have got round to asking the questions in the first place. And of course, the Management Accounts Team and I also use it to answer our own questions and those from staff without access. As a business intelligence tool, it’s user-friendly and intuitive to use, and being able to drill-down so easily into the detail is a really good development for Etio's Benchmarking”.
“Having the portal just means that we've got access to the granular data behind everything. So, people can actually go in and analyse and have a look at what is underpinning the data rather than us just telling them that the benchmark says they're 3 FTE over or under the peer group. People can quite easily go in and actually see who is being counted in that FTE count, where they sit, which function they're working in, and what they're doing. And that really enables us to very easily drill down into the analysis of the granular detail. That's a definite bonus.”
With such high levels of engagement with a central evidence-base as reference, Andrew and Tom have been able to engage in much positive debate across the university when it comes to discussing efficiency, performance, and the cost-base, with the latter being of particular interest. Through the exercise they found that, not in every case, but generally speaking, Professional Services were well-aligned to sector benchmarks, and actually it was some of the academic teaching delivery costs that showed the wider variation from benchmarks. This has enabled them to focus very much on those aspects, but also points towards some areas that were potentially under-resourced.
At the time of the exercise, the Chief Operating Officer, suspected that in some cases there were resources in the wrong place that should be reallocated to other areas. Etio's benchmarking took the speculation out of the debate, identifying the areas in question, supporting some assertions, and providing the granular analysis to inform the right conversations.
The Benchmarking exercise also revealed other aspects of operations they could act upon, giving Andrew and Tom them a good feeling for the size and shape of our estate - the impact of their compact campus came through quite clearly in their relatively low estates costs, which proved useful insight, and generated a lot of meaningful and actionable conversation.
For Andrew, as with other university finance leaders, and as framed from the very outset, it is critical the outputs of the benchmarking analysis are used as part of the wider discussion, helping bring about change in an evidence-based, objective manner.
“And that's the way it's been very much treated, and as such people have really bought in to the process, at all levels in the university – embracing the concept of looking at the data, analysing it, and then using it to make an informed decision based on our priorities. That may be strategic priorities that we want to resource slightly more heavily or vice versa. But it's certainly generated useful conversation – some of which would otherwise have been more difficult or more nebulous to have - and more than that it's generated some useful action, so the exercise has definitely provided us with big benefits.”
Importantly, the longevity of the benefits of benchmarking is something not to be overlooked - the analysis continues to be referenced by multiple budget holders and stakeholders as they go into the budgeting rounds for 2023/24. Tom observes how the clear, shared view afforded by Benchmarking means conversations are taking place that would have been unlikely in previous iterations of budget rounds.
“So, it all adds up - it's part of the mix of getting broader financial information out to Faculties and Professional Services, and in particular we've done a lot of work with Faculties to make the income side much more visible to them than it ever was before. It's all part of the jigsaw.”
The financial position of universities is regularly in the spotlight of the press as institutions continue to battle the headwinds of ever-increasing cost-bases driven in part by high inflation, combined with fixed UK fees. Through the university-wide commitment to benchmarking, and a collaborative, evidence-based approach to the ensuing conversations, Middlesex University has taken a more proactive approach to its financial health, in turn strengthening itself against those headwinds and making highly informed decisions to protect and improve its financial performance in years to come.
To understand what more a financial benchmarking project could do for your specific institution, get in touch with the Etio HE Benchmarking team today.