About

The key to Sustainable Management is to explicitly link cost and emissions in the one enterprise operational model of organizations. This provides the detailed data required to enable the organization to transition to a lower emissions business model in a financially sustainable/profitable manner. The underlying methodology is a combination of Activity-Based Costing and Carbon Accounting, in this case using the E-Liability Methodology.

About

In 2020, the Commonwealth Government undertook reforms to the funding model for Australian Universities. The changes aimed at shifting student attention towards jobs the government deems nationally and regionally strategic e.g. teaching, nursing and STEM fields. The Government’s stated goal was to align funding with the average cost of delivery and it committed to reviewing the changes a few years after their implementation.

To provide a stronger evidence base, this project analysed an aggregated and anonymised data set from 11 universities to determine the full costs of delivering teaching for the different sub-disciplines of Engineering and Allied Health based on a range of different factors and variables influencing delivery.

Aim

The research compared costing data from a subset of universities; considered a range of variables and factors such as: across different categories of universities e.g. metro vs regional, large vs small; class sizes; faculties/academic units; and identified indicative efficient cost of delivery for different disciplines and sub-disciplines under different circumstances.

Consumers, shareholders, and other stakeholders have become increasingly aware of environmental concerns and are pressuring organizations to consider environmental issues and how they relate to the organization’s bottom line. Accurately quantifying the costs of environmental impacts and remediation efforts is a challenge!

Dr. Massy recently interviewed around 50 individuals at several higher education institutions across Australia to better understand what academics and administrators really need to support both their day-to-day as well as big picture decision making. He learned that academics want to be involved in the financial management of their institutions to ensure they are sustainable. In this white paper, Dr. Massy and Ms. Brooke explore the 11 shared data requirements uncovered during those interviews.

As Australian universities steer their way through a complex set of national and international changes and an emerging new higher education model, it’s the right time to consider how data helps support effective decision making in the disruptive marketplace. Intelligent data analysis has the potential to unleash a variety of financial and performance related benefits that can contribute to the future prosperity of Australia’s economy.

How can a cutting-edge university continue to deliver a superior education to a growing student population, in an era of reduced state funding? That is the question leaders of the University of California, Riverside (UCR) are actively seeking to answer with innovative new approaches today – and it is the reason that UCR’s Provost and CFO joined forces to implement an Activity-Based Costing (ABC) pilot initiative. ABC has emerged as a promising tool that introduces the potential to inform decisions about where and how to invest in order to better serve the needs of students – a way to answer the critical question of how best to deploy resources (people and funding) to achieve the educational mission. ABC is already a widely used practice in the business world, but has so far been used sparingly in higher education – primarily in Australia. At the same time, many leading thinkers in higher education have begun to advocate its adoption in the U.S.

This whitepaper serves as a final deliverable to the Bill and Melinda Gates Foundation (Gates Foundation). It documents the experience of designing and implementing the activity-based cost (ABC) management models at Johnson County Community College (JCCC). The whitepaper is intended to be a supplement to the University of California – Riverside (UCR) whitepaper – and is thus designed to compare the model development and implementation experiences at JCCC with those detailed in the UCR whitepaper. As a pilot project, lessons learned by JCCC may also benefit other community colleges in understanding the process undertaken to create and implement a cost management model.

Experience-based approaches for seizing opportunities and addressing challenges: Grant Thornton’s sixth annual State of Higher Education report. Of particular interest is Implementing Cost/Revenue Modeling for Meaningful Decision-Making. The paper introduces a way to gain a better understanding of business operations—the interlacing relationships among costs, revenues, activities, courses, programs, etc. The institutions most likely to succeed in this respect will effectively assess how their use and allocation of resources – such as facilities, class size and academic workloads – contribute to financial sustainability. All of this can be implemented in Pilbara Group’s modelling software and we are working closely with Grant Thornton in the United States.

Anyone concerned about how colleges and universities can remain viable, and indeed thrive, in the face of today’s many challenges should read this paper carefully. The ideas are profound and the recommendations are potential game-changers that challenge the conventional wisdom. They will help institutions transform themselves—in ways appropriate to twenty-first-century values, market conditions, and technology—to become better and more innovative.

A Guide to Making Activity-Based Costing Meaningful and Practical
The higher education industry and its observers have wrung hands over rising costs for years. While there are many reasons for escalating costs, there is at least one that higher education leadership has complete control over and could start addressing immediately. The fact of the matter is, there is almost a complete lack of visibility on how much it actually costs to deliver post‐secondary education and how those costs compare with the outcomes achieved. While the “measuring higher education outcomes” portion of the equation has been receiving growing national attention, the “cost to deliver” portion of the equation has received much less attention. Both issues must be addressed. Accurately measuring costs and comparing them with outcomes is one of the most important strategies that can be pursued in transforming the economics of higher education.