Navigating Financial Sustainability Challenges in Higher Education

When an organisation’s financial sustainability is challenged, it must have the ability to innovate and change in response to the threat. Benchmarking reports can help identify priorities, but how do you tackle them?

The University Challenge

Universities are grappling with challenges threatening their financial stability and survival, including a government decision to freeze tuition fees until at least 2024/5. This, coupled with surging inflation, has eroded the value of fees to just over £6,000. To sustain educational excellence and academic research, universities must address rising costs and risks to key revenue streams.

The expansion of university services and administrative growth have led to disproportionate cost increases. Structural complexities and academic priorities contribute to rising administration costs. Attracting more students and improving quality amid cost of living pressures add to recruitment, admissions, and education delivery expenses.

Brexit has threatened access to EU funding sources, impacting access to research and HE funding. Reduced applications from EU students and increased competition for students and staff pose challenges – proposed reductions in tuition fees and global economic uncertainty further strain university revenues.

Unlocking the Potential in Administrative Services

University value streams heavily involve professional services, offering significant opportunities to enhance the student experience and reduce operating costs. Efficient processes adaptable to external changes can create an operating model that meets students’ and researchers’ modern, changing needs.

Unipart’s opportunity analysis report aids institutions in identifying and assessing improvement areas, such as optimising administration services, admissions processing speed and quality, process standardisation, and student experience enhancement.

Sustainable Change Approach

While short-term intervention projects can bring significant improvements, a lasting change requires a comprehensive approach. Focused interventions may fail to engage employees in new working methods, leading to a return to old practices. Unipart Consultancy’s approach emphasises sustained improvement, ensuring long-term benefits and cultural shifts (Fig. 1).

Fig. 1: Without a framework for sustaining change, the improvement can be lost as the ‘grass grows back’

Transformative Approach to Opportunities

Our approach envisions addressing priority opportunities by actively involving and empowering employees through a comprehensive change program. This ensures immediate improvements and establishes a lasting culture of continuous enhancement, fostering incremental gains each day.

Guided by Unipart’s principle of ‘managing with a long-term view,’ I advocate an approach that:

• Targets breakthrough projects for short-term wins, alleviating cost burdens and enhancing revenue short-term.
• Delivers professional services capable of efficient growth alongside the organisation.
• Cultivates internal capability for continuous improvement, ensuring sustained positive outcomes and long-term financial health.

Organisations should embed a culture of continuous improvement by incorporating five critical elements (Fig. 2) foundational to sustainable performance improvement.

Fig. 2: The five elements of embedding a culture of continuous improvement

In achieving upper-quartile operational performance and embedding continuous improvement, we assess the businesses across these five elements and evaluate the organisation’s capacity to sustain transformational change. A tailored transformational strategy and change roadmap (see Fig. 3) is then developed to ensure lasting performance improvements and the integration of continuous improvement practices within the organisation.

Fig. 3: The roadmap, using the five elements to drive the organisational vision

Success Story: A Prestigious Scottish University

A prestigious Higher Education Institution selected Unipart based on our proven track record in instilling continuous improvement skills across various sectors, including Higher Education.

The University pursued two main goals: improve the conversion rate of high-quality Postgraduate Taught (PGT) classes from offer to enrolment and cultivate sustainable internal continuous improvement capabilities for operational excellence.

Collaborating with their central Business Improvement (BI) Team, already adept in continuous improvement tools, Unipart Consultancy facilitated the team’s development through projects in the university’s finance function. Additionally, we redesigned and implemented a new PGT process.

After two years of monitoring the benefits of the PGT process improvements, the BI Team reported impressive results:

• 56% reduction in time to review applications and offers
• 80% reduction in application errors
• 31% increase in international student income
• The project delivered £4m for an ROI of 10:1

The success of the BI Team at this esteemed university has garnered multiple awards, resulting in £8 million in additional revenue, recurring annual cost savings, and an enhanced overall student experience.

In Conclusion

Change is inevitable, and the education sector is experiencing a significant shift, requiring creative solutions to cut costs and boost performance. At Unipart, we recognise universities’ challenges and propose an innovative approach to sustain high-quality education and research.

Our complete insight article can be accessed at: https://catalogs.unipart.com/view/977990720/

Or for insight on where efficiencies can be gained in your organisation, please contact Chris Dixon, +44 (0)7780 228 784, chris.dixon@unipart.com