Martin OwenDirector of Consulting

1 March 2011

Financial benchmarking as an objective planning tool

Tribal Benchmarking: Suite 402, The Atrium, 20 Wollaton Street, Nottingham, NG1 5FWTelephone: 0115 934 7373

AgendaAgenda• Who we are

• What we do

• What is financial Benchmarking?

• What do our clients do with the results?

• Your thoughts, questions and views

Who we areWho we are• Established 1999

• Employs in excess of 2,000 people

• Commands over £238 million turnover

• Has over 2,500 clients

• >40% of HE institutions in the Benchmarking Databank (est. 1992)

• 42% of our work is in education

Core Principle… Function Driven ModelCore Principle… Function Driven Model

OVERALL UNIVERSITYAssociated Activities

Capital & Financing

Incomparable

Principal Activities

Schools/Faculties

Teaching Activity

Research & Enterprise

Activity

What is financial benchmarking?What is financial benchmarking?

Registry Staff Numbers

What do our clients do with the results?What do our clients do with the results?

Effort / time to returnEffort / time to return

Retu

rn o

n in

vest

men

tRe

turn

on

inve

stm

ent

LowLow HighHigh

Low

Low

Hig

hH

igh

Identify areas for immediate financial savings and investment

A London based University identified that their staff recruitment costs were over twice the benchmark for London universities. The University commissioned an

immediate review of this area and was able to identify savings of over £150k by renegotiating with suppliers and refining recruitment processes.

Quick Wins

A Northern University identified that their IT costs were around 30% (£1.8m) lower than the benchmark. Given the importance of IT to staff and students, the

University recognised the need to increase investment in this area as a priority and have targeted resources to this area. They have recently undertaken a follow-up

benchmark . The results show their costs remain below benchmark but the variance has fallen to c. 13%.

Inform strategic reviews of resource allocation across the University

The University planned to undertake a major corporate planning exercise and, as a precursor, needed objective

information and analysis to give a greater understanding of its cost base

“Tribal’s rigorous and replicable methodology has provided us with a base-point allowing us to confirm or challenge ‘taken-for-granted’ views, and giving us a useful picture of how we

compared to similar institutions.

The briefing sessions led by Tribal on the results of their work were greatly valued by senior managers and have enabled them to take a more sophisticated approach to planning, resourcing

and managing their area of responsibility.”Madeline Atkins, Vice Chancellor; Coventry University

Strategic Review

Link financial performance to key qualitative indicators and show progress

In 2005/06 The University of Salford were wanting to undertake a process of reviewing the league table position and investigate ways to

improve on current standing.

The University used the benchmarking information to review the current position relative to competitors and Tribal were invited back in 2008/09 to undertake another

HE benchmarking exercise with particular interest in the ‘distance travelled’ since 2005/06 and results of investment decisions made since the previous exercise.

The University was seeking to review cost base and remove areas of duplication of effort in order to maximise the effectiveness of support services.

Strategic Review

Thoughts, Questions and Views

• Tribal can help save the UK HE sector £2bn (8%)Tribal can help save the UK HE sector £2bn (8%)

• HE benchmarking experience since 1992HE benchmarking experience since 1992

• Consistent function-driven model providing robust comparisonsConsistent function-driven model providing robust comparisons

“I have now been involved in commissioning Tribal to undertake a benchmarking exercise in two universities. In both instances, I have found the exercise to be extremely useful in

informing decision making about the allocation of resources and their deployment across the institution.”

David Duncan, Registrar and Secretary; University of York