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policy & reform
Monish Paul
in revenue of $ 33 million. Today our development team consists of around 50 people, but we now raise around $ 80 million in revenue.”
Professional services firm Deloitte Australia believes that universities have three‘ value creation’ levers at their disposal.
“ These are firstly, ensuring revenue growth and diversification; secondly, focusing on their operating margin; and thirdly, putting in place initiatives to ensure asset optimisation, all supporting a clear and differentiated teaching and research strategy,” said Monish Paul, Deloitte Australia’ s lead partner, education sector.
“ Successful universities are those that look at all three levers from a holistic perspective, and have executable strategies targeted at optimising each of them.
“ Universities continue to face‘ margin squeeze’ as costs increase whilst revenues remain flat. Universities need to constantly look at optimising their cost-to-serve base by improving all professional services functions such as human resources, student administration, research and academic administration and technology, to name a few. Successful initiatives are those that are looking at transformational models around the service delivery, process re-engineering, optimising technology to automate processes and increased focus on people capacity and capability,” Paul said.
He also points out that universities are way behind the commercial world when it comes to asset optimisation as most have massive land and infrastructure holdings.
“ In the higher education sector, it is fairly standard to see returns of around 1.5 per
cent to 2 per cent on capital assets which are significantly less than in the commercial world,” Paul said.“ Those looking to increase their rate of return are looking at‘ on campus’ commercial developments such as student and / or residential housing, the creation of commercial precincts or industry specific hubs that are linked to key research areas of strength.”
Deloitte is a big believer in business becoming more involved with universities, believing that both parties would benefit.
“ Whilst there is much activity in this area, more can be done,” Paul said.“ Whether it is through scholarships, partnering in research projects, engaging academics as consultants or contributing towards capital assets, such as school buildings and facilities( and in turn owning a share of the asset as an investment or through different financing techniques such as PPPs).
“ Unique investment vehicles are being explored in some overseas countries such as social bond, which may need further analysis in an Australian context.”
The search will continue to seek alternative avenues of revenue outside federal government funding and international student fees. That search needs to be at a quicker pace. n
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THE ETHOS RESEARCH LEADERS FORUM
www. campusreview. com. au March 2013 | 17