Teach Middle East Magazine Apr - Jun 2020 Issue 3 Volume 7 - Page 44

Sharing Good Practice SCHOOLS, OPTIMIZE YOUR COSTS AND RELEASE HIDDEN CASH WITH THIS PRACTICAL ADVICE BY: HATEM MAHDY of students increased only by about 2% (MOE, 2020). Some schools were able to attract more students, but most struggled to maintain student counts in this competitive environment. On average, schools lost over 100 students to competing institutions last year. Furthermore, while parents cheered the KHDA decision to freeze Dubai private school fees for the academic year 2020-2021, Principals and Heads of Finance felt the pressure of shrinking profit margins. R egardless of your long-term ambition, most educational institutions will need to turn towards cost optimization. Resources are already overstretched to meet the demands of a volatile environment. Which means that administrative staff may not have the capacity or expertise to manage all costs and suppliers effectively. This is the first of a two-part article explaining why schools and universities need to get better at cost optimization, where some hidden savings can be found, and what practical actions can lead to successful cost reduction projects. Welcome to the New Normal As I was writing this article, the UAE Ministry of Education tweeted a 4-week closure of all schools and universities as a precaution against COVID-19. Institutions scrambled to execute Crisis Management plans, including activating distance learning channels, where available. Those lacking digital communication and training capabilities had to tap into their emergency funds to buy the necessary tools, set them up and train staff to use them. They had only a few short weeks to complete this huge undertaking. Their jobs were not made any easier by the hordes of concerned parents demanding information about everything from their children’s exams to changes in spring break schedules. I hope by the time you read this, that 44 Term 3 Apr - Jun 2020 the crisis will have subsided and that life will be back to normal. Well… the new normal. Whether it is the threat of a global pandemic, market turbulence, climate change, or disruptive technology we must recognize that our environment will continue to be highly volatile. Despite increasing demand for high- quality education for a growing population, the education sector is not immune to the impact of this volatility and uncertainty. For example, the latest statistics from the UAE Ministry of Education reveal a pressing situation for Private Schools. As the chart below shows, while the number of private schools in the UAE increased by almost 11%, the number The good news is that even when revenues are declining, schools and universities can still improve their bottom lines by implementing sustainable cost optimization strategies. Cost Optimization is Here to Stay According to the latest global survey from Deloitte, cost reduction continues to be a key component in most organizations’ business plans. For businesses adopting a defensive approach in these turbulent times, cost reduction is likely to be the dominant strategy for maintaining profit margins. On the other hand, businesses opting for a growth strategy need extra cash to fund their expansion initiatives. For them, cost reduction is an essential Drop in Average Student counts in UAE Private Schools MOE, 2020 Class Time