Teach Middle East Magazine Apr - Jun 2020 Issue 3 Volume 7 - Page 45
Sharing Good Practice
5 5 Do you have multiple suppliers for
the same product or service? If so,
then can you consolidate this spend
with a single supplier at lower prices
and/or higher quality?
Top Defensive Business Strategies
5 5 If you are part of a group of schools
or have multiple departments
ordering separately then are you
getting the best deals for the entire
5 5 Can you eliminate an expense item
through automation or alternative
source of reinvestment cash (Deloitte,
The data also shows that while savings
targets generally increased versus
previous years, most businesses failed
to achieve these aggressive savings
(Deloitte, 2019). Organizations are
having to look for extra cash where
they did not need to look before.
Unless they invest heavily in their
procurement departments or get
external help, many organizations
simply will not have the capacity
or the expertise to deliver the cost
reductions needed to support their
What does this mean for Schools?
The same applies to the private
education sector. Institutions pursuing
a defensive business strategy will be
desperate for savings wherever they
can find them. Others looking to
expand and grow will also be looking
internally for extra cash to fund new
technology, facility improvements
or staff development. The largest
expense and the most obvious source
of savings in education is the cost of
teaching staff. Cuts in this category
need to be made with caution as they
are very likely to have a negative effect
on staff morale and capacity. This can
undermine an institution’s long-term
viability, let alone its growth prospects.
An alternative low-risk savings source,
which many institutions often do
not fully exploit, may be hidden in
the 20% to 30% operational and
administrative components of their
budgets. From classroom supplies
and printing to facility management
and IT, operational expenses are broad
and sometimes complex areas with
many solutions, specifications and
suppliers to choose from. Like most
rational businesses, schools focus their
resources on core education activities
and cannot justify extra staff with
technical expertise in every aspect
of operational cost management.
So, what can they do to seize these
The next section will offer a set of
questions to help you discover ways
of tapping into this trapped cash. This
will be explained in more detail in the
second part of this article.
Where is the hidden cash?
Start with these general questions
to uncover savings in almost any
operational spend category:
5 5 When was the last time you
negotiated contracts with your
suppliers for services such as
photocopying, classroom supplies,
and facility management?
5 5 Have you recently done any
research on alternative suppliers in
5 5 Are you sure your supplier invoices
are accurate and aligned with
contracted pricing and payment
5 5 Are your suppliers meeting service
levels and specifications?
5 5 Do you use an online procurement
system and a standard catalog to
streamline your process and to get
5 5 Are there opportunities to improve
quality for your students while
5 5 Are you running cost reduction
initiatives like a project with clear
roles and responsibilities, and with
the right experts onboard?
5 5 Regardless of a school’s long-term
ambition, most will need ongoing
cost optimization to fund growth or
protect profit margins.
5 5 Institutions need the right expertise,
capacity and approach to deliver
cost reduction targets.
5 5 Schools and universities have many
opportunities for cost optimization
in low-risk, non-core operational
5 5 Cost optimization should be run
as a project with clear actions and
The longer you delay, the more money
you leave on the table. Start your cost
optimization project now and release
the pressure on your cash flow.
Deloitte. (2019). Deloitte's 2019 Global Cost
Survey: Save to Transform. Retrieved from
Expense Reduction Analysts. (2020). Navigating
Stormy Waters. Retrieved from ERA: https://
Ministry of Education, UAE. (2020). Open Data.
Retrieved from UAE MOE: https://www.moe.
Hatem Mahdy is a corporate veteran with over 20 years of international experience
in Fortune 500 companies. He is currently a consultant helping organizations
across various industries accomplish strategic goals through Cost Optimization,
Organizational Development, and Executive Coaching engagements. Hatem is
especially passionate about advancing education in the Middle East and Africa.
Term 3 Apr - Jun 2020