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 group? 5 5 Can you eliminate an expense item through automation or alternative solutions? source of reinvestment cash (Deloitte, 2019). (Deloitte, 2019) 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 business. 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 hidden savings? 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 the market? 5 5 Are you sure your supplier invoices are accurate and aligned with contracted pricing and payment terms? 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 valuable insights? 5 5 Are there opportunities to improve quality for your students while reducing your environmental footprint? 5 5 Are you running cost reduction initiatives like a project with clear roles and responsibilities, and with the right experts onboard? Conclusion 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 expenses. 5 5 Cost optimization should be run as a project with clear actions and responsibilities. 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. References Deloitte. (2019). Deloitte's 2019 Global Cost Survey: Save to Transform. Retrieved from Deloitte: https://www2.deloitte.com/us/ en/pages/operations/ar ticles/global-cost- management-survey.html Expense Reduction Analysts. (2020). Navigating Stormy Waters. Retrieved from ERA: https:// en.expensereduction.com/navigating-stormy- waters/ Ministry of Education, UAE. (2020). Open Data. Retrieved from UAE MOE: https://www.moe. gov.ae/En/OpenData/pages/home.aspx 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. Email: HMahdy@expensereduction.com Class Time Term 3 Apr - Jun 2020 45