University budgets are now under unprecedented pressure, driven by a range of policy changes and market forces. Many institutions are implementing wide-ranging cost reduction efforts, with some aiming to cut costs by as much as 12-15% to avoid significant budget deficits. This critical juncture offers an opportunity for the sector to reflect on past experiences and learn from those who excelled during challenging times.
The COVID-19 pandemic forced universities to take extreme measures, and while many struggled, some leaned into the challenge, pivoted, and thrived. The AptoNow team partnered with several universities during this period to implement best-in-class approaches to service efficiency, achieving leaner, more agile operations. With many universities facing similar challenges today, we sat down to reflect on what differentiated the universities that thrived and emerged stronger from COVID-induced changes.
We perceived that the most successful institutions during this period did four key things well, which have strong relevance today: 1. Focus on proven, data-driven cost reduction levers – successful institutions focused on strategies that had a strong evidence base, with a clear path to implementation and relatively rapid realisation of financial improvement. They avoided strategies that were speculative, or depended on significant technology investments that would take years to deliver. For example, we worked with one institution that focused on improving efficiency in professional services. Leaders focused exclusively on four key functional areas where benchmarking showed that resourcing was unnecessarily high compared to peers, and could be reduced with minimal impact to service quality. As a result of this careful prioritisation, the university was able to develop robust, detailed improvement plans in these four areas that could be implemented effectively.
2. Build a wide and deep coalition to sustain support for change – successful institutions moved quickly to involve a broad coalition of key staff in the design and development of changes. However, this was only done once there was senior leadership alignment around the nature and scope of efficiency improvements. For successful institutions, it was critical to use early discussions among the senior leadership team to flush out key issues and potential challenges, before going to a wider audience. For example, the senior leadership team at one institution decided not to pursue complex changes to its Technical Services resourcing model through the COVID-19 period – because there was no proven model for successful reform, and therefore a lack of alignment on how best to approach the solution. This is one example of a sensible up-front decision about scope that saved a lot of time and heartache later on.
3. Anticipate roadblocks and "see around corners" – the most successful institutions “saw around corners” and were able to anticipate the most common roadblocks to implementation of changes. This included, but was not limited to, industrial relations strategies and workforce engagement around potential redundancies. One institution we worked with was extremely proactive in its industrial strategy, working closely with relevant unions throughout the process, but also communicating directly to staff. This drove a successful outcome because the institution had a clear industrial strategy from the outset, and shaped cost reduction efforts around these parameters rather than just taking a “hit and hope” approach.
4. Drive implementation and follow-through on delivery – successful institutions focused as much, if not more energy, on the implementation phase of improving efficiency. They built early momentum by finding ‘quick wins’ in cost reduction through changes like reducing the use of consumables and renegotiating better deals with suppliers. They also established mechanisms to track the delivery of longer-term efficiency projects, assigned clear accountability and followed up throughout the process. For example, one institution established a temporary ‘Project Management Office’ which checked-in weekly with Stream Leads across the institution, to ensure that projects were being delivered. This follow-through ensured that staff had confidence that processes were genuinely being made more efficient, rather than resourcing being reduced and them left to just “deal with it”.
Successful institutions were able to use these four key best practices to reduce cost and emerge from COVID-19 stronger and more resilient. Universities facing similar budget challenges today are well-placed to learn from these lessons and embed best practices into their approach.
At AptoNow, our goal is to empower universities with the tools and insights needed to navigate financial challenges effectively while preserving their core mission of education and research. Contact us today to explore how we can support your institution in achieving sustainable cost efficiency.
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