• Huron Companies
    • Innosight
    • Studer Education
  • Submit RFP
  • Careers
  • Technology Partners
  • Contact Us
  • About Us
  • Favorites
Huron Logo Huron Logo
  • Expertise
    • Business Operations
    • Care Transformation
    • Consumer Transformation
    • Digital
    • Organizational Transformation
    • Research Enterprise
    • Strategy & Innovation
    • Upcoming Huron Events

      View Events
  • Industry
    • Education
    • Energy & Utilities
    • Financial Services
    • Healthcare
    • Industrials & Manufacturing
    • Life Sciences
    • Public Sector
    • See All
    • We collaborate with the best and brightest in technology.

      Learn More About Our Partners
  • Our Experts
    • View All Expert Bios
    • Find an expert specialized in your industry.

      Book a Speaker
  • Insights
    • Articles
    • Case Studies
    • Research
    • Get the latest insights and updates from our experts.

      View All Insights
  • Investor Relations
    • News
    • Events
    • Financial
    • Stock Info
    • Corporate Governance
    • See All
    • Learn more about Huron and our most recent financial results.

      Investor Presentation
  • Contact Us
  • Expertise
    Expertise
    Business OperationsCare TransformationConsumer TransformationDigitalOrganizational TransformationResearch EnterpriseStrategy & Innovation

    Upcoming Huron Events

    View Events
  • Industry
    Industry
    EducationEnergy & UtilitiesFinancial ServicesHealthcareIndustrials & ManufacturingLife SciencesPublic SectorSee All

    We collaborate with the best and brightest in technology.

    Learn More About Our Partners
  • Our Experts
    Our Experts
    View All Expert Bios

    Find an expert specialized in your industry.

    Book a Speaker
  • Insights
    Insights
    ArticlesCase StudiesResearch

    Get the latest insights and updates from our experts.

    View All Insights
  • Investor Relations
    Investor Relations
    NewsEventsFinancialStock InfoCorporate GovernanceSee All

    Learn more about Huron and our most recent financial results.

    Investor Presentation
  • Careers
    Careers
    Join Our Talent CommunitySearch Open PositionsBenefits
  • About Huron
    About Huron
    The Huron DifferenceOur People & ValuesMaking an ImpactOur ResultsInvestor RelationsLocations
  • Help & Support
    Help & Support
    Contact UsSubmit an RFPBook a Speaker
  • Privacy
    Privacy
    Privacy StatementTerms & ConditionsCookies PolicyFraudulent OffersLabor Condition Applications
  • Contact Us
  • Favorites
    Recent Favorites
    You have no saved content.

Efficiency and Cost Reduction: What to Stop Doing

Favorite Bookmark

Mark Finlan, Jonathan Krasnov

Email Subscribe Print

Universities are frequently seeking ways to “get more efficient.” Generally, that is code for “we need to cut costs.” But often institutions want to reduce their costs without giving up much in the process and want as little disruption as possible. Even in the wake of the Great Recession, universities averted material structural change through revenue relief. Efforts such as strategic sourcing, business process redesign, decreases in service provision, and slow decreases in staffing levels represent the promise of assembling small pockets of savings into cost reductions. Such efforts also represent an aversion to tough choices related to the institution’s portfolio of activities, programs, and operations.

Huron has outlined a framework for higher education’s evolution through the COVID-19 pandemic and its economic impacts. Below we outline some methods for evaluating and potentially stopping activities aligned within the phases of an institution’s response.

STABILIZE

Shift resources to achieve stabilization

  • Benefits
  • IT Applications / Licenses
  • Student Activities
  • Leases
  • Underperforming Food Operations
  • Health & Wellness Programs

Eliminate “Nice to Haves” and Reduce Discretionary Spending

The misconception about “administrative bloat” at a university is that institutions have hired more staff to support the same output. The growth of support costs, however, has often been driven by an increase in what universities provide beyond the core academic and research portfolios, such as: increased student services, more co-curricular programming, proliferation of centers and institutes, new facilities, among others. Few would argue that any of these investments negatively contribute to the student experience, learning opportunities, interdisciplinary collaboration or to the overall prestige and attractiveness of the institution. Yet, Huron finds universities don’t often engage in a holistic tracking of these endeavors, or a disciplined review of their cost versus measured impact.

TRANSFORM

Implement change to ensure long-term success

What Can We No Longer Afford to Do?

Examples:

  • Athletics Teams
  • Centers & Institutes
  • Extra-curricular Programs

Huron recommends starting with an inventory of operations and programming, and their associated direct costs, for review through the lens of corresponding impact. Huron thinks about this type of review through a simple framework: breadth of impact and depth of impact. Breadth refers to the number of students, faculty, or community members impacted by a program or operation. Depth refers to the actual impact that program has on in individual or community (often qualitative). This impact score is tied to the direct and indirect costs to develop a return-on-investment (ROI) metric. The reduction in “nice to have” activities may lead to immediate savings in the form of compensation of staff supporting the program, elimination of leased or rented space, and recurring purchases of goods and services that support the operation’s or program’s objective.

Make Some Tough Decisions

During Stabilization, institutions should charge leadership with evaluating the full inventory of programs and activities with an agreed upon framework for ROI in mind. Where can we scale back without creating risk? Where can we decrease our investment with limited impact on quality or standards of service? When can we determine a program is non-essential? Huron anticipates that these operations are part of portfolios or ecosystems with potential dependencies or secondary impacts. The time horizon, therefore, for these reductions or restructurings is likely longer – six to 18 months – because unwinding the operations is more complex and the change management challenges require greater care.

Unlike efficiency projects aimed at maintaining the same level of output with fewer resources, these tough decisions are focused on asking which aspects of core support portfolios “can we stop doing” without creating a need that will require reinvestment down the road. This will likely include a wide array of activities such as benefits programs, student activities, duplicative IT applications, and underperforming food operations.

This is not to say scaling back these activities would not have impact, potentially a negative impact, but they represent better alternatives than further threatening enrollment, cuts to the academic enterprise, or sacrificing investment in research.

Transform: (Re)Evaluate “Sacred Cows”

Evaluation of some areas may extend beyond the stabilization phase and can be considered more transformative to the university when programs are considered which are closer to core mission or may be traditional “sacred cows” like athletics teams or (highly subsidized) centers and institutes. Such examples highlight the need for this process to be frequent and repeated.

Evaluating and then continually reevaluating the impact of programs and operations should not just be part of a crisis response, but rather be a regular and core practice of institutional management. Growth of programs, support operations, and services are commonly in response to evolving demands and expectations. However, universities are too resource constrained to allow for “check the box” investments. Resource allocations need to be measured against objectives and effectiveness, because expense growth represents opportunity costs to core programs, research capabilities, or affordability.

For most universities, this evaluation and accountability to defined metrics will represent a material culture shift. The first step in building these organizational muscles is defining who will own this responsibility and how decisions will be made and executed. Regular evaluation should take place within disciplines or functions, but then need also to calibrate across campus. These efforts need to be informed by data and analysis, which is likely to include peer benchmarking or industry research, evaluation of funding sources, review of the university’s portfolio for complementary or redundant efforts, and a reassessment of the objectives in the current environment. Of course, the most important element of a new commitment to evaluation will be that those evaluations are supported with transparent and meaningful action.

Call to Action: Time to “Stop Doing Some Things”

Make a comprehensive list of non-core programs, operations, and activities. Highlight those activities that have been affected as part of recent campus shutdowns and begin the evaluation process with, “What if this activity never restarted?” or “What if we only invest at 50% of our prior levels?” Would the institution be materially worse off without that conference? Will alumni be less engaged without that one extra “lifetime engagement” program? Will employees still be fairly compensated if we sunset that benefit program? Will students still enroll if we eliminate that extracurricular activity? These are tough questions, but ones that need to be asked and data collected where possible to forecast the answers needed for decisions. It is never easy to shift course, to say that a program or activity is not “impactful enough,” but the world of higher education is transforming, and more revenue cannot be the only solution for universities to rely upon. In fact, in the history of growing for-profit or not-for-profit enterprises, it never has been.

Access other educational resources on our COVID-19 resource page. For more information, contact us.

Favorite Bookmark
JS Inject Email Subscribe Print
Business Operations Education Private 4-Year Institution Public 4-Year Institution Community College For-Profit Institution

Efficiency and Cost Reduction: What to Stop Doing

  • Mark-Finlan

    Mark Finlan

    Managing Director

    Contact This Expert Read My Bio

Related Work

  • Resources for Higher Education Leaders Navigating COVID-19 Response

    Read More

    Huron has assembled the resources you need to address all stages of your institution’s response to COVID-19.

  • The Path to Operational Excellence

    Read More

    Having a lower cost position is an advantage, and the ability to make quick, data-informed decisions better positions institutions to respond to change.

  • Clarify Your Institution's Financial Picture

    Read More

    Institutions need comprehensive budget planning models that deeply engage stakeholders with the right set of data and incentives.

  • Enterprise Risk Management

    Read More

    Effective enterprise risk management involves the comprehensive evaluation of interconnected risks across an institution.

  • Enhancing Organizational Effectiveness

    Read More

    Institutions can no longer risk inefficient decision making or the deferral of projects that can significantly improve organizational effectiveness.

  • Workforce Management in the time of COVID-19

    Read More

    As colleges and universities continue to assess the financial and operational impacts of COVID-19, they are evaluating options for managing their workforce.

View All

We use cookies on our website to provide you with a more personalized digital experience, enable website functionality and understand the performance of our site. You may review our Privacy Statement and our Cookies Policy. By using this site you agree to our use of cookies. I Accept

  • Expertise
    • Business Operations
    • Care Transformation
    • Consumer Transformation
    • Digital
    • Organizational Transformation
    • Research Enterprise
    • Strategy & Innovation
  • Industry
    • Education
    • Energy & Utilities
    • Financial Services
    • Healthcare
    • Industrials & Manufacturing
    • Life Sciences
    • Public Sector
  • About Huron
    • The Huron Difference
    • Our People & Values
    • Making an Impact
    • Our Results
    • Investor Relations
    • Locations
  • Help & Support
    • Contact Us
    • Submit an RFP
  • Careers
    • Search Open Positions
    • Join Our Talent Community
    • Our Commitment
  • Legal
    • Privacy Statement
    • Terms & Conditions
    • Studer Education: Subscription Product Terms of Use
    • Cookies
    • Fraudulent Offers
    • Labor Condition Applications
Huron Logo
  • LinkedIn Icon
  • Twitter Icon
  • Facebook Icon
  • Instagram
  • Youtube Icon

© 2022 Huron Consulting Group Inc. and affiliates. Huron is a global consultancy and not a CPA firm, and does not provide attest services, audits, or other engagements in accordance with standards established by the AICPA or auditing standards promulgated by the Public Company Accounting Oversight Board (“PCAOB”). Huron is not a law firm; it does not offer, and is not authorized to provide, legal advice or counseling in any jurisdiction.