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Is there such a thing as a ‘light touch’ Financial Benchmarking project for colleges?

Is there such a thing as a ‘light touch’ Benchmarking project?

If the global pandemic has taught us anything, it’s that you can do pretty much everything ‘remotely’. Our benchmarking team here at Tribal had, even prior to March 2020, identified and committed to a more efficient benchmarking process, but what does this really look like and what does it deliver? FE college leaders share their recent experiences…

In our last benchmarking blog, 3 factors driving FE Colleges’ engagement with Benchmarking right now we explored the reasons behind the recent increase in FE colleges requesting independent analysis of their cost base and operational efficiencies. One of the reasons is the fact that benchmarking is no longer viewed as an onerous, time-intensive exercise – and is instead considered a strategic planning tool that derives valuable insights from college data in a clear and transparent way.

Whilst there will always be a time and a place for having benchmarking specialists onsite to kick off the project, oversee the data preparation, perform the analyses, and present findings back to different stakeholder groups – there are leaner approaches that can be employed to get all the benefits of benchmarking, without the overheads.

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John Hunt, Group Chief Financial Officer at London South East Colleges, recently shared in an interview: 

With all the changes that are coming through… we need to make sure that we are as lean as possible and that we are following trends in the sector”.

Here at Tribal, we also believe that we need to be as lean as possible, embracing advances in the way we can tailor and deliver our services in order to deliver optimum value to our customers.

In the past 12 months, all of our benchmarking projects have taken place remotely. We’ve been provided with the data we need for our granular analyses, run it through our FE specific model, prepared the narrative, and presented it back to leadership teams and other stakeholder groups – without setting foot in the college, with many FE colleges able to demonstrate how benchmarking is shaping their action planning within 6 weeks of kicking off the project.

This is particularly important for colleges that have a clear idea about what they need to include in their plans but are looking for objective, impartial evidence that supports their decision-making and provides a green light for action. For them, it’s less a journey of discovery; it’s a way to de-risk their strategy.

David Rothwell, Deputy Principal, Finance & Resources at Nelson and Colne College Group, adds that objective benchmarking is particularly important when it comes to difficult decision-making and action:

“It weighs heavily because we can be making decisions which significantly impact our people when restructuring and right-sizing are involved. These are matters you can’t take lightly and, I want to make sure that these decisions are as well-informed as they reasonably can be and that we focus our energies to best effect and don't miss obvious low-hanging fruit."

Furthermore, John Hunt, Group CFO at London South East Colleges shares why objective benchmarking helps with the transparency around public funding and value for money:

“One of the things that we are accountable for is the use of public funds, and this is of particular importance to our Corporation when signing our annual Financial Statements. Over the last couple of years, I have used the Tribal benchmarking data to supplement information from other sources as an indicator that the College is providing of value for money from the use of public funds.”

So, whilst Tribal’s approach is now very much a ‘lighter touch’ than it was ten, or even three years ago, the findings and learnings gleaned from engaging in benchmarking are often deemed ‘worth their weight in gold’ by the leadership teams that use them. And the scarce time and resources that were once needed from senior leadership teams during the benchmarking exercise can now be better invested in planning, and action, based on the insights. Julian Wood, Deputy Principal Corporate Resources at Wiltshire College & University Centre, concludes:

“It [Tribal Benchmarking] is external; it is consistent; it is objective and it is dispassionate. And it is therefore presenting information that is in a different way to what would happen if our finance team said it or sought to come up with it. It's that objectivity of putting our performance in the context of other people's performance that creates the dynamic that ought to lead to action, rather than just, “this is a nice piece of information, isn't it?” 

Senior college leaders on why they turn to Financial Benchmarking