Academic
Portfolio
Modeling
Portfolio
Modeling
Fundamental Principles
All our services are designed with three important criteria in mind:
Efficiency
A competitive and increasingly complex educational marketplace places
stresses on institutional resources in many ways. At its heart, education
is a complex endeavor. It is also costly. The challenge for leaders in
higher education is how best to create a balance between academic
excellence, cost, and institutional integrity. Leaders require new tools to
help them determine what aspects of current systems are
indispensable, what elements can be modified, and how changes will
impact on the all-important factor of educational quality.
To even begin this exercise, some fundamental (and often difficult to
isolate) factors need to be identified:
Cost – determine what direct institutional costs are associated with
delivering the educational product. To be complete, such an analysis
should be able to identify cost per student, per credit, by faculty
member, by department, and by major. Typical attempts to develop cost
averaging provide limited insight, but typically hinder attempts at real
strategic planning.
Revenue – conduct the same level of detailed analysis for income,
making sure that figures are real dollars and account for individual
student institutional financial aid packages, etc. Broad analysis utilizing
standard or average tuition fail to account for differences in what
revenue individual students actually bring to an institution. The
interdependence of programs at an institution requires more careful
and detailed understanding of how revenues may be applied to costs.
Cost/Revenue Ratio – which permits an analysis of the fiscal
contribution or drain particular programs or majors place on institutional
resources.
Once these factors are specifically identified, institutional leaders then
have the basic tools need to examine what changes can be made to
enhance efficiency and to link those changes to longitudinal studies of
student and institutional outcomes.
Profitability
The analysis of cost/revenue ratios leads to issues related to the
optimization of class size, faculty load, student/faculty ratios and full-
time /adjunct ratios, etc. By creating a staffing model that is tailored to
individual programs and majors, academic leaders can project the
impact of targeted enrollment changes on staffing needs, and match
optimum student enrollment with controlled faculty costs.
Different programs have different costs associated with them—lab
intensive majors have significant limitations on class size, technology
intensive classes carry with them considerable additional operating
expenses. More standard “chalk and talk” disciplines often represent
considerably reduced costs when compared with other areas. Most
institutions have a number of different types of programs and their
cost/revenue ratios will vary considerably. While cost/revenue
averaging on the institutional level creates a snapshot of overall
profitability, such an analysis masks the differences and
interdependence of programs and hinders the attempt to conduct fine-
tuned and strategic academic planning. By utilizing a customized
“portfolio analysis” of all academic programs at an institution, leaders
can understand the unique contribution each program makes and
construct models that can assist in developing options for institutional
transformation.
Fidelity
Comprehensive academic portfolio analysis and modeling is designed
to be integrated with the overarching mission of an institution. Its
purpose is not merely to identify “loss leaders” or “cash cows” nor to pit
the varying components of an institution against each other in the
struggle for resources. It is rather to present the organization’s decision
makers with a detailed and comprehensive portrait of the fiscal
dynamics of particular programs.
When this knowledge is combined with an awareness of how individual
programs support the institutional mission in a true academic sense,
executives can determine what levels of support are needed to maintain
key programs while simultaneously maintaining initiatives that contribute
toward institutional fiscal stability.
In this way, leaders will produce a long range vision and direction for
the institution that is built on comprehensive data harnessed in the
service of the inspirational ideas of the academy.
All our services are designed with three important criteria in mind:
- Optimization of efficiency
- Enhancement of profitability
- Fidelity to an educational mission
Efficiency
A competitive and increasingly complex educational marketplace places
stresses on institutional resources in many ways. At its heart, education
is a complex endeavor. It is also costly. The challenge for leaders in
higher education is how best to create a balance between academic
excellence, cost, and institutional integrity. Leaders require new tools to
help them determine what aspects of current systems are
indispensable, what elements can be modified, and how changes will
impact on the all-important factor of educational quality.
To even begin this exercise, some fundamental (and often difficult to
isolate) factors need to be identified:
Cost – determine what direct institutional costs are associated with
delivering the educational product. To be complete, such an analysis
should be able to identify cost per student, per credit, by faculty
member, by department, and by major. Typical attempts to develop cost
averaging provide limited insight, but typically hinder attempts at real
strategic planning.
Revenue – conduct the same level of detailed analysis for income,
making sure that figures are real dollars and account for individual
student institutional financial aid packages, etc. Broad analysis utilizing
standard or average tuition fail to account for differences in what
revenue individual students actually bring to an institution. The
interdependence of programs at an institution requires more careful
and detailed understanding of how revenues may be applied to costs.
Cost/Revenue Ratio – which permits an analysis of the fiscal
contribution or drain particular programs or majors place on institutional
resources.
Once these factors are specifically identified, institutional leaders then
have the basic tools need to examine what changes can be made to
enhance efficiency and to link those changes to longitudinal studies of
student and institutional outcomes.
Profitability
The analysis of cost/revenue ratios leads to issues related to the
optimization of class size, faculty load, student/faculty ratios and full-
time /adjunct ratios, etc. By creating a staffing model that is tailored to
individual programs and majors, academic leaders can project the
impact of targeted enrollment changes on staffing needs, and match
optimum student enrollment with controlled faculty costs.
Different programs have different costs associated with them—lab
intensive majors have significant limitations on class size, technology
intensive classes carry with them considerable additional operating
expenses. More standard “chalk and talk” disciplines often represent
considerably reduced costs when compared with other areas. Most
institutions have a number of different types of programs and their
cost/revenue ratios will vary considerably. While cost/revenue
averaging on the institutional level creates a snapshot of overall
profitability, such an analysis masks the differences and
interdependence of programs and hinders the attempt to conduct fine-
tuned and strategic academic planning. By utilizing a customized
“portfolio analysis” of all academic programs at an institution, leaders
can understand the unique contribution each program makes and
construct models that can assist in developing options for institutional
transformation.
Fidelity
Comprehensive academic portfolio analysis and modeling is designed
to be integrated with the overarching mission of an institution. Its
purpose is not merely to identify “loss leaders” or “cash cows” nor to pit
the varying components of an institution against each other in the
struggle for resources. It is rather to present the organization’s decision
makers with a detailed and comprehensive portrait of the fiscal
dynamics of particular programs.
When this knowledge is combined with an awareness of how individual
programs support the institutional mission in a true academic sense,
executives can determine what levels of support are needed to maintain
key programs while simultaneously maintaining initiatives that contribute
toward institutional fiscal stability.
In this way, leaders will produce a long range vision and direction for
the institution that is built on comprehensive data harnessed in the
service of the inspirational ideas of the academy.
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