Partnerships Between Educational Establishments

and Industry - Need or Nonsense?

Sarah Heginbotham and Charlotte Ash

Partnerships are nothing new!

Academics have always carried out research that in the longer term has benefited society

Partnership relationships with industry have been increasing and becoming more formal over the past 20 years

What was once a peripheral activity is now being actively encouraged as central to the role of the university.

The second academic revolution

Etzkowitz (1998) calls it the second academic revolution. The first made research an academic function in addition to the traditional task of teaching. The second integrates economic development into the university as an academic function.

“Although many academics would prefer to return to an era when federal support was sufficient to meet the needs of their research enterprise, few see this as a realistic possibility. The conflicts are no longer about whether the university should pursue knowledge for profit, but over the shape of the organisational innovations to accommodate industry connection will take”

Etzkowitz (1998)

Drivers for partnershipIn general Decline in Government funding Increasing global competitiveness Advent of the Knowledge economy

Teaching Employers/students are demanding more vocationally relevant courses

Research As competition for funds increases a broader range of sources has to be found Collaboration is being actively encouraged as part of national R & D policy Rising demand for innovation in products and processes Computerisation and miniturisation of scientific instrumentation means that

more universities can mount credible research projects in a proliferation of niche areas - no longer a need for huge centralised research facilities

New topics have arisen from interdisciplinary syntheses

What are they what do they look like…...

Each partnership will be unique and its form will depend on many factors;

the objectives and scale of the project the participants the relationship history the resource sharing that is required the time and publication constraints the market potential

Examples of partnership relationships

Research industry Sponsorship of fundamental ‘blue sky’ research. partnership - where resources are shared collaboration - where firms initiate the research but need specialist

expertise from the university spin-outs - where the project is managed commercially

Teaching joint course design and delivery placements

Operational outsourcing of student accommodation/IT

Benefits and drawbacks of partnership

Benefits of partnership

For the University Accomplishment of the social function Becomes an exciting place to work and attracts the best staff and students Increased funds. Increases knowledge through research and disseminating new knowledge

through publications Gets to contribute to local, regional and national wealth creation

For industry Benefits are directly derived from the commercial exploitation of

knowledge or an invention Firm gets help to achieve their objectives - growth in turnover and

profitability Firms gain access to technological research that they lack in-house Firms get solutions to technical problems and links for staff recruitment

All partnerships have problems

History different backgrounds and experiences which shape the

way we view the world Objectives

different needs and wants Communications

different ways of interacting Culture

different ways of operating and solving problems

Organisational differences

Goals and Objectives are ambiguous Measurement of objectives is also ambiguous Middle and senior managers not are not given the time to

manage Raw materials i.e. students Shared professional values (socialisation of academe) Fragmented structure and environment Autonomy of key workers Artificial market economy

Specific problems highlighted in the literature

Mismatch of cultures Divergence of their respective objectives (firms want to realise rapid benefits,

Universities want to enhance knowledge) Firms limit choice of research topics Firms stop academics talking to each other Firms delay the publication of results. University culture encourages

publication Appropriation of knowledge problems. Who does the new knowledge belong

to? Term of research - Whereas R&D managers prefer to carry out research

oriented towards short-term practical problem-solving, academics naturally adopt longer-term views. Firms usually press universities to perform short-term research, contrary to the academic inclination

There will always be opposition

Threat to traditional integrity

Intensive pecuniary interest will cause the university to lose its role as independent critic of society

There is also opposition from firms who are worried about competition from universities.

Legal intrusiveness

““The danger is that teaching and research are going to be steered by these infusions of money that our universities are only too eager to receive,” said Bill Graham, president of the association and a philosophy professor at the University of Toronto. “And the idea that knowledge only has a value if it has commercial applications must be challenged. This is potentially the most explosive issue in postsecondary education in decades.”” Desruisseaux (1999)

“As Arthur O. Lovejoy, a founder of the AAUP, observed in a 1937 AAUP article, “The distinctive social function of the scholar’s trade cannot be fulfilled if those who pay the piper are permitted to call the tune”.” Euben (2000)

Case Study: The SHU Experience of working in

Partnership with Armstrong Laing

The Project

JISC funded research project to trial the implementation of Activity-based costing (ABC) to get to the true cost of courses in a UK university

Limited time - originally a 6 month project Research staff not accounting or ABC experts Wanted to trial the true methodology and language

not create our own for use in HE Needed advice and software from experienced ABC

practitioners

CNL2 Choosing a partner

How we found a partner

ABC Literature Review

Review of consultants and software available

Presentations from major suppliers

Email discussions and visits to other institutions using ABC software

Why we chose Armstrong Laing

Experienced in both public and private sector AL Consultants are recruited from successful

implementations User friendly software Willing to enter into a true partnership No previous ABC implementation in HE

Activity-based costing (ABC)

ABC was developed as an alternative costing methodology by Robin Cooper

and Robert Kaplan of the Harvard Business School (1988) in their research

into product costing in the manufacturing industry.

Cooper and Kaplan (1988)

They argued that traditional costing distorted product costs (“peanut butter spread approach”)

There is a cost to all activities carried out within an organisation

Activity costs should be distributed to products in relation to their use

The ABC model

General Ledger

Activities

Cost Objects

BudgetsBusiness Sustaining Costs

Methods

Cost Drivers

Activity drivers

Hold Tutorials

No. Students

Business Intelligence

Resources

Cost for each Customer/product/channel group

method Activities

Staff time

Cost driver

I.T. & Management

I.T. & Management

FT

FT

DL

Decide on the Cost Object

Management Briefings

Create an Activity Dictionary

Allocate General Ledger transactions to activities

Collect and analyse staff time

Allocate the activity costs to cost objects

The ABC process

Back to the partnership

From the beginning…..Both partners knew

Fixed time scale and required outcomes of the research Each others objectives

Armstrong Laing were certain they could deliver They fully explained the process to be followed, the time

scale and the required involvement of staff at all levels of the organisation

The research team were keen to deliver However, the team were aware of the uniqueness of the

university culture and also explained that this was a research project (trial and evaluation). If it did not work we would say so.

So how did we go on?

Going back to the ABC process Decide on cost object Management Briefings Create an Activity Dictionary Allocate General Ledger transactions to activities

Collect and analyse staff time and allocate salaries

proportionately to the activities Allocate the activity costs to cost objects using cost

drivers

Project lessons learnt

Top management support vital Longer lead times required Language used is very important Co-operation not guaranteed, support has to be

earned Activity Dictionaries filled out by individuals You can never give staff too much information

However….All of the objectives set out by both parties at the

beginning of the project were achieved

Activity-based costing did take place within the Faculty Courses were costed The reports are currently with the funding body for

approval We were able to prove that ABC, using Armstrong Laing

methodology and software, works within a University AL now have their proof of concept

Our views on the partnership

We could not have completed the project in the time scale without an experienced ABC partner

We found their experience invaluable when talking to and convincing staff about the project. AL had heard all of the questions/problems before and had examples from other organisations to prove their case.

We found that in the early stages of the project AL were more likely to be listened to than a team of researchers.

We found their advice invaluable, for example, when deciding on the appropriate number of activities.

What Armstrong Laing have to say…….

Undertaking ABC in a university has not proved that different from any project within the private sector

No two organisations are the same and all will pose a different set of problems

Academic staff were prone to over analyse what was required of them at each stage but AL appreciated this and stated….. “that is why they are academics and not machine operators.”

The main difference they thought was the organisation culture… “..academics operate differently from ‘normal’ staff in an organisation”.

“The University environment is less structured than industry and there is no real managerial control - if academics are told to jump by their manager, they will probably analyse the request, discuss the dimensions of the jump, write a paper, then conclude that it is not really worth jumping at all.”

“Managing academic staff has been likened more than once to a process of herding cats. Cats don’t need leaders. Experts perform best when left to their own devices. Scientific and artistic productivity depends on freedom to follow serendipitous leads and to be inquisitive without someone breathing down your neck”

Paul Ramsden (1998)

We both learnt from the Partnership

What AL learnt from us Bonus to have staff dedicated and committed to the

project Many organisations attempt to implement ABC without freeing staff

from their normal day-to-day work commitments. Often the project team are nominated to participate by their ABC-enthusiastic manager.

The SHU team built the case for the project, applied for funding, and thus had a solid reason for ensuring its success.

Refreshing to have a project not led by Finance, or at least accountants

Their financial-based software package could be fully understood and operated by non-accountants.

The style of reporting focussed on pictorial representation which is often more effective and not the usual table of numbers used by accountants.

What AL learnt from us cont….

If possible, it is very useful to involve customers

What SHU learnt from the partnership

Apart from the course costing we set out to deliver: Trained staff able to carry out a full ABC project using the AL

methodology and software. A knowledge of exactly what activities take place within the

Faculty, the amount of time spent on them and by whom A closer relationship between all members of the Faculty. A list of improvement suggestions for the General Ledger A greater knowledge of the vast amounts of information available

about the Faculty and exactly where it is stored and in some cases duplicated

An enthusiasm across the Faculty to investigate its activities and costs further

Experience of working with industry

An unexpected outcome Suggestion - time collection would be easier if automated It was given as a project to a group of second year students

solve a real life problem learn how to deal directly with business other students learn from the groups experiences curriculum vitae improved

The research team and the funding body benefit because they gain more than requested

Armstrong Laing benefit because they will have a front-end to their software that can be adapted to work in any organisation

There is potential for the new-front end to be adapted to collect Transparency Review time data

General Recommendations

Our project was a success because..

Shared clear objectives Appropriate legal and administrative relationship Defined organisational boundaries Mutual trust and understanding Clear and open management of the project Previous experience of the participants Clear lines of communication

How to maximise the benefits and minimise the drawbacks

Recognising different animal to us Recognising boundaries - what they can offer and

what we can offer Recognising that success can be measured in a

variety of ways - with no one criteria becoming dominant

Recognising our own worth - we have plenty to offer in return - it is a two way process

Details about the project itself can be found at -

http://www.shu.ac.uk/cnl/

Thank you for listening