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Dr Richard Penson / Andrew Haslehurst Development and use of a pricing procedures manual and changing the culture. JCPSG Seminar, 8 November 2001. Dr Richard.

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Presentation on theme: "Dr Richard Penson / Andrew Haslehurst Development and use of a pricing procedures manual and changing the culture. JCPSG Seminar, 8 November 2001. Dr Richard."— Presentation transcript:

1 Dr Richard Penson / Andrew Haslehurst Development and use of a pricing procedures manual and changing the culture. JCPSG Seminar, 8 November Dr Richard Penson, Associate Dean External Development Andrew Haslehurst, Financial Projects Manager

2 Costing & Pricing at SI Skewed Profile in P/T, Professional & FE Strategy to move towards full time degrees Development of ABC course-costing model –TR-like full absorption Activity Based Costing –Used to identify optimum delivery modes Development of event costing/pricing model –Used for marginal activities, eg short courses/consultancy –Later adopted by DFE as good practice model Use course costing data for resource allocation.

3 Developments Free-standing enterprise unit –re-working of event costing/pricing model –first draft of a costing and pricing manual Overseas activities –two significant business failures –NAO scrutiny into cost identification Regrouping and entrenchment –side-lining of entrepreneurial activities.

4 New Strategy - Culture Change? Lengthy internal consultation exercise –more devolved structure with 3 faculties –new strategic plan with linked strategies, incl Diversification Strategy Transparency Review New edition of Costing & Pricing Manual –embodies TR principles & pilot study output –validation process to ensure quality control

5 Diversification Strategy Purpose is to reduce dependence on Government funding Incremental approach Continuum from teaching & research to consultancy & commercial activities Not driven exclusively by finance, but: –… aim is surplus after full cost... –… and never less than direct cost

6 Diversification Projects Manual Major re-write of 1996 manual –new spreadsheet for costing long term activities –update of event costing/pricing spreadsheet –using TR-derived costing data –advising on pricing considerations –giving break-even data at target return –available on intranet –supported by c&p training workshops

7 Changing the Culture Each faculty has a Diversification leader –Costing & Pricing Working Group Implementing Costing & Pricing Strategy (incl TR) Training programme incorporated into MDP –Diversification Steering Group Virtual company, with Governor membership Co-ordinating faculty initiatives promoting use of Manual


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