Business planning methodology to support the development of strategic academic programmes.

Author:Philbin, Simon P.
 
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Introduction

Universities and independent research institutions can often be large and complex organisations that need to be flexible and adaptable to continuous change (Navarro & Gallardo, 2003). Indeed universities are required to meet the needs of various stakeholders through providing academic services involving the delivery of education and in the case of research intensive universities, this also includes undertaking research. Furthermore, knowledge exchange activities result in the translation of knowledge and research outcomes into commercial benefits for partners or societal benefits for wider stakeholders (Philbin, 2015). In this context universities have increasingly been viewed as occupying a strategic role through stimulating innovation and economic growth through technology transfer and the resulting commercial exploitation of intellectual property (Hughes & Kitson, 2012).

Universities also face a number of challenges. There is increasing pressure on academic budgets, especially on the funding secured from governmental sources. There is an increasing level of competition in terms of universities competing on multiple levels, e.g. competing for the best students and staff as well as for research funding. There is also a tendency for universities to be engaged in greater levels of performance measurement to underpin effectiveness across research, teaching and knowledge exchange activities (Ter Bogt & Scapens, 2012). But universities are also faced with the opportunities of adopting modern ICT (Information and Communications Technology) to improve the scope and quality of teaching (Selwyn, 2007). Additional educational channels are under development and offered by an increasing number of universities, e.g. through recent developments of MOOCs (Massive Open Online Courses) (Daniel, 2012). Other opportunities could, for example, be associated with responding to major funding calls and setting up multidisciplinary research centres (Philbin, 2011), or establishing new research facilities that bring together academic faculty to focus on a specific industrial requirement or societal need for research, such as healthcare, security or the environment.

In this context, universities need to be able to adapt to emerging opportunities and respond to strategic programme opportunities in an efficient and effective manner. In the case of major opportunities, there will be the need to assemble a supporting business case that underpins the opportunity. The business case will need to sit alongside the academic case for financial support and will jointly be reviewed by the funding body, which could be a government agency, industrial company, charitable foundation, philanthropic source or even the university itself. Development of a business plan for a new initiative requires appropriate commercial competencies in order to ensure a compelling and attractive case can be assembled, which can thereby attract the necessary funding. While companies are experienced in such business planning, in the Not-ForProfit (NFP) and academic sectors there has historically been less of a need for such commercial competencies and capabilities. This is changing, however, and increasingly universities and NFP research organisations are adopting management practices derived from the corporate world (Nickson, 2014). Nevertheless, in our experience we have found there can be certain challenges encountered, especially for strategic academic initiatives. These challenges are summarised in Table 1.

Consequently, this paper will describe an approach developed at Imperial College London in the United Kingdom to help support the development of strategic academic initiatives at universities through use of a structured business planning methodology. The framework is introduced and an illustrative case study is described in order to provide readers with insights into the benefits of adopting a structured business planning methodology at higher education institutions. Such a framework can be deployed to support the development of strategic programme opportunities such as new research centres, major infrastructure investment as well as the creation of new academic capabilities to support research and education delivery.

The Need for Business Planning

The process of business planning needs to capture the customer need in a succinct manner and then derive a viable solution and supporting approach in order for the need to be met. Addressing this need involves the deployment of the necessary resources along with management oversight and the costs for such activities need to be ascertained. There is also a need to identify the risks associated with such a business plan and other commercial factors such as the availability of investment capital and the level of competition from other suppliers in the sector. The use of structured methodologies, such as programme management, offers the ability to provide a systematic approach to support the business planning process. Indeed ensuring there is a robust process to support planning can help improve the success of strategic initiatives. Process considerations include the features of the planning stage, human-dimensions of decision-making, managerial and technical skills available to the team--both the internal and external context for the planning as well as the initial and final outcome measures of performance (Bryson & Bromiley, 1993).

In terms of developing strategic initiatives, there needs to be alignment with the relevant organisational strategy, which could be at the corporate, business or functional level (Griinig & Kuhn, 2015). This alignment is required to enable the pursuit of new strategic opportunities and to help organizations receive the necessary funding. The development and maintenance of key infrastructure and facilities can be of strategic importance to academic institutions and initiatives that are pursued in order to maintain enterprise-wide research and associated experimental facilities can benefit from the support of standardised and transparent processes (Grieb, Horon, Wong, Durkin & Kunkel, 2014).

The capabilities required for universities to initiate and deliver strategic initiatives, such as new research centres or subsidiary companies, will be associated with the processes adopted as well as the structures and resources that are available. Moreover, business planning can support the decision-making process required for developing such strategic initiatives but while adopting a structured approach to business planning offers clear benefits it should be balanced against the need to avoid becoming overly rigid or bureaucratic (Oakes, Townley, & Cooper, 1998). Indeed business planning has historically been a recognised approach to support new venture creation (Delmar & Shane, 2003), which is highly dependent on being able to articulate the commercial value to be delivered by the venture. Developing a strategic programme at a university needs to capture and articulate the academic (or technical/scientific) and the commercial case, so it is logical to draw on best practice from the corporate environment but crucially with refinement to the university/NFP context.

Recognising the best practice and current approaches to programme management as well as business planning for strategic initiatives, we identified the Managing Successful Programmes[TM] (MSP) framework (Office of Government Commerce, 2007) as a suitable methodology to support the development and management of strategic initiatives at Imperial College London. This was supported by consultations with members of staff at Imperial College on the need for an efficient process for the management of major initiatives and also through capturing views on the matter from a range of senior stakeholders at Imperial College. Consequently, we sought to implement the MSP methodology through adapting the standard process model to Imperial College's requirements for strategic academic initiatives and the process was also streamlined to be aligned with Imperial's administrative systems and thereby avoid excessive bureaucracy.

MSP is a management standard that has been developed over the last several years by the United Kingdom's Office of Government Commerce (OGC). This management approach is not derived from theoretical study but has been established through building on the knowledge and experience of practitioners and the approach therefore represents best management practice. The management standard relates a programme to the implementation of a set of related projects to deliver outcomes and benefits associated with the organisation's strategic objectives. Moreover, a programme is focused on aligning corporate strategy with a delivery mechanism for change in the context of existing business operations, where according to the MSP framework a programme can either be vision-led, emergent or compliance. Table 2 provides the definitions for the three main types of programmes together with a series of illustrative business planning applications for universities according to the three types.

Table 2 highlights that there are a range of business planning applications in higher education institutions that can be related to the programme management approach offered by MSP. Adoption of a recognised and structured methodology, such as MSP, offers a university a number of benefits. These include the efficient use of administration resources to support research programmes, effective planning according to recognised best practice for management...

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