Using annual measures to inform business decisions.

Balanced Scorecard/Key performance Indicators/Target Costing

One of the challenges of coming up with a good Balanced Scorecard is the difficulty of developing a measure that you can count and report on a monthly basis. I usually recommend a monthly basis, as considering progress at this frequency at least gives you the chance to adjust and adapt as you go along.

Annual measures are so late after the initial action that you did that if you are doing something wrong it is going to take quite some time to put it right. You want to know now if it is working or not.

Some measures can’t realistically be done monthly though. You might want to record these less frequent measures anyway, even though they won’t be part of your monthly discussions.

This example, published today, is of student opinion of value for money of their degree.

I should emphasise that it is a national figure, not my University and that it doesn’t consider what degree they are taking.

The article talks about possible errors in calculating the information, to which I would also suggest does it mean they don’t think the degree was good or, they don’t think the fees system is good. Are they saying that the fact that they have to pay a high interest rate on their loans for 30 years invalidates the value they get from the teaching rather than the degree not being very good.  Would students asked at different points in their degree have given different answers?

Every question raises other questions.

Just 37.5% think their degree is good value for money.

In another business, context if people didn’t think your product was worth the cost, you’d want to test ‘willingness to pay’, how much they would pay for a product and what they wanted from the product. You could then see if you could redesign your product to match expectations and the price people would pay. This is Target Costing.

So, what would you consider doing with this information?

Reduce the cost? Would students think you were of lower quality if you were cheaper, could you actually provide the degree at a lower cost, would you be of lower quality as a consequence of having a lower income?

Would reducing cost increase the number of people coming? Would that give you enough money to maintain standards, would having more students reduce quality, could you have more students without major capital expenditure?

Do more to explain the value of the degree? That’s a combination of changing minds, demonstrating that your degree is different to all the others, adding benefits to students that are outside the degree itself, but part of being at the University – all the extra-curricular career support and life experience gained from going to university?

Or, is this students being influenced by a political agenda where the Conservative Government is trying to make students think it is the fault of the Universities rather than their fault for tripling fees and charging very high interest rates? How would you counter that?

Jonathan

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Posting from the Office for Students.

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Official statistic: Key performance measure 19

Students who believe university provides good value for money

37.5%

Percentage of undergraduate students who answered ‘Yes’ to the question:
‘Considering the costs and benefits of university, do you think it offers good value for money?’

We are working on a target for this measure

What does this show?

We want to measure whether students think attending university is good value for money.

This uses polling data commissioned by the Office for Students. For the baseline measure, Natives asked 2,097 people in January-March 2020 ‘Considering the costs and benefits of university, do you think it offers good value for money?’ This measure shows the percentage of undergraduate students who answered ‘Yes’.

About the measure

• Frequency: Annual
• Population: Undergraduate students who are domiciled in the UK and who answered the value for money question. Measures for other subgroups are given as background information below.
• The measure: Respondents in the population who answered yes, given as a percentage of the respondents in the population who answered the question.  
• Data sources: Polling by Natives for the Office for Students. 2,097 respondents fall into the KPM population, of whom 2,094 answered the value for money question. The question was piloted from 20-24 January 2020, and was live from 10 February to 23 March 2020. The majority of responses were collected prior to the introduction of the strictest national measures to control the spread of coronavirus.
• Available: KPM 19 will be updated in spring 2021.

Interpreting this measure

Natives surveyed only a subset of students. There is a risk that the views of this subset differ from the views of students more generally, simply because of random variation. There is also a risk that the method of data collection (which is a form of volunteer sampling) introduces bias. It is not possible to formally quantify the level of uncertainty around this measure. As a result, this measure is best used to understand in very general terms students’ perception of value for money and to note large changes in this perception between years. It is not suited to detecting smaller changes, or to drawing more precise conclusions.   

These results are broadly consistent with the findings on value for money from the Advance HE and Higher Education Policy Institute (HEPI) Student Academic Experience Survey. In 2020, 39% of undergraduate students reported higher education to be ‘good’ or ‘very good’ value for money.¹

Background information

Further information about how applicants, students and graduates responded to the value for question money is provided below.

¹ Neves, J. and Hewitt, R. (2020). Student Academic Experience Survey 2020 External link (Opens in a new tab or window). Advance HE/Higher Education Policy Institute

Article Published 25 November 2020