Capgemini Presentation_Skills Funding Agency_Stephen Posavad

DRAFT
“Meeting the challenges facing the Further education
sector”
Storyboard-Draft
25th Aug, 2010

2Copyright © 2010 Capgemini. All rights reserved.
Presentation Title
DRAFT
 This report identifies three drivers now governing change in the FE sector:
 Reduced government funding
 Policy changes
 More demanding learners
 These changes mean that FE colleges must thoroughly examine how they provide services. As a first step, the report considered
a number of best practice examples both from inside and outside the sector, highlighting that there are real benefits from a
fundamentally different approach to service delivery.
 A model that captures this new approach should include all the services FE colleges deliver
 We have grouped our solution framework into three service areas: classroom, student, and college. There are
opportunities for cost savings, quality improvement, and innovation in each of these areas. This three-pronged model is
underpinned by market-driven, customer-focused, financially sustainable, innovative-thinking, collaborative thinking principles.
 This model is delivered through the Shared Value Network in which software that supports each service area is grouped
into clusters. This shared pool of software services can be rapidly supplied with minimal investment and management effort.
 The Shared Value Network is characterised by high agility and scalability, and will make available resources for re-
deployment to priority areas. FE colleges are free to determine how best to configure the services offered through the Shared
Value Network in a way that respects local needs, the needs of their students, available resources, financial condition, and
strategic objectives.
 The Shared Value Network will not only allow colleges to achieve meaningful cost savings and to pursue alternative
revenue streams should they so choose, but just as importantly to improve the experience of learning through tools
congenial to the way today’s generation manages information, and enrich the experience of teaching by granting
teachers greater scope to be developers of curriculum
 Finally, becuase the Skills Funding Agency and IM Services already perform a number of data-related and IT services for FE
colleges, they could play the leading role as provider of shared services
Executive Summary

Presentation Title
DRAFT
Contents
Section Title Page Number
1 FE Landscape – A Turbulent Road Ahead 4-19
1.1 Drivers of change
1.2 FE college overview
2 Best Practices – Seeds of a Solution 21-28
3 The Shared Value Network – The Way Forward 30-45
4 Delivering a Shared Value Network 47-61
5 Conclusion

Presentation Title
DRAFT
UK’s Economic Challenge
UK’s fiscal position has left the government no alternative
but to undertake a sweeping review of public sector funding
UK Deficit/Debt as % of GDP (2006-2009)4
Without reductions across virtually every area of public sector funding the government risks serious
economic crisis.
34.7 37.7
70.4
159.2
2.60% 2.70%
4.90%
11.40%
0%
2%
4%
6%
8%
10%
12%
0
20
40
60
80
100
120
140
160
180
2006 2007 2008 2009
Debtas%GDP
Deficitin£Billions
Total deficit Debt as % GDP
In 2008/09 increases in public spending led to significant
growth in government debt and deficit
- Debt rose by 6.5% as a % of GDP between 2008/09 to
11.4% in 2009
Without reversing the debt and deficit of the country
leaves itself vulnerable to serious economic crisis
- “[Nations] with unsustainable fiscal positions ... are in
danger of falling under the spotlight of nervous bond
holders.” 1
This need to reduce debt has resulting implications for
government public policy
- “Cuts…Will Affect Our Whole Way of Life”2
- Many economists3 believe the country's current fiscal
position will impose searing public policy choices on the
government
Commentary
Source: : (1) “To cut, or not to cut…That is the question facing Britain’s government”, The Independent, 2010; (2) “Prepare for years of pain: David Cameron warns cuts ‘will affect our whole way of life”, The Daily
Mail, 2010; (3) “A Survey of Public Spending”, Economic and Social Research Council-Institute for Fiscal Studies Briefing Note, 2009; (4)” UK Government Debt & Deficit”, Office of National Statistics,
2010
Year
1 2 3 4 5
P
Learner/
Teacher
demand
s

Presentation Title
DRAFT
In the CSR, the government declared its intention to cut departmental spending by 25% in real terms over the next four
years (excluding NHS and foreign aid)1, predicted to be “ [T]he longest, deepest sustained period of cuts to public services
spending.. since World War II”2
Spending Cuts facing Government Departments
The government’s “Comprehensive Spending Review”(CSR) will
lead to funding cuts in sensitive areas once considered untouchable
Funding cuts for the FE sector will potentially go beyond severe reductions in administration costs to affect
front line services.
Source: (1) “UK’s new budget is a house of horrors,” Top Stocks, 24 June 24 2010; (2) UK fiscal policy: The Posen Paper, FT.com blogs, comment by David Laws, The Chief Secretary to the Treasury, 24 May
2010;; (3) “How a 25% cut might hit departments’ spending,” FT.com, 24 June 2010.
Illustrations of a 25% Funding Cut by Department3
Department A 25% budget cut is the equivalent of:
Education  Eliminating all funding to primary schools and Sure Start centres
Defence
 Stopping all procurement of new equipment - including plans for two new aircraft carriers and close to
half of the maintenance spending for existing kit
Local Government
 Cutting double its current spending on highways, or more than it spends on the whole of adult and
children's social care combined
Home Office  Eliminating 35,000 uniformed officers
Business Innovation
and Skills (BIS)
 Cutting its entire budget for science and research
1 2 3 4 5FE Landscape – Drivers of change
P
Learner/
Teacher
demand
s

Presentation Title
DRAFT
In addition to funding cuts the government’s skill training
agenda sets out major reforms for the FE sector
Source: (1)” Gibb: ‘Further freedoms for schools and colleges”, Department of education, 2010; (2) ”Association of Learning Providers Summer Conference,” speech by John Hayes, Minister of State for
Further Education, Skills, Lifelong Learning, 2010 (3)“Funding Letter to Skill Funding Agency”, Rt. Hon. Vince Cable, BIS, 2010 (4) “Higher Education”, BIS, 2010; “John Hayes launches consultations on the
future of further education and skills”, Lifelong Learning, 2010; “Funding Letter to Skill Funding Agency”, Rt. Hon. Vince Cable, Secretary of State, BIS, 2010
The Government’s Skill Training Agenda
 The government has eliminated the need for FE colleges to prepare summary accounts of
activity
 OFSTED inspections for outstanding schools will be stopped1
 The Skills Funding Agency will require poorly performing colleges to quickly take remedial
measures or face having their funding halted 2
 £15 million has been allocated to assist FE colleges develop and implement shared
service solutions3
 FE colleges are being strongly encouraged to work with higher education (HE) institutions
in developing creative learning routes for students that involve a combination FE and HE
colleges4
 The government will have the flexibility to quickly shift funding from adult to employer
responsive budgets in line with shifting demand from learners and employers
Autonomous
Accountable
Responsive
Collaborative
The devolution of power to FE colleges will give them greater scope to make changes affecting every area of
their operations.
Changes made by Government encourages FE colleges to become more:
Learner/
Teacher
demand
s

Presentation Title
DRAFT
Reflections from leaders in the FE sector
Leaders in the FE sector believe FE colleges can accommodate
funding cuts whilst still improving quality of the learning experience
“The pressing need to… deliver more efficient services at lower
cost must be the theme of your work.”4
Vince Cable, Secretary of State for Business, Innovation and
Skills
“other people, and I count myself among them, see in the need
to make savings not impending disaster, but a once in a
generation opportunity for really radical reform.”1
John Hayes, Minister of State for Further Education, Skills, and
Lifelong Learning
“The education sector, like any other, needs to respond
creatively and dynamically to the financial challenges facing the
sector.”2
David Grailey, Chief Executive, (Northern College of Further
Education ), the qualification awarding body
“[F]or real savings to be made a wide perspective on what is
available…needs to be undertaken.”5
David Collins, Chief Executive, Skills and Learning Improvement
Service
“Being inventive and innovative has to be the way ahead for
many colleges in order to reduce their dependence on the public
purse whilst responding to the needs of their local businesses
and communities.”3
Sa’ad Medhat, Chief Executive, New Engineering Foundation
“[A reduced budget] means driving all of our public funding to the
frontline, training more people and more teachers, cutting on
bureaucracy and unnecessary cost.”6
Chris Humphries, Chief Executive, UK Commission for
Employment and Skills (UKCES)
FE colleges should exploit anticipated funding shortfalls to innovate in programs, programme delivery, and
pedagogy.
Source: (1) “Speech to Association of Colleges”, AOC, 2010; (2) Letter to Association of Colleges, (4) August 2010; (3) “Letter to Association of Colleges” AOC, August 2010; (4) Letter to Skills Funding Agency,
2010; (5) Letter to Association of Colleges, August 2010; (6) “Ambition 2010 report”, UKCES, 2010
Learner/
Teacher
demand
s

Presentation Title
DRAFT
Colleges need to adapt to the demands of today’s digitally
savvy learner and transform the learning experience they deliver
Demands of today’s
Learner
Convenience
−Virtual Learning Environments that allow
students to listen to lectures in real time
or as per their schedules3
Accessibility
−Learners are increasingly demanding
the ability to receive instruction anytime
and anywhere
Flexibility
−Changing needs and circumstances mean
learners are demanding to move between full
time and part time study and between FE and
HE learning paths
Teachers will also have to adapt to the changing demands of the learner, developing learning instruction
tools and materials to suit their changing needs.
Demands of today’s learner
FE colleges must develop learning strategies that cater to the technological sophistication of contemporary
learners, whilst also being mindful of potential accessibility issues
Source: (1)“2008-2009 Benchmarking data”, LSC, 2010; (2) “Partnerships and Collaboration”, YPLA, 2010 (3) “OFSTED Grade 1 colleges”, Collegenet.co.uk, 2010
Multiple Platform Usage
−Learners are demanding the ability to
receive instruction and learning materials
on PCs as well as other mobile device

Presentation Title
DRAFT
Drivers for change the need for transformation in the FE Sector
The challenges facing the FE sector are so serious and multi-faceted
only transformation across the entire ecosystem will suffice
Commentary
Funding reductions, policy changes and demands made
by teachers and learners are key drivers of
transformation in the FE sector
As a result the government is instituting policy changes
to allow colleges greater autonomy
- Granting greater autonomy to FE colleges means that
Skills Funding Agency must replace a top down approach
with one that is more customer-centric
 Employers, colleges, and learners sit at the front end of
this transformation model, all of which experience
directly the repercussions of change initiated elsewhere
- Funding cuts impact the level of services an FE college
can provide
FE Landscape1
Employers
Colleges
Learners
Without fundamental transformation employers, colleges and learners will undoubtedly suffer from funding
reductions, changes in policy and increasing learner and teacher demands.
National
Apprenticeship
Service
Young Peoples
Learning Agency
Skills Funding
Agency
IMServices
Department
ofBusiness
Innovation
andSkills
Department
for
Education
The outputs of
transformation
are felt by
Funding
reductions
Policy
changes
Learner/
Teacher
demands
Drivers of transformation
1 2 3 4 5
Source: (1) Focus interviews with Capgemini, 2010
FE Landscape – Drivers of change

Presentation Title
DRAFT
Contents
FE Landscape – FE college overview
1.1 Drivers of change
1.2 FE college overview
4 Delivering a Shared Value Network
5 Conclusion

Presentation Title
DRAFT
FE College diversity
FE colleges differ in variety of dimensions including specialisation, size, location,
interaction with governing bodies
 In 2008-2009 there were 356 FE colleges listed in the UK1
- 75% were either General Further Education Colleges (50.51%)
or Sixth form colleges (24.24%)
 These colleges vary in the services provided, i.e. they
provide niche subjects, or a range of subjects2
- Agricultural and Horticultural Colleges and Art, Design and
Performing Arts colleges are more focussed on niche subjects
 They also differ in their interaction with governing bodies
- Sixth Form Colleges work much more closely with local
authorities than other colleges
 FE colleges are in dispersed locations across the UK with
South East region having close to 60 colleges
 58% of FE colleges had total income less than £20 m
whilst only 9% had more than £40 m1
- Size gives decision making independence to colleges but does
not seem to have any bearing on quality
This diversity is an important when considering how colleges will be affected by future changes in the FE
sector, a ‘one size fits all’ solution would ignore individual college characteristics.
Source: (1)“2008-2009 Benchmarking data”, LSC, 2010;(2) “Partnerships and Collaboration”, YPLA, 2010 (3) “OFSTED grade 1 colleges”, Collegenet.co.uk, 2010
UK FE Colleges by region (2008-2009)1
6%
9%
15%
6%
16%
17%
9%
12%
10%
East Midlands ER
Greater London NR
North West South East
South West West Midlands
WH
FE Colleges by specialisation (2008-2009)1 Colleges differ in a variety of dimensions
51%
24%
10%
9%
4% 2% General Further Education College
Sixth Form College
Art, Design, and Performing Arts College
Tertiary College
Agriculture and Horticulture College
Designated College
1 2 3 4 5

Presentation Title
DRAFT
FE College (Benchmark) sources of income
FE colleges receive their funding from different local bodies, leading to
bureaucratic delays
Even the new structure of having two separate funding bodies for post and pre 19 years seems inadequate.
(a) BIS: Department of Business and Information Services (b)Benchmark data is the average data value of 356 FE Colleges
Source: (1) “2008-2009 Benchmarking data”, LSC, 2010; (2) “The Skills Funding Agency and further education funding”, House of Commons, 2010
Sources of income for FE Collegeb, (2008-2009)1
73%
8%
5% 7%
1%
6%
0%
Main LSC grant
Other LSC grant
Higher Education Funding
Council for England (HEFCE)
grant
Tuition fees and education
contracts
Other grants and contracts
Other income
Investments and interest
 Almost 73% of FE college income comes from Learning and
Skill Council grants1, (now Skills Funding Agency)
- LSC’s funding was managed at regional levels (nine different
regions) leading to a high level of variation and bureaucracy
 Colleges deal with multiple local authorities' for funding
sanctions depending on students2
- For example, Warwickshire College has to deal with 86 local
authorities which leads to delays
 The Skills Funding Agency and the Young Peoples
Learning Agency were set up in 2010 to ensure better
funding effectiveness for post 19 and 16-19 yrs
- Being an agency of the BISa, the Skills funding agency has more
authority than the erstwhile LSC
- However, some critics point out that having two bodies for
college funding will only complicate the funding structure
Commentary
1 2 3 4 5FE Landscape – FE college overview

Presentation Title
DRAFT
Expenditure of FE collegesa
The bulk of FE college expenditure is made up of teaching staff/support staff and
administration costs, so cost saving initiatives must come from these areas
 Typical cost structure
Administration costs are usually the first place to look for savings, however staff costs are more than four
times greater than administration costs.
(a)Benchmark data is the average data value of 356 FE Colleges
Source: (1)“2008-2009 Benchmarking data”, LSC, 2010
Expenditure for a typical FE Collegea, (2008-2009)1
74.72%
17.49%
7.80%
Teaching staff &
Support staff
Administration
Others
 The majority of FE Colleges’a expenditure (almost 93%) is
made up of teaching staff, teaching & other support staff
and administration costs
 Back office functions, which are included in administration
costs (17.49%) could be outsourced or rationalised to
reduce costs
- However this will have limited benefit as back office
expenditure forms only a small percentage of total expenditure
 Teaching staff expenditure (59.49%) offers the greatest
potential area for major cost savings as the cost structure
of a typical FE college is weighted towards teaching and
teaching support functions
Commentary

Presentation Title
DRAFT
Illustrative FE college operations and cost saving opportunities
Within teaching/support staff and administration, there are multiple opportunities to
realise cost savings
Opportunities for cost savings would also result in improvements in services, for example with a multi
tenant software solution colleges would gain access to the latest software without the fixed cost.
Opportunities for cost savingsCurrent FE college operations are not optimised
 Teacher services
- Use of digital technologies such as e-learning would reduce
teacher costs
 Student services
- Standardised processes developed for repeated services (e.g.
rostering, library services) would increase operational efficiency
 IT
- A shared multi tenant solution would allow different colleges to
spread software license costs
- Colleges would stay ahead of the innovation curve by
accessing the latest software without incurring the fixed costs
associated with owning it outright1,2
 Finance/HR
- Deploying integrated software solutions would provide better
visibility, aid decision making, reduce errors and cut costs
 Procurement
- A joint or a central procurement system for the FE Sector would
increase bargaining power and yield cost savings
- Scotland's public sector was expected to save £200 m in one
year through collaborative sourcing3
 Teacher services
- Teachers are the preferred medium for
course delivery2
 Student services
- Most activities such as admissions, library
services, rostering take place within each
department with little interaction
 IT
- Colleges rely on several different vendors
making interoperatibility of systems difficult4
 Finance/HR
−Colleges spend lot of time generating
standardised reports for local authorities
 Procurement
- Most colleges procure similar goods and
services from different vendors
1 2 3 4 5
Source: (1) Focus interviews with Capgemini, 2010;(2)Focus interviews with Capgemini, 2010; (3)“eProcurement for Public sector”, Capgemini, 2010; (4) “Software used in FE”, JISC, 2008

Presentation Title
DRAFT
FE Sector Financial Metrics
FE colleges can identify priority areas for transformation by benchmarking
financial metrics against FE sector benchmark data
(a)Benchmark data is the average data value of 356 FE Colleges; (b) LSC: Learning and Skills Council
Source: (1)“2008-2009 Benchmarking data”, LSC, 2010
Financial metricsa (2008-2009)1
Parameters FE College
Benchmarka
 Staff costs as % of income
(including contracted tuition) 65.87%
 Total % of income generated
from LSCb (Now The Skills
Funding Agency)
78.07%
 Current ratio (Current
assets/current liabilities) of FE
sector
1.26
 Cash generated from
operations (£000) 0.03
Commentary
 Benchmarking against other colleges or the FE sector
average will help colleges prioritise areas for cost cutting
 FE colleges must analyse and compare financial
parameters across the sector as well as with competitors
with sufficient granularity
-Benchmarking performance indicators will expose colleges to
the relevant competitive dynamics and financial metics
- This well help them to pursue corrective actions either by
learning from competitor strategies or by innovating ingenious
solutions
- Comparing with peers can also bring to the forefront new best
practices which the college can adopt
1 2 3 4 5
Because of the changing economic and political environment average benchmark metrics could change
rapidly, so colleges should also use other measures to identify areas for improvement.

Presentation Title
DRAFT
Illustrative representation of FE College
(Benchmark ) expenditure, (2008-2009)1,2
The need for reducing teaching and support staff expenditure
The scale of current funding reductions calls for a more comprehensive approach than
outsourcing just traditional back office services
All expenditure, but particularly teaching and support staff costs which represents the highest proportion of
college costs, need to be investigated to achieve the necessary 25% overall cost reduction.
Source: (1)“2008-2009 Benchmarking data”, LSC, 2010; (2) Interviews
Commentary
 The government has mandated a 25% cut in FE college
expenditures
 Back office services (within administration) can only
generate meagre savings (4.37%) of overall cost savings
- A 25% cut in administration expenditures and others
expenditures results in an overall reduction of 4.37% and
1.63% respectively
 A small % cut in teaching staff and support staff
expenditure will yield major costs benefit as this segment
constitutes close to 75% of total expenditure
- A 25% cut in teaching staff and support staff expenditure
results in an overall reduction of 18.75%
Teaching staff
and support
staff costs
75.0%
Administration
17.5%
Others
6.5%
Teaching staff
and support
staff costs
56.25%
Administration
13.12%
Others
5.06%
FE Benchmark
college with normal
operations
FE Benchmark college
with 25% reduction
across operations
Reduce by
25%
Reduce by
25%
Reduce by
25%
100%
75%
Major cost
reduction
will come
from here

Presentation Title
DRAFT
Shared Service Examples
FE colleges must look beyond traditional shared services to other innovative
classroom and student shared services to achieve necessary cost savings
Traditional back office shared services could be considered areas for ‘quick wins’, where as innovative
shared services provide the real opportunity for significant cost savings and long term gain.
 Allows continuity and resilience of
service
- Colleges don’t have to discontinue
current services to move to shared
service solution
 Secures cost savings and sustainable
efficiencies by avoiding duplication
- Colleges can link various departments
and allow information and data sharing
preventing undue duplication
 Releases staff time for more customer
facing activities
- Colleges can automate processes
reducing staff needs
 Improves systems scalability and
collaboration with other institutions
- Colleges can add new software modules
and scale up their systems
Proven benefits of
implementing a shared
service1
Source: (1)“Association of Colleges Shared Service Awareness Seminar”, AOC, 2010
1 2 3 4 5
Traditional back office shared
service examples
Innovative shared services
examples
Human Resource Management Parts of academic registry
Payroll/IT/Procurement
• Currently limited use of shared services by
FE colleges
Examination support
• E.g. Question paper development/printing
Student Services
• Education maintenance allowance
processes
Reprographics procurement
Safeguard (trip management processes) Customer Relationship Management
Safeguarding checks and data management Continuous professional development
Quality assurance
Archiving - electronic document management

Presentation Title
DRAFT
Non financial Benchmark Metrics
FE colleges can gain insights into the quality of the learning experience they
provide from non financial metrics
Whilst attempting to achieve huge cost savings, FE colleges must beware of focusing too narrowly on the
financial aspects of their services to ensure they continue to focus on quality of education.
(a)Benchmark data is the average data value of 356 FE Colleges
Source: (1) “2008-2009 Benchmarking data”, LSC, 2010; (2)”Vince cable letter to Skills Funding Agency”, BIS, 2010; (3)”Focus interviews with Capgemini”, 2010
Non-financial metricsa (2008-2009)1
Parameters FE College
Benchmarka
 Average Student learner
number(SLN) per teacher 21
 Average SLN learners per
support staff 74
 Average student learner
numbers per admin staff 77
 No of Full time equivalent
learners per personal
computer
5
Commentary
 One of the government’s key agenda items is to drive FE
sector cost savings without diluting the quality of education
delivered
 Comparing non-financial metrics against other colleges, or
with the sector average, can provide critical insights for
colleges regarding infrastructure, student experience and
the quality of education provided
 Having robust non financial metrics results in superior
quality assessments that allow a college to maintain student
participation and prevent undue drop-out cases3
− This is a critical factor in FE as a large number of students
pursue courses after many years of study break

Presentation Title
DRAFT
Barriers to Implementing Shared Services
Only by breaking down cultural barriers and collaborating more extensively
will FE colleges be successful in both reducing costs and improving quality
The FE sector needs a fundamentally new model that shows how collaboration will generate tremendous
value on a much lower cost base.
(a)SAF: Science and Arts Foundation; (b) OFSTED: Office for Standards in Education
Source: (1)” JISC Study of Shared Services in UK Further and Higher Education”, JISC, 2008 (2) “Delivering Value for Money through Infrastructural Change”, KPMG, 2010; (3)“JISC Study of Shared Services
in UK Further and Higher Education” JISC, 2008 (4) Focus interviews with Capgemini, 2010
Cultural
Resistance
Regulatory
bottlenecks
Lack of trust &
understanding
Initial cost
 Most FE colleges have principally viewed shared services as a medium of delivery of better services rather than
as a medium of becoming more leaner organisations1
- This is a new situation for the colleges and there is resistance to this thinking
 FE college principals are not accustomed to collaborating with other college heads, which is a necessity if a large
scale shared services are considered1
 VAT and corporation tax act as a hindrance in acquiring commercial services by the FE colleges as the colleges
have to pay a 17.5% tax 2 on the purchased service amount
 The inflexibility of the SAFa , OFSTED’s3 inspection regime and the audit regime on single institution practice do
not provide any incentive to FE colleges to share information and services
 Many FE colleges are reluctant to rely on a third party for service delivery and are concerned over loss of local
control over critical services2
 Most shared services success stories are in the private sector which are much larger than the FE sector and this
leads to lack of comprehensive understanding of the benefits of adopting shared services
 To set up a shared service centre requires a level of capital investment and many FE colleges are not keen to
invest in anything new4
- FE colleges have legacy systems and cannot accurately gauge the benefits/ROI of shared services

Presentation Title
DRAFT
Contents
5 Conclusion
1 2 3 4 5

Presentation Title
DRAFT
The FE sector can look at existing practices employed elsewhere to indentify
potential solutions to its challenges
Best practice examples
Implementation examples
Organisation Best practice employed
1 MedCom
Harnessing Electronic Data
Intercgange (EDI) within
healthcare
2
E-procurement
Scotland
Joint procurement by governmental
departments
3 FE Sussex
Joint procurement through local
community model
4
West Nottingham
college
Integrated print management
5
Stratford-upon Avon
college
Remote access provided for staff
and students
6
University of
Westminister
Integrated software deployment
across HR/Payroll
There are many opportunities to improve administrative and other efficiencies and the FE sector can look to
other sectors for inspiration.
Source: University of Westminister”, SAP, 2009; Upon-Avon college delivers flexible working and remote access to staff and students” IT Backbones, 2010; eprocurement for Public sector”, Capgemini, 2010
Potential solutions identified
 Colleges can implement specific software
packages for activities such as payroll/HR,
student enrolment and others
 A comprehensive procurement system
across the sector could increase the
bargaining power of colleges as well as
reduce costs through economies of scale
 The use of Electronic Data Interchange (EDI)
across colleges could improve data
transferability, simplify report generation for
local authorities and save administrative
costs
Best Practices – Seeds of a solution 1 2 3 4 5

Presentation Title
DRAFT
MedCom developed electronic data exchange standards for healthcare
organisations, leading to considerable benefits
 The Danish healthcare system was faced with a 20-30% funding cut during 1994
 Uncoordinated IT projects and paper-based communciations led to inefficiencies
MedCom, Denmark’s IT coordinating body, developed national standards for EDI to be
used by hospitals and doctors
 These standards were shared through local projects (funded by the counties) with usage and
compliancy details published to encourage adoption
 Healthcare networks and organizations were linked to a central hub
 EDI has led to €872m in savings
 GPs could save almost 30 hours of secretarial work per week through use of the new standards
 EDI has been widely adopted, with 98% of Denmark’s GPs and all hospitals and pharmacies
now using it
Electronic data interchange (EDI) (1/6)
Source:” Denmark's Achievements With Healthcare Information Exchange”, Gartner, 2006
Situation/
complication
Solution
Benefits
Implementation
challenges
 Standardised data exchange capabilities will allow colleges to communicate easily with each
other and with local authorities
 Adopting this practice addresses the policy, funding and learner aspect of the three drivers
- Local authorities and colleges have better overview of data
- Students will have an improved experience as all their data will be integrated
FE sector
implications
 Colleges may have a lack of experience in data exchange projects
 There may be cultural barriers to collaboration between colleges

Presentation Title
DRAFT
“eProcurement Scotland” demonstrate how a public/private partnerships can
successfully implement joint procurement solutions
 Scotland’s public sector’s was faced with disparate procurement solutions across government
agencies
 Non-consistent reporting resulted in high transaction costs as departments procured separately
 Audit trails were poor, resulting in lack of overall view of the process
The government deployed “eProcurement Scotland” - a fully managed service for central
government, local government, FE/HE and the NHS, allowing them to buy goods and
services online
 Expected savings of £200 m per year across Scotland through collaborative sourcing - initial
estimates expected Glasgow council alone to save £21 m from 2006-2009
 No general joining or service management charges for suppliers and no transaction fees
 Greater efficiency and time savings as order to delivery time is reduced
eProcurement (2/6)
Source: “eprocurement for Public sector”, Capgemini, 2010
Situation/
complication
Solution
Benefits
 There is a lack of experience in collaboration between colleges, and with outside organisationsImplementation
challenges
FE sector
implications
 FE colleges can become part of a larger public sector procurement process
 Adopting this practice addresses the policy and funding aspects of the three drivers:
- Local authorities have better visibility of procurement activities
- Colleges save costs through sourcing economies of scale and standardisation
1 2 3 4 5

Presentation Title
DRAFT
12 FE colleges from Sussex formed a limited company (FE Sussex) to conduct
joint procurement, leading to £250,000 savings
 FE Sussex faced a number of challenges prior to the introduction of joint procurement:
- Disparate procurement solutions used across colleges resulted in high transaction costs
- Siloed procurement did not harness best practices
A limited company named “FE Sussex” was established to coordinate joint procurement of
services (computers , energy and from Aug 2010 also food, cleaning materials, fixtures and
fittings)
 “FE Sussex” is jointly owned by12 FE colleges in Sussex
 Each college Principal was made a director of the procurement company ensuring shared
ownership and accountability
 £250,000 in assessment savings to date
 £35,000 savings in external Health and Safety consultant costs through central appointment
Joint procurement (3/6)
Source:”About us”, FE Sussex, 2010; “Collaboration: A case study in Sussex”, FE Sussex, 2008
Situation/
complication
Solution
Benefits
 FE colleges can form clusters/groups for joint procurement to realise significant sourcing benefits
and share best practice
 Adopting this practice addresses the funding aspect of the three drivers:
- Colleges benefit by mass scale sourcing, standardisation resulting in cost savings
Implementation
challenges
FE sector
implications
 There is a lack of experience in collaboration between colleges, and with outside organisations

Presentation Title
DRAFT
FE sector
implications
West Nottingham college deployed multi-functional instead of conventional
printers and achieved £1.1m savings in print services and consumables
 West Nottingham college managed its print services in an inconsistent manner - buying desktop
printers (laserjet, inkjet and deskjet), renting/leasing photocopiers five-year agreements and
outsourcing central reprographics centre work for large and specialist print runs
 Operations were not streamlined and there was lack of accountability of individual departments
over their print budget
West Nottingham introduced multi-functional Devices (MFD), enabling staff to connect to a
network of machines for printing and photocopying
 Controls in place to prevent the purchase of individual devices
 The college saved almost £1.1 m over a five-year period as a result reduced contract costs for
print services and consumables and tighter budgetary control
 It saved £50,000 per annum on consumables by re-letting the ink cartridge contract via a
consortia framework agreement and ordering ink cartridges via e-procurement
Integrated print management (4/6)
Source:” “West Notts College, Cost savings through integrated print management, BECTA, 2010
Situation/
complication
Solution
Benefits
 Switching from individual devices to MFDs is a straight-forward way to save costs
 Adopting this practice addresses the funding and learner aspects of the three drivers:
- Colleges save as multifunctional machines have lower per-page costs
- Students have a better experience as they now have to use only one machine for the
printing, scanning and copying needs
1 2 3 4 5

Presentation Title
DRAFT
Implementation
challenges
FE sector
implications
To offer improved access and flexibility, Stratford-upon-Avon College
provided remote access services for both students and staff
Remote access facilities (5/6)
Source:””stratford upon avon delivers flexibe working and remote access to staff and students”, IT backbones, 2006
Situation/
complication
Solution
Benefits
 Stratford-upon-Avon College wanted to provide remote access to its network from public
places (such as libraries) to its students and teaching staff
 Data security and privacy were of the utmost importance and different access rights based on
user profiles and roles
The college connected its network to Warwickshire Council's library IT network to provide
county-wide secure access
 The solution used library membership login details and a unique student identification number
to enable access to specified applications and data files
 The solution is accedes through the normal Windows terminal server login
 Flexible and remote working capabilities
 Secure login capabilities and minimal impact upon the installed base of PCs in the county
libraries
 As many students are located away from the college, there is an incentive for colleges to
deploy remote access facility to target new students
 Adopting this practice addresses the learners aspect of the three drivers:
- Learners benefit from improved access and greater flexibility
 Security, potential unauthorised system intrusion and initial investment could hinder roll-out
1 2 3 4 5

Presentation Title
DRAFT
Implementation
challenges
FE sector
implications
The University of Westminister deployed SAP’s HR and payroll system
improve administrative efficiency
Situation/
complication
Solution
Benefits
Integrated back-office software systems (6/6)
 The University of Westminister was unable to generate automated reports, leading to
information gaps which hinder effective decision making
 The Cobol-based systems used were unable to cope with increased demand, leading to
higher costs and delays in payroll processing
 There was an increasing demand from central government for statutory reporting
 There was difficulty in sourcing people to service the legacy systems
The University replaced the legacy HR and payroll systems with integrated human capital
management (HCM) software
 The new system functionality is more regularly updated
 The solution integrates with the University’s existing database
 Simpler data integration across a wide variety of applications (payroll, card access, online
recruitment forms) resulted in faster decision making
 FE Colleges can consider software systems which integrate various functions such as HR
and payroll
 Adopting this practise address the funding aspect of the three drivers:
- Colleges can reduce duplication and develop better strategies through an integrated view
of HR and finance/payroll processes
Source:”University of Westminister”, SAP, 2009
 High initial costs (for purchase and deployment) may restrict adoption
1 2 3 4 5

Presentation Title
DRAFT
Organization Best practice employed
Denmark healthcare sector Electronic data interchange a a a
E-procurement Scotland eProcurement a a r
FE Sussex Joint procurement a r r
West Nottingham college
Integrated print
management
r r a
Stratford-upon Avon college Remote access facilities r r a
University of Westminister
Integrated back-office
software systems a r r
These examples demonstrate potential opportunities available to FE colleges
to address the three drivers of transformation
Optimising the drivers of transformation will allow FE colleges to improve service while cutting costs in the
face of fiscal pressures.
Best practice and drivers of transformation
Funding Policy Learners
Drivers of transformation1
1 2 3 4 5

Presentation Title
DRAFT
Contents
The shared Value Network
5 Conclusion
1 2 3 4 5

Presentation Title
DRAFT
The transformation of FE colleges should be customer focussed, market
driven, collaborative, innovative and financially sustainable
This transformation calls for a network where FE colleges work together, learn from each other, and create
value that can be transferred shared.
The implications of these principles
Innovative
thinking
Collaborative
working
Customer
Focused
Market
Driven
Financially
Sustainable
The principles of transformed FE colleges
 Customer-focused : The strategy, operations, and
culture of a college are always focused on creating
rich learning experiences
 Market-driven: Colleges respond quickly to labour
market changes and offering programs that
employers really need
 Collaborative-Working: Colleges work together in
shared service arrangements and joint curriculum
development
 Innovative-Thinking: Colleges develop alternative
learning delivery modes, improving operational
effectiveness, and fostering teaching excellence
 Financially sustainable: Colleges optimise the
efficiency of operations, and ensure that existing
revenue streams are stable and new ones are
being constantly developed
The five principles1
1 2 3 4 5

Presentation Title
DRAFT
The Shared Value Network (SVN)
The Shared Value Network is an integrated vision for FE colleges that holds
the principles of transformation at its heart
A Shared Value Network will give FE colleges access to wide range of services which they can deploy
according to their own strategic objectives.
How does the SVN work?
 The Shared Value Network is built around
the principles of transformation
 These principles must underpin all three
types of services (classroom, student,
college): giving colleges the greatest
scope for cost savings and improved
quality
 Colleges can select from different clusters
of services to create bespoke shared value
networks that match their specific needs
 A Shared Value approach to classroom
services could allow some colleges deliver
courses jointly through a virtual learning
environment (VLE)
Classroom
Services
e.g. VLE, E-books
Student
Services
e.g. Next Step
College Services
e.g. HR, Payroll, IT
Elements of the SVN1
Innovative
thinking
Collaborative
working
Customer
Focused
Market
Driven
Financially
Sustainable
1 2 3 4 5

Presentation Title
DRAFT
A Tailored Shared Value Network (1/2)
The Shared Value Network affords colleges great flexibility to assemble a
portfolio of services tailored to their own needs
 Colleges can construct their own shared value
networks by choosing from a range of services made
available on a common platform
 Colleges can select services and service levels
based on their needs – they can pick the services
needed and retain their existing platforms where
preferred
 The Shared Value Network respects the autonomy of
colleges to decide what is best for each of them,
while giving them a powerful instrument to improve
service and reduce cost
 It is market-driven - each college will determine
requirements based on its competitive position,
strategic priorities, and customer needs
Tailored Solutions
The Shared Value Network is not a homogeneous solution, instead it allows colleges to decide how best to
implement services for maximum advantage .
VLE
Finance
IT
HR
Next Step
Student
Records
WhiteboardE-books
Library
Services
Classroom Services
College
Services
Student
Services
Shared Value Network1
1 2 3 4 5

Presentation Title
DRAFT
VLE
F&A
IT
HR
Next Step
Student
Records
WhiteboardE-books
Library
Services
VLE
Finance
IT
HR
Next Step
Student
Records
WhiteboardE-books
Library
Services
VLE
F&A
IT
HR
Next Step
Student
Records
WhiteboardE-books
Library
Services
VLE
Finance
IT
HR
Next Step
Student
Records
WhiteboardE-books
Library
Services
A Tailored Shared Value Network (2/2)
Tailore
The Shared Value Network is a suite of services which colleges can leverage
to suit their needs and facilitate collaboration
Figure 1: College A1 Figure 2: College Ba
Figure 1: College A is using the Shared Value Network for a number of college services (HR, IT, Finance), while opting not to participate
in E-learning (VLE)
Figure 2: College B is using the network for for classroom services (e.g. VLLE) and Student Records. It is choosing to keep its HR, IT,
and Finance functions in-house
The black line
indicates the
services and level
selected – the
further from the
centre, the greater
the level of SVN
service employed
1 2 3 4 5

Presentation Title
DRAFT
Contents
3.1 Classroom services
3.2 Student services
3.3 College services
5 Conclusion
1 2 3 4 5

Presentation Title
DRAFT“Most students today are more comfortable working on a keyboard than writing in a spiral
notebook...Constant connectivity… is of utmost importance.”1
Customer-focused learning: The Digital Natives
Today’s students are comfortable in the digital environment and
colleges must adapt to the way they manage information
Digital learning technologies can transform sthe way education is delivered and learning is experienced .
Source: (1) “The information mindset:”Changes in students and implications for higher education,” EDUCAUSE Review, 2006; (2) “Information behaviour of the researcher of the future,” UCL, 2008; (3) Interview,
Director of MBA Distance Learning, Warwick University; (4) “Information behaviour of the researcher of the future,” UCL, 2008; (5) “eGovernment Benchmark Measurement,” European Commission
Directorate for Information Society and Media, 2009.
 Search engines fit college students’ lifestyles better
than online libraries (a fit that is nearly perfect)2
 College students are heavy users of digital
interactive technologies and social networks, and the
intensity of that usage is increasing
 They prefer interactive information and
communications technology systems, and are
turning away from being passive consumers of
information3
 They are more accustomed to working with visual
information4 and place a high value on accessibility
and user-friendliness5
Students’ digital preferences
 Colleges need to invest heavily in E-library delivery
systems and library infrastructure spend
 Online communities should form a key part of
teaching strategy to boost student participation
 Tools like virtual seminar rooms can be used to
increase student engagement (director distance
learning Warwick)
 Digital technologies can be exploited to deliver
multimedia content
 FE colleges must consider that not all students
have equal access to technology and must pursue a
blended learning strategy (a mix of digital and
traditional learning)
Solutions for colleges
Classroom Services
Student Services
e.g. Next Step
College Services
e.g. HR, Payroll,
IT
The shared Value Network 1 2 3 4 5

Presentation Title
DRAFT
Digital learning tools
Digital technologies and infrastructure have yet to become an
integrated part of FE education delivery
Digital learning offers benefit in every aspect of learning delivery and colleges should look to overcome
barriers to harness this.
Source(1) “Migrating to e in UK Further education” JISC, 2010
Virtual learning environments (VLE)1
 The UK government is encouraging colleges to utilise digital technology to support
face-to-face teaching and learning
- In a globalised world, virtual learning provides immediate benefit for remote learners
through improved access and flexibility
 The full potential of VLE as a learning tool is not currently being harnessed by FE
colleges
- Colleges generally use electronic platforms for administrative activities such as student
registration, authentication, and submissions
- Although access to the “eBooks for Further Education” is provided by 88% of colleges,
only 38% provide access to virtual learning environments
eBooks/E-library1
 The government’s “e-books for Further
Education Project” provides colleges
with access to a core collection of
eBooks
- eBooks provide a cost effective content
distribution option
- Shortages of physical copies of research
articles can be overcome through the
use of eBooks - Sports Management
students are using them to this end
 In order to use eBooks, colleges must
be Athens or UK Federated Access
Management compliant
- As few colleges have achieved this,
widespread of eContent has been
restricted
Classroom Services
Student Services
e.g. Next Step
College Services
e.g. HR, Payroll,
IT
1 2 3 4 5

Presentation Title
DRAFT
Benefits of digital learning
Digital learning offers opportunities to improve both college
performance and the student learning experience
Digital technologies are reshaping the learning experience, and offer opportunities to provide exceptional
customer value.
Digital
Learning1
Greater consistency of
teaching delivery
Enables self-pacing to
suit different learning
styles
On-demand access - 24/7
Enables non-linear
interaction and two-
way media
Greater retention and
absorption of content
Improved
collaboration
Classroom Services
Student Services
e.g. Next Step
College Services
e.g. HR, Payroll,
IT
1 2 3 4 5

Presentation Title
DRAFT
Fragmentation of ICT providers across student services
There is considerable fragmentation of student services software
and systems chosen across the Further Education sector
The Shared Value Network would reduce fragmentation by limiting the number of suppliers and ensuring
standardisation and interoperability across the chosen ICT solutions.
(a) LMS: Library Management System
Source:: (1)“Software used in FE”, JISC, 2008
Student records systems in FE colleges, 20081
Library systems in FE colleges, 20081
 Colleges currently have decision-making autonomy which
has led to the fragmentation of ICT providers across the
sector
 Fragmentation causes considerable challenges
including:
- Poor interoperability
- Low standardisation
- A barrier to adopting a “shared service” mindset
- Multiple service level agreements
 Improved interoperability will improve communication
between colleges and reduce training and licensing
costs
CommentaryFragmentation implications
Student Services
College Services
e.g. HR, Payroll,
IT
Tribal – 32%
Capita – 28%
Agresso – 18%
In-house – 7%
Pre solution – 5%
Others – 10%
Heritage – 46%
Sirsi – 15%
Autolib – 12%
Olib – 5%
Infor – 5%
Others – 17%

Presentation Title
DRAFT
The Next Step delivery model
Next Step provides both a service to support FE colleges and an
example of service best practice
FE colleges can consider adoption of Next Step as a careers advice service, and the introduction of FE -
specific centralised platforms like Next Step.
Source: (1)Next step website:
Next Step
- Skills health check
- Build CV
- Podcasts/Cover letters
- Course search
- Job profiles
- Discussion forum
The benefits of next step
 Next Step allows students to access
career guidance services over the
internet or over telephone
- The portal offers a wide variety of
services in a central location
 This model can be replicated to
centralise other transactional services
required by colleges
- These services could include
admissions counselling and rostering
among others
 Most colleges have several resources
offering career services, at
considerable cost
- A consolidated solution across colleges
could reduce resource cost without
affecting quality
Students
Next Step1
Web
Telephone
Email
Student Services
College Services
e.g. HR, Payroll,
IT
1 2 3 4 5

Presentation Title
DRAFT
Fragmentation of ICT providers across college services
As with student services, college services also demonstrate
high fragmentation amongst software vendors
Fragmentation implications
 Colleges currently have decision-making
autonomy which might explain the
fragmentation of ICT providers across the sector
 Fragmentation causes considerable
challenges including:
- Poor interoperability
- Low standardisation
- A barrier to adopting a “shared service”
mindset
- Multiple service level agreements
 Improved interoperability will improve
communication between colleges and
reduce training and licensing costs
The Shared Value Network would reduce fragmentation by limiting the number of suppliers and ensuring
standardisation and interoperability across the chosen ICT solutions.
HR systems in FE colleges, 20081
Payroll systems in FE colleges, 20081
Source: (1)“Software used in FE”, JISC, 2008
College Services
Frontier – 14%
Select HR – 13%
Software for people – 7%
Agresso – 9%
Northgate – 7%
In-house – 7%
Others – 43%
Rest – 54%
Northgate – 4%
Ceridien – 4%
Sage – 4%
Don’t know – 16%
Frontier – 12%
Cintra – 5%

Presentation Title
DRAFT
eChannels
In the wider Education sector, eChannels is an example of an integrated, customer-
centric approach to service delivery
Connecting colleges and local authorities will allow colleges, students and policy -makers to access
superior information to aid better decision making.
Source: (1)“Project eChannels introduction pack”, Department of children, schools and families, 2009
 eChannels is the UK department of education’s single online
portal1
- Currenly two eChannels, (schools and corporates) have been
identified to serve as the first point of contact/communication
between the Dept. for Education and the public
- All previous sites such as Standards site, Teachernet and many
other micro sites have been integrated into the eChannel
 eChannels provides:
- A personalised user experience
- Fast and easy access to information and resources
- Opportunities for the public to influence policy and the
department’s strategic objectives
 The FE sector can also develop a single online portal where
multiple local authorities or colleges are connected
- This will not only allow easier access to information but will
foster a sense of connection among the sector participants
Commentary
Simple, clear
navigation
Simple and
consistent
design
Rich and
relevant
content
eChannels online service1

Presentation Title
DRAFT
Shared Value Network- Everyone Benefits
The Shared Value Network will save costs, provide greater opportunities for
innovation, and enrich the experience of teaching and learning
The benefits of a Shared Value Network will be widely distributed among colleges, students, teachers, and
funding providers.
Source: (1) “Cloud Computing,” CSC, 2010; (2) Interview, Head of Capgemini University ; (3) Interview, Director of MBA Distance Learning, Warwick University.
Cost
savings/
Capital
preservation
Commentary
Cost Savings/Capital Preservation1
 Lower direct and indirect staff costs
 Pay-as-you-use consumption
 Predictability of software running costs
• De-assetisation of IT2
 Shift investment risk to vendors
Innovation
Ability to access scale on demand will more
innovation in:
 New courses, services, delivery models,
business models
 Access others’ services and programs
through the Shared Value Network
Improved Learning/Teaching
 Expanded learner choice
 Deepen learning as an interactive
experience3
 Strengthen teacher’s role as curriculum
developer
Benefits of Shared Value Network

Presentation Title
DRAFT
Benefits- Cost Savings/Capital Preservation (1/3)
The Shared Value Network will lower FE colleges’ operating costs, capex, and
investment risks
The Shared Value Network will allow FE colleges to run on a lower cost base with fewer fixed assets.
Source: (1) “Cloud Computing in Institutions,” JISC Cetis, 2009.
Lower direct/indirect staff
costs and IT costs
Pay-as-you-use
consumption
Predictability of
software running costs
De-assetisation of IT
Shift investment risk to
vendors
• Rather than having servers owned by a college, which sit in its buildings, hooked up to the
entire college network, and maintained by its employees, in the Shared Value Network the
servers, buildings, network infrastructure are owned and tended to by a third party1
• Managing during peak enrolment periods in September impose heavy demands on IT assets.
Buying this capacity means expensive systems are underutilised during off peak times. The
Shared Value Network allows colleges to rent computing capacity quickly and flexibly.1
• In the Shared Value Network, many IT-related costs change from fixed to variable costs.
Knowing when its services experience heavy demand will give colleges greater cost certainty.
• Because many of its services will be hosted by outside parties, it is they and not colleges who
bear the risks associated with expensive infrastructure
• A fundamental cost driver in the Shared Value Network is economies of scale. Unit costs drop
when a service is run across many colleges. As well, depending on nature and configuration
of courses, fewer teachers would be necessary, as would the administrative staff supporting
them. Furthermore, there would be less spend on IT running costs and software licences.

Presentation Title
DRAFT
Benefits- More opportunities to innovate (2/3)
Easy access to scale economies through the Shared Value Network will
provide FE colleges tremendous scope for low risk innovation
The Shared Value Network will enable FE colleges to be more entrepreneurial in both course and business
development.
Source: (1) “Cloud Computing in Institutions,” JISC Cetis, 2009; (2) “Moving Towards e-Learning in the FE College sector: Models of Resource Planning at the Institutional Level, Price, Coopers, Waterhouse,
2004.
New Courses/
Services
New Delivery
Models
New Business
Models
Tap others’
best practices
If colleges want to develop a new course or try a new type of service with unknown demand,
the Shared Value Network will allow them to develop and deploy rapidly, without the need to
invest in IT infrastructure or software licences.1
By giving colleges access relatively inexpensive access to a wide range of digital learning
technologies, the Shared Value Network would accelerate the introduction of elearning in the
FE college sector.
The Shared Value Network’s scale advantages could make it attractive for colleges to offer
programs that would not be economical on a local level. A college could use e-enabled
distance learning to develop and market programs to widely dispersed niche segments
Through the Shared Value Network, colleges could get access to services that fellow colleges
have developed and deployed successfully, and likewise make its own successes available to
create alternative revenue streams.

Presentation Title
DRAFT
Benefits- Improved learning and teaching (3/3)
The Shared Value Network will make it easier for FE colleges to incorporate
digital learning technologies into pedagogical practice and program delivery
Low cost access to VLE and other cutting edge technologies will invigorate the experiences of learners and
teachers.
(1) Interview, head of Capgemini University; “Moving Towards e-Learning in FE College Sector: Models of Resource Planning at the Institutional Level,”
Expands learner
choice
Deepens learning
as an interactive
experience
Strengthens
teacher’s role as
curriculum
developer
Higher penetration of digital learning technologies across FE colleges means students will
have access to programs outside local area. This also gives students greater flexibility in
combining work with study, and greater convenience when learning delivery can handle
multiple platforms (eg. mobile). Asynchronous delivery allows students to learn at their own
pace.1
VLE gives students superior access to multimedia content, and more ways to interact with
students and teachers that cannot be accommodated within traditional classroom settings (eg.
virtual seminar rooms)
Because the Shared Value Network will give colleges low cost access to the broader UK FE
market, there is an incentive for them to create programs with a wider geographical appeal, or
develop expertise in specialist areas, putting a premium on the ability of colleges to develop
content.

Presentation Title
DRAFT
Contents
5 Conclusion
1 2 3 4 5

Presentation Title
DRAFT
Colleges can procure services from different vendor clusters by being part of
the Shared Value Network
The Shared Value Network delivery model1
Classroom/college/student services
 The Shared Value Network (SVN) will consist of
different vendors from each of the classroom,
student and college service areas
 Unlike many fragmented vendors, the SVN will
consist of ordered or selection of best-of-breed
vendors
Service integrator
 The service integrator will act as an interface
between the vendors and the colleges
- Some key functions of the service integrator will
include vendor selection, regulation and
marketing
Colleges
 Colleges will have great flexibility in choosing the
vendors that are most appropriate for their
individual circumstances
Commentary
The ecosystem of classroom, student, and college services available through the SVN will ensure assured
quality services by vendors and also give colleges high level of flexibility in choosing services.
Shared Value Network – Delivery model
Service integrator
College
1
College
2
College
3
Vendor Choice
College Services
HR
- Frontier
- Select HR
- Agresso
Finance
- Agresso
- Symmetry
- Corero
Echannels
- National
vendor
College Services
Nextstep
- National
vendor
Library
systems
-Heritage
-Sirsi
-Autolib
Student
records
-Tribal
-Capita
-Agresso
Classroom Services
VLE
- Moodle
Ebooks
- Vitalsource
Whiteboard
Delivering a Shared Value Network 1 2 3 4 5

Presentation Title
DRAFT
Vendors characteristics, selection and criterion
The service integrator will select cost effective vendors based on factors
including interoperability, technology, quality and security
Delivering a Shared Value Network
 Vendors within the SVN will
provide different services
including
Classroom services
- E-books, VLE, Whiteboard
Student services
- Nextstep, Library, Student
records
College services
- Finance, IT and HR
 Over time, the SVN will also
have colleges who can be
vendors by sharing their best
practices with other network
participants
Who are the vendors?1
 Vendors must be chosen
based on key parameters
including:
- Cost effectiveness
- Interoperatibility
- Maturity and scalability of
technology used
- Level of security provided
- Ease of implementation
- Functionality
How are they selected?1
 Vendors will be assessed on
parameters which allow the
SVN to expand and flourish.
These parameters will include:
- Compliance with the policies
and regulations governing the
network
- These will be set up by the
service integrator
- Ability to collaborate with
other network participants
- Alignment with the SVN
strategy
- Contribution to the SVN
- Compliance with UK
financial/data security laws
How will they be assessed?
The service integrator must be chosen so that it aligns with the success criterion set by the network.
1 2 3 4 5

Presentation Title
DRAFT
Deriving Success from the SVN1
Colleges enjoy the flexibility to pick and choose the services they will take
from the SVN
The movement from decision to usage is flexible (choosing services they want), incremental (adding services as the need
arises), and controlled (selecting from approved vendor lists)
Before deciding to join
the SVN, colleges must
consider the financial,
learner, organisational,
technical, local, and
policy implications.
Classroom
Services
Student
Services
College
Services
Key Decision Levers Evaluation UsageJoining Process
LightConsumer
HeavyConsumer
ComplexConsumer+
Provider
LightConsumer+Power
Provider
Financial
Learner
Organisational
Technical
Local
Policy
Colleges can evolve both in the range of services they take from the SVN and their role within it.
Colleges must then ask what kind of services
they want from the SVN. Based on the decision
levers to the left, colleges can decide which
services from the various service clusters they
will take. When circumstances change, colleges
can add more services
Once in the SVN, colleges should
engage in continuous review that
proceeds from a needs and cost/benefit
analysis, to vendor selection, and finally
to deployment and impact assessment.
Colleges can gradually expand the
services they take from the SVN. They
can begin with a few services, add more
later, and even provide services
themselves
Continuous
review
1 2 3 4 5

Presentation Title
DRAFT
Evaluation-Key Decision Levers
In becoming a part of the SVN, colleges must understand their requirements,
which determine the level at which they join
m
Key
Decision
Levers1
* See Appendix: Refer to Appendix
The evaluation of whether a college should join the SVN will be shaped by a unique combination of financial,
learner, organisational, technical, local, and policy factors.
Financial- deals with all cost and
revenue implications
Learner- covers factors such as
learner types, learner needs, and
program requirements
Organisational- includes
structural and human resource
capabilities
Technical- covers all IT issues
that affect the ability to operate in a
SaaS environment *
Local- deals with factors such
local economic conditions, local
relationships, and employer needs,
Policy- covers all compliance
issues, plus a college’s short and
long term goals
New revenue streams
Projected cost savings
Projected transition costs (e.g.
training, hardware investments, re-
negotiating service level agreements)
Learner age
Program stream
Evaluation tools
•Pedagogical requirements
Familiarity with digital technology
Staff/management skills
Quality of technology team
 Culture of innovation
Quality of planning structures
Software licensing agreements
IT capabilities
Interoperability
Network robustness
Labour market conditions
Local industry (mfg. vs. service)
Connections to local universities
Strategic objectives
Governance
Risk Management
Factors to Consider
1 2 3 4 5

Presentation Title
DRAFT
A Common Platform Satisfying Different Requirements
Colleges can select from leading vendors in each of the three service areas based
on their fit with the college’s decision levers
Source (1) Focus interviews with Capgemini, 2010

Shared Value Network Service Profile: College A and B
 The services could be delivered through a national provider, through the Shared Value Network, while the rest could be
kept in-house 1
The Shared Value Network offers colleges great flexibility in vendor selection
 The Shared Value Network’s Service Profiles in the diagram above show how colleges procure some parts of each
service cluster differently, reflecting their different priorities
 College A has decided to keep more college services in-house than does College B, while taking greater advantage of
the Shared Value Network to deliver classroom services in a virtual setting
Selected vendor
College Services Student Services Classroom Services
Finance echannels HR Next Step Library
Student
records
Ebooks VLE
Student
records
Vendor1
Vendor2
National
Self
Vendor1
Vendor2
National
Self
Vendor1
Vendor2
National
Self
Vendor1
Vendor2
National
Self
Vendor1
Vendor2
National
Self
Vendor1
Vendor2
National
Self
Vendor1
Vendor2
National
Self
Vendor1
Vendor2
National
Self
Vendor1
Vendor2
National
Self
College
A


      
College
B
        
1 2 3 4 5

Presentation Title
DRAFT
SVN joining process of FE college
When joining the Shared Value Network, colleges will initiate a
continuous review process, evaluating their future needs and services
Project initiation Vendor selection Service deployment Service transition
College interested in being part of
Shared Value Network (SVN)
Conduct cost benefit analysis of
business proposition
Request approval from college
principal and board
Evaluate IT requirements
Gather system/business
requirements
Identify service/technology
requirements
Compare total cost of ownership
with SVN adoption
Compare requirements with each
vendor offerings
Identify most critical services
Perform system backup and risk
management analysis
Deploy services
Submit evaluation results to
principal and board
Plan business change
Assess overall impact of SVN
adoption
Align overall requirements with
college strategy
Select vendor
Train staff for SVN adoption
Illustrative FE College joining process1
Colleges must have the flexibility to adapt their business processes and choose services that best fit their
requirements.
1 2 3 4 5

Presentation Title
DRAFT
Traditional vs. SVN Delivery
As members of the SVN, colleges can reduce service costs and improve the
quality of learning and teaching
Services Traditional Delivery Shared Value Network Delivery
Classroom
Services
E-books Traditional text books and notes
Use of e-books translates into delivery and inventory cost savings
They also provide more opportunities to incorporate multimedia content into learning
materials1
VLE/White
board
Physical classrooms as primary
teaching medium
Greater use of virtual learning tools means lower delivery costs, greater student flexibility,
more multimedia rich content, and greater scope for pedagogical innovation
StudentServices
Student
Services
Separate career service , admission
counselling team for career
admissions guidance
Next Step2 will lead to staff and administration cost savings, and more streamlined and
consistent service delivery
Library Services
Traditional library as principal
channel for library services
Greater use of virtual library services means savings in staff, procurement, and
maintenance
Fewer traditional books opens more space for alternative asset uses
Greater digitisation of library services offers more multimedia content options
College
Services
Finance
Separate systems for accounts
payable, taxation, working capital
management
An integrated financial services system leads to lower costs, easier process management,
and improved planning and decision-making
HR
Separate systems for recruitment,
appraisal, and compensation
An integrated HR services system leads to lower costs, easier process management,
improved planning and decision-making
E-channels 3 Multiple portals connecting different
providers and local authorities
A single consolidated portal will lead to more efficient information transmission, superior
customer experience
1 2 3 4 5
Source: (1) Interview, Director of Distance Learning, Warwick University MBA; (2) Next Step website; (3)“Project e-channels: Introduction Pack, 2009.

Presentation Title
DRAFT
Colleges can expand the number of services they take from the SVN and grow
into the role of a service provider
Type Light Consumer
(College takes 1 or 2
services)
Heavy Consumer
(College takes many
services)
Consumer + Small
Provider
(College develops single
applications)
Consumer + Complex
Provider
(College provides many
applications)
Provider
(College develops
applications for SVN)
Financial
Wants to realise cost
savings in fairly narrow
range of services
Wants to realise cost
savings across many
services
Wants some incremental
revenue
Becomes an creator of
applications to build
sustainable revenue streams
Develops application(s) to
reduce costs
Learner
Accesses services
targeting particular
learner needs
Accesses services
targeting many learner
needs
Provides service aimed at a
specific learner need or
particular type of college
Provides service(s) with
wide applicability across the
FE sector
Identifies need(s) facing
particular learner(s)/
discovers ways to improve
teaching practice/delivery
Organisational
Single point of contact
between colleges and
SVN
Cross-organizational
response to shared
services management;
Cross-functional teams
formed when needed
Creates dedicated product
and development teams
Organisational response
varies according to breadth
of services developed and
whether they are deployed
locally or nationally
Technical
Consumers and providers will want assurances in the SVN’s data security capabilities, its robustness, and satisfaction around issues like
interoperability1
Local
Uses services
addressing a small
number of local needs
Use services that
address many local
needs
Provide service targeting
specific local needs
Provide services(s) targeting
specific local need
Provide service(s) targeting
needs of a specific local
area
Policy
Consumers and providers will want sound governance policies for the SVN. Colleges will pursue different strategic objectives (e.g.
Expansion and new program development) at different times, and enjoy the flexibility to move among these categories as necessary to
meet those objectives
Usage Profiles
 Source (1) Interview, Head of the Association of Colleges, 2010.
1 2 3 4 5

Presentation Title
DRAFT
Overcoming challenges to implementation
The SVN addresses the challenges colleges face in moving to a new service
delivery model
Challenges
Cultural Resistance
Compliance Issues
Lack of
trust/understanding
Initial Cost
Local Needs
Colleges must have the flexibility to revisit their business processes and choose services that best fit their
requirements.
Implementation challenges How the SVN overcomes these
challenges
Competition for students and hence funding has made
college principals very reluctant to participate in
shared service arrangements1
The demonstration of tangible benefits in the form
major cost savings and quality improvements should
encourage a culture of collaboration in the sector
Colleges have concerns over data security and
recovery in a SVN delivery model
The SVN is a model for shared service delivery used
frequently in the private sector where data security is
as important an issue as it is in the public sector
Colleges fear giving up control over services they
regard as strategic to third party vendors.
They have concerns surrounding the robustness of the
integrator’s network in a open source
environment, as JANET currently performing
adequately 2
Under the SVN colleges will not give up control over
vital services.
Colleges can pick the services they want to take from
the SVN, pick their vendors, and change or discard
those vendors later if they so wish
Establishing a shared service centre has normally
meant a level of initial capital investment that many
colleges have been unwilling to bear3
Capital expenditures are greatly reduced as vendors
bear investment costs
Concerns over whether shared service delivery will
impose uniform solutions that are insensitive to
colleges’ unique needs.
In the SVN colleges can select services tailored to
their own circumstances
Sources: (1) Interview, Head of information Authority; (2) Interview, Association of Colleges (3) Focus interviews-Capgemini

Presentation Title
DRAFT
Attribute Consumption Consumption+Production +Connections to FE
Description
Level of service
consumption
Consumption is limited as
awareness of SVN’s benefits
still growing
With greater confidence in SVN
performance, consumption levels
increase and production begins
Consumption is high and
production growing as SVN
becomes operating model for FE
Service innovation
Innovation in development is
very strong as new ways to
deploy services are identified
Innovation is extended from
consumption to production
Innovation in consumption
expands as services from HE
sector become available through
the SVN
Level of
collaboration
Collaboration is moderate as
experience with shared service
delivery limited
Collaborative ethos takes root as the
advantages of working within the
SVN are widely accepted
Collaborative structures emerge
to systematically tap into an
expanding range of services
Number of
Colleges
A limited number of colleges
join the SVN, enough to get it
started
More colleges sign up for the SVN Most FE colleges are part of the
SVN
Evolution of the SVN
As the SVN develops, the opportunities colleges have to derive value from it
will expand
Growing appreciation for what
the SVN delivers
Active searching for ways to
exploit the SVN’s performance
potential
Recogntion that even greater
performance means extending the
SVN outward
The Shared Value Network could evolve to the point where FE colleges access services from outside the
sector.

Presentation Title
DRAFT
Dell’s
best practice
National health
service’s best
practice
FE colleges will gain significant benefits through the Shared Value Network’s connection to other multi-
tenanted hosted service providers.
Source (1) Focus interviews with Capgemini, 2010; (2) “NHS SBS partners with Software Europe to improve expense management, Steria, 2009; (3)” Dell's evolution on Twitter“, econsultancy, 2010
Sharing best practices within the shared Value Network1
 The SVN when extended will provide FE colleges with exposure to prevailing best practices in other sectors
 As an example, the NHS’s deployment of an expense management system can be customised to be offered to FE colleges
allowing colleges to make payments fast er and more efficiently2
 Similarly FE colleges can look at Dell’s recent “Twitter” strategy where the hardware giant has consolidated all its twitter
accounts and has also calculated the ROI of its online strategy3
 FE colleges can also become contributors by sharing their own best practices with the network participants
Learning from best practices outside FE`
The Shared Value Network will eventually allow colleges can tap into the best
practices of organisations outside FE sector in the world

Presentation Title
DRAFT
Service integrator Role
The service integrator will play an important role as the central
governing body of the Shared Value Network
Roles of the
Service
integrator1
Publicity/marketing of
services
Service catalogue
establishment &
maintainance
College joining
process management
Regulation setting
Quality assurance of
services
Initial vendor selection
& contracting
arrangement
Best practices/vendor
selection
Service level
agreement setting
The service integrator will need to undertake a wide ranging role in order to effectively organise the SVN
Roles of the Service integrator
Service integrator

Presentation Title
DRAFT
The Service integrator’s operating model must identify the IT services required by
the business to assist all customers to realise their goals
Customer relationship management
(CRM)
Enabling the interface between colleges,
students, vendors and local authorities
Management info systems
Enabling accurate data movement between
colleges, students, vendors and local
authorities
Presentation layer
Web portal solution which acts as the front
end of each network participant
category(colleges, students, vendors and
local authorities)
Customer
Business
IT
Colleges
Educational institutes (FE
Colleges, Academies)
Vendors
IT solutions providers
offering college/student
and classroom services
Private Organisations
Private firms providing FE
services
Other government
departments
Local authorities ,
Association of Colleges,
Young Peoples Learning
Agency
Learners
Different types of learners
by age, demographics,
subject preference, local
address
Awarding bodies Employers
Operating model of service integrator1
Goal: To Create a transformative operational model where colleges, vendors, students, employers and
policy makers work collaboratively in the most efficient manner
Vendor joining
Initial vendor
selection &
contracting
arrangement
Services
catalogue
management
Maintaining
records of
different services
available within
SVN
College joining
management
Helping colleges to
become part of the
SVN
Quality
Ensuring quality
and compliance of
services
Publicity/
Marketing
Approaching new
customers and
ensuring all SVN
participants are
well informed
Regulation
Ensuring
compliance with
SVN and UK
government laws
Best
practices/vendor
selection
Sharing best
practices or
choosing best–of-
breed vendors
Service level
setting
Setting minimum
service levels for
vendor services
External organisation
1 2 3 4 5

Presentation Title
DRAFT
Who can deliver the service integration body1
The service integrator could be a new organisation (government/private) or an
extension of existing body, such as the Skills Funding Agency or AOC
Potential
candidates
Benefits Challenges
New
government
agency
 New mindset, high motivation to achieve results
 No previous organisation structure or processes to
hinder innovation
 Could be susceptible to slow decision making process
 Compliance with different stakeholders within the complex public sector
could hamper smooth operations
 Lack of in-depth sector knowledge might hinder superior judgement and
decision making abilities
Not for profit
(Quangos)
 Neutral organisation and not driven by only profit
motive  Lack of business focus might lead to inefficient execution of the SVN
Part of an
existing
agency
 No need to set up operations, from scratch and can
contribute to FE sector fast
 High likelihood of leveraging prior learning's and
infrastructure
 Previous organisation structure or processes may pose a hinder
innovation
 Delay in decision making
Joint venture
 Complementary strengths of joint partners
 Higher investment potential as compared to a
single public/private body
 Sharing r of risks prevents undue operational
problems
 Lack of ownership as there are more than one owner
 Having more than two key stakeholders can delay decision making
Private
organisation
 High investment capability
 Ability to attract superior resources
 More profit driven and less caring about quality and learners
 Lack of in-depth sector knowledge might hinder superior judgement and
decision making abilities
100%
Private
100%
Public
Colleges can share their bestpractices and in turn can also be vendors to the SVN.
1 2 3 4 5

Presentation Title
DRAFT
IM Services-Service Integrator for the SVN
This operating model opens up a valuable opportunity for IM Services to
become the key organisational provider of shared services into the sector
As the service integrator, IM Services can use its extensive knowledge of the FE sector to help colleges
exploit the array of services in the SVN.
Source: (1) “Adopting Cloud Services-How to unlock the value in your business,” Capgemini, 2009; Interview with Skills Funding Agency, IM Services.
 Provides services for Skills Funding Agency
and YPLA, such as:
• Maintain and support IT infrastructure
• Develop IT-enabled change programmes
• Support application management and
delivery
 However, IM Services also has data-related
roles, such as:
- Data Service
- Learning Records Service
- Information Authority
 Under the Shared Value Network, the
responsibilities of IM Services could change.
Because it has already made a number of
investments in IT that support colleges, it is logical
that IM Services continue to exploit them by acting
as the service integrator for the Shared Value
Network
 IM Services’ responsibilities could extend beyond
its current remit to include business enablement
and service advisory. These might include1:
- Demand Generation
- Service Enablement
- Supplier and Partner Management
- Risk Management
Future Role-Service IntegratorCurrent Role-IT System Administrator
1 2 3 4 5

Presentation Title
DRAFT
Contents
5 Conclusion

Presentation Title
DRAFT
 There are three key drivers governing transformation in the FE sector:
- Reduced Funding
- Policy Change
- More Demanding Learners
 For FE colleges, the practical implications of this transformation is an immediate and fundamental re-
examination of how they deliver services
 A good first step in the process of re-examination should begin by looking at best shared service practices that
are taking place right now both inside and outside the FE sector
Conclusions- The need for a major re-assessment (1/3)
FE colleges must thoroughly consider their current situation in light of
significant upheaval in the sector

Presentation Title
DRAFT The next step is to devise a model that will allow colleges to re-conceive how services are
delivered
- This model must encompass all services colleges provide, which can be grouped into three service areas:
• Classroom Services
• Student Services
• College Services
 This model is animated by five key principles:
- Customer-Focus
- Market-Driven
- Financially Sustainable
- Innovative-Thinking
- Collaborative Thinking
Conclusions- The need for something new (2/3)
To deal effectively with transformation, the FE sector requires an approach
that not only allows it to manage change but to exploit it

Presentation Title
DRAFT
 This model can be delivered by the Shared Value Network
- The Shared Value Network is an agile and flexible system that will allow colleges to realise cost savings and
produce enhanced learner outcomes
- The Shared Value Network allows colleges to access services from a cluster of services from a common
platform that best suits their needs
 The two colleges reviewed demonstrate that the benefits colleges can enjoy through participation in the Shared
Value Network are wide ranging
 The Skills Funding Agency and IM Services already provide a number of services to FE colleges, which make
them the natural vehicle through which the Shared Value Network can be delivered
 There needs to be further exploration and review of the key issues surrounding this delivery model
Conclusions-Delivering the Shared Value Network (3/3)
The Shared Value Network affords the FE sector an excellent opportunity for
dynamic transformation that respects the right of colleges to determine how
that transformation will affect them

Capgemini Presentation_Skills Funding Agency_Stephen Posavad

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