Nelson Mandela Metropolitan University (NMMU) will implement a SAS Activity Based Management solution to help it with understanding the costs of its services, developing a pricing model and facilitating the budgeting process.
Business Performance Solutions (BPS), a Value-Added Reseller of SAS solutions in South Africa, has been selected as a strategic partner and will support the implementation of the solution in conjunction with a team from NMMU.
NMMU is spread across seven campuses in Port Elizabeth and George, with more than 20 000 students and approximately 1 500 staff members. The organisation faces a number of challenges as a result of its origins in the merger of three different institutions, namely PE Technikon, the University of Port Elizabeth and the Port Elizabeth campus of Vista University.
"We need a greater understanding of our costs and cost behaviour to support the organisation¹s future development,² says Nonkululeko Tsita, Deputy Director: Costing, Management Accounting.
"The sheer diversity of modules and courses spread across different campuses adds cost and complexity to the organisation. We need to model costs and revenues in a way that supports strategic decision-making while at the same time providing the underlying, low-level detail to assist operational improvement initiatives," she adds.
NMMU's Executive Director: Finance, Marius Scheepers, strongly believes that for a tertiary institution to remain financially viable against a background of reduction in government subsidies, ever-increasing overheads, financially disadvantaged students¹ ability to keep up with fee increases in excess of inflation and inadequate bursary and loan funding, a need to cost your products and services is absolutely vital and non-negotiable.
BPS secured the engagement over a number of its competitors. According to Nick Grenfell, MD of BPS, their success was due to their specialist expertise, skilled and experienced consultants and numerous reference sites in South Africa. They use the world-leading SAS Activity Based Management solution to deliver the meaningful financial intelligence required to support business decision-making.
According to Grenfell, the major benefits are a greatly enhanced understanding of:
* The true costs of modules, courses, research and other programmes delivered to both domestic and international students through different campuses;
* The budgeting process and the relationship between costs and service delivery;
* Internal benchmarking through deriving performance levels and best practice standards; and
* Activities and business processes that really create value in the business, as well as those that destroy value.
"Many organisations in South Africa are now recognising the need for quality, detailed business modelling and financial intelligence to support increasingly complex business decisions," Grenfell adds.