We're dooomed (part 2)

I'm in St Andrews at the moment for the UCISA CISG conference aptly named Tips to Avoid the Bunker as we're surrounded by golf courses - and the sea of course. The first session was entitled Hard Hats Time and was given by Derek Watson, Quaestor and Factor of the University of St. Andrews. Interesting title - thought it meant VC, but it's a sort of Finance/Estates Director role, and the only one in the country.

The talk focussed on the current economic climate, how we got here, what it means for Universities, and what we can do about it. Fascinating talk, and his explanation of how the world changed in 2008 and the economy came close to collapse was illustrated with some scary numbers. So far the world economy has lost $2.8 trillion (a huge number - 11 noughts!), begs the question of how the hell did that happen, and did we have it in the first place! It's equivalent to the market value of Oracle and Microsoft added together and multiplied by 8 - that's a lot of money to take out of the economy.

In talking about how this will affect Universities it is useful to reflect on what they are. Universities were established to promote teaching and learning and research, and although they are in receipt of significant public funds they are are not public bodies but independent charities. The financial pressures being felt by us in the summer of 2008 (or those heady days as as they were referred to) included inflation, a looming pay settlement, rising utility costs, the rising cost of technology and other initiatives, student demands, and public sector funding not keeping up with costs.

Now, we are facing pressures on earnings, no investment funding, endowment funds which have lost value and rising pension deficits. That's as well as all the pressures we were facing a year ago - they haven't gone away. So, to quote Private Frazier, "we're doooomed". Well, maybe not, but we have to achieve financial sustainability - and for the non accountants like me - put simply that means earning more then you spend and creating a surplus to pay for new buildings, equipment etc.

So - how do we get out of this. Well the message I picked up can be summarized in one word - change. If you do what you've always done, you get what you've always had. The world has changed, the rules have changed and we now have to change. We need imagination and the courage to make tough decisions about what we can stop doing and what we can do differently. IT can lead to business transformation, and we can use it to help the rest of the institution change.

Overall, the world has changed, but the old problems are still there. This is illustrated beautifully by a quote from 1663, where the Scottish Universities complained to the government that their staff were not being paid enough, the buildings were poorly maintained, and if it wasn't sorted out, society would suffer. Sound familiar?

And why part 2 in the title of this post? This is why. Sound familiar?