Universities and independent research institutions can often be large and complex organizations that need to be flexible and adaptable to continuous change (Navarro & Gallardo, 2003). Indeed universities are required to meet the needs of various stakeholders through providing academic services involving the delivery of education and in the case of research intensive universities, this also includes undertaking research. Furthermore, knowledge exchange activities result in the translation of knowledge and research outcomes into commercial benefits for partners or societal benefits for wider stakeholders (Philbin, 2015). In this context universities have increasingly been viewed as occupying a strategic role through stimulating innovation and economic growth through technology transfer and the resulting commercial exploitation of intellectual property (Hughes & Kitson, 2012).
Universities also face a number of challenges. There is increasing pressure on academic budgets, especially on the funding secured from governmental sources. There is an increasing level of competition in terms of universities competing on multiple levels, e.g. competing for the best students and staff as well as for research funding. There is also a tendency for universities to be engaged in greater levels of performance measurement to underpin effectiveness across research, teaching and knowledge exchange activities (Ter Bogt & Scapens, 2012). But universities are also faced with the opportunities of adopting modern ICT (Information and Communications Technology) to improve the scope and quality of teaching (Selwyn, 2007). Additional educational channels are under development and offered by an increasing number of universities, e.g. through recent developments of MOOCs (Massive Open Online Courses) (Daniel, 2012). Other opportunities could, for example, be associated with responding to major funding calls and setting up multidisciplinary research centers (Philbin, 2011), or establishing new research facilities that bring together academic faculty to focus on a specific industrial requirement or societal need for research, such as healthcare, security or the environment.
In this context, universities need to be able to adapt to emerging opportunities and respond to strategic program opportunities in an efficient and effective manner. In the case of major opportunities, there will be the need to assemble a supporting business case that underpins the opportunity. The business case will need to sit alongside the academic case for financial support and will jointly be reviewed by the funding body, which could be a government agency, industrial company, charitable foundation, philanthropic source or even the university itself. Development of a business plan for a new initiative requires appropriate commercial competencies in order to ensure a compelling and attractive case can be assembled, which can thereby attract the necessary funding. While companies are experienced in such business planning, in the Not-For- Profit (NFP) and academic sectors there has historically been less of a need for such commercial competencies and capabilities. This is changing, however, and increasingly universities and NFP research organisations are adopting management practices derived from the corporate world (Nickson, 2014). Nevertheless, in our experience we have found there can be certain challenges encountered, especially for strategic academic initiatives. These challenges are summarized in Table 1.
Consequently, this paper will describe an approach developed at Imperial College London in the United Kingdom to help support the development of strategic academic initiatives at universities through use of a structured business planning methodology. The framework is introduced and an illustrative case study is described in order to provide readers with insights into the benefits of adopting a structured business planning methodology at higher education institutions. Such a framework can be deployed to support the development of strategic program opportunities such as new research centers, major infrastructure investment as well as the creation of new academic capabilities to support research and education delivery.
The Need for Business Planning
The process of business planning needs to capture the customer need in a succinct manner and then derive a viable solution and supporting approach in order for the need to be met. Addressing this need involves the deployment of the necessary resources along with management oversight and the costs for such activities need to be ascertained. There is also a need to identify the risks associated with such a business plan and other commercial factors such as the availability of investment capital and the level of competition from other suppliers in the sector. The use of structured methodologies, such as program management, offers the ability to provide a systematic approach to support the business planning process. Indeed ensuring there is a robust process to support planning can help improve the success of strategic initiatives. Process considerations include the features of the planning stage, human-dimensions of decision-making, managerial and technical skills available to the team—both the internal and external context for the planning as well as the initial and final outcome measures of performance (Bryson & Bromiley, 1993).
In terms of developing strategic initiatives, there needs to be alignment with the relevant organisational strategy, which could be at the corporate, business or functional level (Grünig & Kühn, 2015). This alignment is required to enable the pursuit of new strategic opportunities and to help organizations receive the necessary funding. The development and maintenance of key infrastructure and facilities can be of strategic importance to academic institutions and initiatives that are pursued in order to maintain enterprise-wide research and associated experimental facilities can benefit from the support of standardized and transparent processes (Grieb, Horon, Wong, Durkin & Kunkel, 2014).
The capabilities required for universities to initiate and deliver strategic initiatives, such as new research centers or subsidiary companies, will be associated with the processes adopted as well as the structures and resources that are available. Moreover, business planning can support the decision-making process required for developing such strategic initiatives but while adopting a structured approach to business planning offers clear benefits it should be balanced against the need to avoid becoming overly rigid or bureaucratic (Oakes, Townley, & Cooper, 1998). Indeed business planning has historically been a recognized approach to support new venture creation (Delmar & Shane, 2003), which is highly dependent on being able to articulate the commercial value to be delivered by the venture. Developing a strategic program at a university needs to capture and articulate the academic (or technical/scientific) and the commercial case, so it is logical to draw on best practice from the corporate environment but crucially with refinement to the university/NFP context.
Recognizing the best practice and current approaches to program management as well as business planning for strategic initiatives, we identified the Managing Successful Programs™ (MSP) framework (Office of Government Commerce, 2007) as a suitable methodology to support the development and management of strategic initiatives at Imperial College London. This was supported by consultations with members of staff at Imperial College on the need for
an efficient process for the management of major initiatives and also through capturing views on the matter from a range of senior stakeholders at Imperial College. Consequently, we sought to implement the MSP methodology through adapting the standard process model to Imperial College’s requirements for strategic academic initiatives and the process was also streamlined to be aligned with Imperial’s administrative systems and thereby avoid excessive bureaucracy.
MSP is a management standard that has been developed over the last several years by the United Kingdom’s Office of Government Commerce (OGC). This management approach is not derived from theoretical study but has been established through building on the knowledge and experience of practitioners and the approach therefore represents best management practice. The management standard relates a program to the implementation of a set of related projects to deliver outcomes and benefits associated with the organisation’s strategic objectives. Moreover, a program is focused on aligning corporate strategy with a delivery mechanism for change in the context of existing business operations, where according to the MSP framework a program can either be vision-led, emergent or compliance. Table 2 provides the definitions for the three main types of programs together with a series of illustrative business planning applications for universities according to the three types.
Table 2 highlights that there are a range of business planning applications in higher education institutions that can be related to the program management approach offered by MSP. Adoption of a recognized and structured methodology, such as MSP, offers a university a number of benefits. These include the efficient use of administration resources to support research programs, effective planning according to recognized best practice for management initiatives, potential to be economical and offering value for money through avoiding duplication of management effort as well as capturing key data and information to support the ethical administration of research programs.
Business Planning Methodology for Strategic Academic Programs
The management framework to support business planning for strategic academic programs has been developed through applying the MSP methodology to the academic context and is provided in Figure 1. The framework includes the business planning phase (pre-award administration) and the delivery phase (post-award administration), which together comprise the different stages of the program lifecycle. The management framework also includes associated governance themes. The ten governance themes describe the different elements required to support the overall process, such as leadership and academic vision, organizational structure, faculty engagement as well as research support and coordination. These governance themes provide the supporting mechanisms to ensure programs deliver the required outcomes and remain within corporate visibility and control.
In terms of a lifecycle perspective of strategic academic programs, ideas for new programs are initially created (initial idea stage), whereupon they are conceptually developed by the
relevant team (program concept stage). This leads to establishment of the business case for the program (business case stage), followed by program development where the program proposal and business case are refined in more detail (program definition stage). These four stages represent the wider business planning process as part of the planning phase (pre-award administration) and are summarized in Figure 2.
The business planning phase (pre-award administration) includes the primary outputs for each stage as well as the corresponding stage gate reviews. The process recognizes that there may be a need for a previous stage to be repeated subject to the outcome of the relevant stage gate review, e.g. where the funding body’s requirements have changed, or the stage output may be viewed as
not being acceptable or not of the required quality standard. Once the necessary funding has been secured, program delivery commences and this involves delivery of the capability alongside realization of the program’s academic benefits (program delivery stage). Upon completion of all program activities the program is formally closed (close program stage).
Table 3 provides supporting details on the key activities to be carried out for all six stages (both pre- and post-award administration), although it is recognized that business planning refers only to the pre-award administration stage. These key activities are described in order to provide practitioners with greater insight into how the business planning methodology can be adopted in their own organisation. Application to a given organisation should however take account of the local environment as well as management needs and hence the specific activities would need to be adapted as required.
Case Study Investigation
The case study investigation involved the business planning for a medical imaging facility at Imperial College London in the United Kingdom. The case study is based on the experience of the authors who were directly involved with the program through being part of Imperial’s Enterprise Division. The division is responsible for providing business development, program management, commercial planning and support to faculty members across Imperial College and this includes the development of industry funded research projects, European Union funded consortium research projects as well as strategic academic programs such as new research centers and institutes. The following case study is provided for illustrative purposes. The findings are reported through a process of reflective inquiry (Schön, 1983) by the authors and where appropriate, representative data and information is included to provide further context. The case study highlights the practitioner benefits of utilizing the management framework to support the business planning for the development of strategic academic programs that are pursued by a university or NFP research organization.
Need for Medical Imaging
The medical research imaging facility includes PET-CT (Positron Emission Tomography– Computed Tomography) and MRI (Magnetic Resonance Imaging) scanning equipment and the initiative related to a requirement to upgrade the facility so that academic research could be carried out on the imaging equipment. PET-CT is a medical imaging technique that combines through a single system a PET (Positron Emission Tomography) scanner and an X-ray CT (Computed Tomography) scanner. This allows images to be taken sequentially from both scanners to build up a co-registered image. The PET imaging involves the patient receiving a small dose of a radioactive tracer, e.g. fluorodeoxyglucose or FDG protocol. The scans provide an image of how the tracer is processed by the body, where the PET-CT technique is based on the use of X-rays to generate images of the body. Conversely, MRI is an imaging technique that produces detailed anatomical images but without the need for radiotracers. An MRI scanner uses magnetic fields and radio waves to form three-dimensional images of the body. For further reference, Suetens 2009) provides details on the fundamentals of medical imaging. Both MRI and CT scanning are increasingly used in the provision of modern healthcare services and this is illustrated in Figure 3, which highlights the growth in numbers of clinical imaging tests in England from 1995-96 to 2013-14. This data from National Health Service (NHS) England (2014) identifies that the rate of average annual growth over last 10 years for CT and MRI has been 10.1% and 12.1% respectively.
Development of Imaging Facility
The program involved refurbishment of the facility so that it could be used to support the research needs of academic faculty members at the university. The initial idea was identified by senior staff at the university and this was communicated to Enterprise Division so that the business planning work could be initiated. The preliminary assessment of the program opportunity was carried out and this highlighted the academic needs for the program as well as the commercial potential. The program then transferred to the program concept stage, whereupon more detailed planning was carried out on the scope of the program as well as the academic benefits. At this stage, a program steering group was assembled. The steering group was a multidisciplinary team representing different functional areas, such as senior management, finance, facilities management, health and safety as well as general administration.
During the concept stage there was also allocation of a limited amount of internal funds to support an engineering feasibility study that was required in order to ascertain the overall costs of the main refurbishment and upgrade works. At the first meeting of the steering group, there was discussion on the work packages of the programme, namely the engineering feasibility study and the business case development. The feasibility study was required to determine the total programme costs for upgrading the facility and the business case was needed in order to derive the likely revenues to be generated by the facility through providing an imaging service to members of the academic faculty. After this initial meeting of the steering group, the program transferred to the business case stage.
Knowledge Dimensions of the Case
The business case was dependent on developing an improved understanding on how the clinical scanning facility would complement other facilities operated by the university, thereby allowing an overall view to be established for the entire scanning services offered across the university. Knowledge was generated on the clinical research areas to be investigated through use of the enhanced medical scanning facility. This knowledge was obtained from a series of academic faculty consultations with leading medical research practitioners across the university’s various hospital campuses. Data and information was also acquired that related to the operation of the medical scanning equipment including operating conditions, throughput levels and maintenance regimes. Plus, information relating to sponsor needs was obtained, including potential funding opportunities with research councils and charitable foundations. Table 4 provides a summary of the medical research areas that would be accessible through use of the upgraded medical imaging facility, which were identified during the consultation meetings with faculty members.
Program Lifecycle Management
Once the business case had been assembled for the enhanced facility and as part of the next stage in the lifecycle, the program definition stage was undertaken. This involved more detailed financial modelling on the expected level of revenues for the facility that was related to the medical research areas identified in the business case stage. Revenue modelling also included a number of financial scenarios, including the so called best-case scenario (high level of revenues), worst-case scenario (low level of revenues) and base-case scenario (medium level of revenues). This form of financial scenario planning allowed probability factors to be applied to the various sources of funding so that a reasonable estimate could eventually be made through the base-case scenario that took account of the relative levels of risk (and corresponding probability) for each source of funding.
For example, in the scenario where a research program has already been awarded by a medical research charitable foundation, this was viewed as a low risk source of funding corresponding to a high probability that there would be funding made available for imaging research on the upgraded facility. Whereas, in the case where a research proposal was to be submitted to a pharmaceutical company that had yet to make a decision on programme funding, this was viewed as a high risk source of funding and a corresponding lower probability that there would be funding made available for imaging research on the upgraded facility. Programme definition allowed the full business case to be prepared for the programme, including academic and technical aspects as well as commercial and business considerations. The funding proposal was submitted to the university’s management board and after careful consideration the program’s capital expenditure (CAPEX) was approved.
Program delivery took place after the allocation of program funds and this involved the upgrade of the facility so that the required medical research could be undertaken using the imaging equipment. This stage proceeded smoothly and included the various engineering works, such as upgrades to the M&E (mechanical and electrical) services as well as installation of additional pieces of equipment. The facilities were tested for effective operations and subsequently opened for use as a medical research imaging facility at the university. Programme closure involved the facility being handed over from the engineering team to the academic department so that medical research studies and imaging activities could commence. Finally, program finances were reconciled with all outstanding payments met and other program administration activities completed allowing formal closure of the facilities development program.
Managerial Insights from Case Study
A number of managerial or practitioner-related insights can be drawn from the case study that involved implementation of the program management framework and these are summarized in Table 5. The insights are described in terms of the people, process as well as technology and knowledge dimensions.
Universities and NFP research organisations face a number of challenges that include responding to increased pressure on funding and budgets as well as increasing levels of competition for funding and the recruitment of leading faculty. These challenges are, however, accompanied by various opportunities such as those presented by adopting different forms of ICT in regard to educational delivery as well as opportunities related to establishing major new research initiatives. Moreover, the ability for such organisations to be able to adapt to changing circumstances and drive forward strategic academic programs is likely to be a major indicator of success in the future.
As distinct from smaller scale research projects, strategic academic programs are complex initiatives that require coordinated development. This complexity can be associated with a range of factors, such as the need for complicated legal arrangements, company formation, an international dimension, multi-department involvement, or a high-level partnership leading to significant funding. For example, this could include a high-value research program enabling creation of a new center or institute, or alternatively there could be development of the business case to support a new joint venture ( JV) company, or an overseas campus initiative. In addition to the potential higher academic and commercial benefits, these programmes often carry an enhanced level of risk, for example, involving financial risk in the delivery period, or the possibility for the university’s brand to be tarnished. The management framework described in this paper was established in order to support the business planning and development of such strategic academic programs and to help manage the significant complexity that often arises with such programs.
The program management framework was developed through adapting the MSP methodology to the academic setting in order to derive a structured approach that is based on best management practice. This program lifecycle approach is based on a stage-gate process that involves the business planning phase (including the initial idea, program concept, business case and program definition stages) and the delivery phase (including the program delivery and program closure stages). This framework provides a robust approach to support the business planning required for strategic academic programs, including the so called vision-led, emergent and compliance type programs.
The case study investigation reported in this paper highlights the utility of the program management framework to support the business-planning phase for an enhanced medical research facility. The imaging facility includes PET-CT and MRI imaging equipment that can be used to support various medical research areas, such as neuroscience, pharmacology and oncology. Implementation of the program management framework will be highly dependent on the people, process as well as technology and knowledge dimensions of a given a strategic academic program. A supporting culture that promotes sharing of knowledge across the program is also an important factor to the success of such programs. Although the methodology provided in this paper provides an overall route map to help practitioners design and deliver major new academic programs, the individual activities carried are contingent on the specific organisational context and the needs for a particular program. Nevertheless, the program management framework can be adapted to the needs of other universities and NFP research organizations as needed.
Future work is suggested on applying the program management framework for business planning to other strategic academic programs, such as the creation of multidisciplinary research centers and institutes or the creation of a new spin-out company arising from the commercial exploitation of intellectual property. Such applications would further highlight the practical benefits of adopting a structured business planning approach to the development of strategic academic programs that support the growth and financial sustainability of university and NFP research organizations.
Simon P Philbin, PhD MBA
Director of Programme Management Enterprise Division, Imperial College London
South Kensington, London SW7 2AZ, United Kingdom
Charles A Mallo, MEng
Director of Academic and Technology Ventures Enterprise Division, Imperial College London
South Kensington, London SW7 2AZ, United Kingdom
Correspondence concerning this article should be addressed to Simon P Philbin, PhD MBA, Director of Programme Management, Enterprise Division, Imperial College London, South Kensington, London SW7 2AZ, United Kingdom, Email: firstname.lastname@example.org
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Strategic Academic Programmes, Business Planning, Medical Imaging Facility