Why Academic Resource Management Matters More Than Ever

Universities across the globe are facing an inflection point. The financial pressures of declining government funding, rising operational costs, and increasingly complex learner demands are forcing institutions to rethink how they manage their academic resources. At the heart of this challenge lies academic resource management, a discipline that integrates financial, operational, and academic data to guide strategic decision-making.

Professor Emeritus William F. Massy, a leading voice in higher education reform, argues that universities can no longer afford to treat academic and financial planning as separate domains. Effective academic resource management becomes not just a budgeting exercise but a cornerstone of institutional strategy. In his words:

“They (ABC models) certainly are strategic. They’re probably the most powerful strategic tool in the toolbox.”

Moving Beyond Traditional Budgeting Models

Historically, resource allocation in universities has been based on incremental budgeting or historical funding patterns. While administratively convenient, these models often fail to reflect the actual costs or value generated by academic programs. As Massy explains in Reengineering the University (2016), these traditional approaches encourage status quo thinking and obscure inefficiencies.

Modern universities are now turning to integrated approaches like activity-based costing (ABC) to gain a more granular understanding of how teaching, research, and support activities consume resources. Platforms such as Pilbara Group’s Pilbara Insights model, for example, allow institutions to map expenditure to activities and link those activities to outcomes, providing a clearer picture of ROI for each program.

This shift allows leaders to ask more strategic questions:

• Which programs deliver the greatest mission impact relative to cost?
• Where are we overspending for limited educational value?
• How can we reallocate staff FTEs to better align with student demand?

A Portfolio Approach to Academic Resource Management

Institutions are complex ecosystems. Focusing solely on individual programs or departments fails to capture the interdependent nature of academic delivery. For example, a low-enrolment unit might appear inefficient on paper but may play a critical service role in high-demand degrees across the faculty.

To address this, leading universities are adopting a portfolio-level approach to academic resource management. This means assessing programs and courses not in isolation but in terms of their contribution to the broader academic mix, taking into account shared teaching, interdisciplinary integration, and infrastructure use.

Visualising Mission and Margin

One of the most powerful frameworks for academic resource management is the Mission-Margin Matrix, developed by Professor Massy. This 2×2 grid helps institutions categorise programs based on their alignment with institutional mission (qualitative value) and their financial performance (quantitative value).

This approach offers four quadrants:

1. Invest: High margin, high mission – priority areas for growth
2. Protect: Low margin, high mission – strategically subsidised areas
3. Grow: High margin, low mission – often professional programs with financial upside
4. Re-evaluate: Low margin, low mission – candidates for redesign or exit

Future-Proofing Through Workforce and Workload Planning

Effective academic resource management also hinges on how institutions plan and deploy their most critical resource: academic staff. Academic workload allocation models (WAMs) must be flexible enough to reflect diverse activities across teaching, research, and engagement, while also aligning staff deployment with strategic needs.

As Massy explains, visibility is power:

“You can’t optimise what you can’t see. Transparent models allow for better negotiation, better trust, and better decisions.”

Conclusion: Academic Resource Management as Strategic Infrastructure

As higher education becomes more competitive, transparent, and outcomes-driven, academic resource management is no longer a back-office function. It is a strategic capability.

Universities that succeed in this new era will be those that:

• Integrate academic and financial planning
• Make data-informed decisions using tools like ABC and mission-margin analysis
• Regularly review portfolio performance
• Invest in workforce planning tied to actual student and research activity

By adopting a systems-thinking approach, institutions can ensure that every dollar spent contributes meaningfully to their educational mission and long-term resilience.

Further Reading:

• Massy, W. F. (2003). Resource Allocation in Higher Education. University of Michigan Press.
• Massy, W. F. (2016). Reengineering the University. Johns Hopkins University Press.
• Massy, W.F. (2020). Resource Management for Colleges & Universities. Johns Hopkins University Press

Share this article with colleagues in academic leadership, finance, and planning roles to spark strategic dialogue on the future of resource management.

🔗 Explore more Pilbara insights:

• PILBARA PODCAST – S01E01 – Academic Resource Management
  
• The Evolution of Activity-Based Costing
• Activity-Based Costing Software Top 4 ‘Must Haves’