IRI Paradigm and the LEAN Concept

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Let us continue our analyses on the FTE and Spending Analyses which was posted before.  Supposed, Campus D’s spending is the same with the revenue it has generated.  Applying the IRI paradigm enables one to look beyond the numbers.  Analyst applying the old IR concept usually will stop and conclude that College A, at location D did a good job by balancing its revenue and expenses.  However, if one digs deep-down, then the story could be VERY different.  After further analyses, one may find that the actual spending varies among different programs.  To illustrate this important IRI mindset, let us expand the example that we have analyzed before and add other information at the program level as shown in Table 2 below.

Table 2

There are three programs that have not been managed appropriately and these programs are A-3, A-5 and A-8.  The management has to be able to use such a simple approach to identify which program that needs to be streamed line.  This table is very important and can be used as an unbiased yardstick during the program review.  After this step was done, then one can move on to identify the causes of inefficiency in the second round of the analyses.  The second step consists of analyzing in detail what activities or processes that are redundant and can be eliminated without disrupting services provided to the students.  Some people call step two as the LEAN process.  The concept is borrowed from manufacturing industry and TQM (Total Quality Control) field.  None of LEAN or ABC costing that we have previously discussed were ever known in the past (old IR).  Again, after we introduced the NEW IR paradigms or Institutional Research Intelligence (IRI), US colleges start to see the need to move away from the reporting (old IR) and to apply the new management tools that are in line with IRI principles.  That being said, the transition from the old IR to IRI can only be done by those institutions that can see the future and not the past supported by a big data expert.

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