How do you allocate the costs of central global education services?

Bill Hor
Bill Hor Founding Member | Scholar ✭✭
edited August 2020 in Services Delivery & Operations

For Education groups that provide central global services (Virtual Labs, Collaboration Tools, etc) how do you allocate those costs to your P&L country groups? For example if you have a central labs for the lab portion of VILT classes how are they paid for? If an allocation model what are the factors that are used in the model?

Answers

  • Jerome Peck
    Jerome Peck Member, TSIA Administrator | admin

    Good question, Bill. @Haytham Nasr, @Alyssa Ortiz, and @Scott Thomas this looks up your alley. Any thoughts?

  • Scott Thomas
    Scott Thomas Founding Member | Scholar ✭✭

    @Bill Hor this has evolved for us over the last couple of years. I think either approach will work it just depends on your scale and what i have found the relationship with accounting and how they would like to manage it has been the driver for me.

    One Approach - we just divided the costs of the technology to support delivery (labs and online tools) based on historical usage patterns across our 4 regional P&Ls. We didn't go down to the country level; but I'm assuming. you could use the same principal as needed.

    Second Approach - we look at actual consumption metrics across all tools at the end of each quarter and then "cross charge" to the appropriate regional P&L for usage.

    Hope this helps.

  • Bill Hor
    Bill Hor Founding Member | Scholar ✭✭

    Hi Scott - Thanks for the reply. We have looked at both fixed based upon historical and consumption based upon actual usage. Our current thinking is a combined model with the fixed set based upon historical use or revenue targets plus a portion being actual usage.

    Thanks,

    Bill

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