Getting Started

But when I created the accounting system and the planning system, at the back of my mind was to make it such that it helps us understand the business dynamics of SMU, more so than just trying to say this is the money we have, how do we spread it. It must be looked upon from a business perspective, so all the things that I set up was similar to a business model with revenue streams, with cost and what is the bottom line. And how do we balance the budget? Again, not just as one entity, but with all its subcomponents because we have different schools. Different schools have different needs. Different schools have different dynamics. So, again we have to be able to look at things that way. So I, in a sense, set up the system all to enable us to look at it and not just as one university and one pot of money to spread around. So, I guess, that's where I wanted to look at it very differently and so that's where I want to be different.

I created a [cost] centre, responsible for running the services that you are set up for and responsible for managing the financial resources that we are allocating to you to offer those services. That created a bit of apprehension on many because they were never held that way, to be accountable for not just what you are doing, but to manage the resources that I allocate to you. So that was quite a bit of change for many. They were very apprehensive. I guess for the obvious fact that, what if I don't have enough money to do the things that I need to do. I say, No, you are responsible, so you manage.î Of course, you have to justify your needs every year, based on what is expected of you, and we will allocate what we think we can allocate to you. So, that was one part of the journey that we went through. But after a couple of years, people got comfortable, and it worked wonderfully later on because then truly accountability and responsibility are now aligned. 

Different schools have different capabilities in terms of the ability to offer programs that they can use to generate additional income to support the school. From business school, to say social sciences, they are all very different. And if we look at our portfolio of programs today, clearly business school can offer a lot more. And, therefore, they have that ability to use those programs to bring in additional revenue to support the school. But I would say if we look at social science today, that capability is much less compared to business school. That difference will have impact in terms of the financial outcome of each school. Some may end up generating surplus within the school. Some may always be in a perpetual deficit situation and we recognise that. But we cannot say -- let's get rid of the loss leaders because in the way we have structured it, they are all interdependent.