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

BillHor

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?

Jerome Peck

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

Scott Thomas

@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.

BillHor

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