What options are open to schools when it comes to financial management solutions?

The Competition and Markets Authority (CMA) is investigating whether ESS SIMS is abusing a dominant position to push schools into accepting a new 3-year contract.  What’s interesting here is that, as part of its investigation, the CMA has said they will also consider the pricing of some ESS product packages – specifically, it will look at how SIMS is being sold alongside FMS.

The press release from the CMA says:

“As part of its investigation, the CMA will also consider the pricing of some ESS product packages – specifically, it will look at how ESS’s management information system product is being sold alongside its financial management software. This could encourage customers to buy both products and deter customers moving away from ESS.

The CMA is concerned that, by adopting such a pricing strategy, market players that only offer one of these services may be unable to compete, potentially leading to an uncompetitive market in future.”

How ARE schools handling what they do in terms of a finance package when they switch to a new MIS?

Product functionality and data extraction aside, one of the biggest challenges schools always used to face around FMS was how costly it was to buy it directly from ESS (then Capita) if you want to buy it as a standalone product. e.g. not bundled with the MIS via an LA-wide deal.

For many, the new total annual cost of an MIS + finance solution would simply be driven too high to justify the change so they stayed with their existing systems.

But as schools choose to move to new MIS solutions, what are they choosing as their finance system?

Schools are choosing to move MIS more than they ever have before. There are plenty of options out there ranging from client-based to cloud, multi-phase to age-specific, and outcome-focused to all-in-one solutions.

The reasons schools choose to move in the first place are varied. Many convert to academies and sometimes they join a trust where a different MIS is in use so they switch as part of the joining process. Other times, they’ll use their change of status to academy as an opportunity to look at the MIS options available to them now that they are no longer under LA control.

Maintained schools are switching MIS too. For many, the traditional model of them being able to buy into an LA-purchased and supported MIS is disappearing as councils no longer retain budget or mandate solutions. For some, they never participated in the LA arrangement, choosing to do their own thing and looking at the market on a regular basis anyway.

But what it is that schools look for in a new MIS? What’s most important to them?

A recent survey¹ of 2,146 schools across England asked them to prioritise what they felt was the most important factor in terms of price, support, functionality, integration, partnership and reputation when looking for a new supplier. The results are outlined below:

Functionality was identified as the most important factor at just over 57%, with price coming second and integration a close third, within a couple of percentage of each other.

It makes sense that functionality would come out as the most important factor amongst schools. Ultimately there are certain functions an MIS has to perform to be fit for purpose, such as census which they all do, but there are a huge amount of processes and insights provided by your MIS which schools rely on every day.

The fact that the amount of respondents who said that price was the most important factor to them is fairly similar to the number of respondents who said that integration with other products was the most important factor to them tells an interesting story.

Without a doubt, schools are looking for best value when it comes to MIS, but this doesn’t necessarily mean cheapest. Equally, there is a drive to consolidate systems for sure, but schools don’t want this to at the expense of losing something else they might be using which is incredibly valuable to them; they want to be able to use the best of what’s available to them on the market so integration across solutions is important to them.

(It’s interesting as a similar survey was conducted amongst MAT leaders and, in that survey, functionality scored a much higher percentage; they seemed to be even less sensitive to price and gave more weight to how the product worked – presumably as there are specific MIS needs in trusts. We’ll cover this in another blog).

So, given that the majority of schools cite functionality as the main thing they’re looking for in a new MIS, the next question is: how happy are they with their existing MIS and how likely are they to move?

The survey asked respondents to rate how satisfied they were with their MIS, on a scale of 1-10 with 1 being extremely dissatisfied and 10 being extremely satisfied. The results are below, and the vast majority of suppliers got an average score of 6 or above:

It also asked how likely respondents are to move in the next 12 months, as outlined in the pie chart below:

Around 64% in total said they were either ‘unlikely’ or ‘very unlikely’ to move MIS in the next 12 months, so it seems almost two-thirds of schools are either happy with what they’ve got, or don’t see moving MIS as a priority in the next 12 months.

That said, 311 respondents, which is just over 14%, said they were either ‘likely’ or ‘very likely’ to move in the next 12 months – if this is a reflection across the whole market then we can expect lots of movement from one MIS to another in the next year or so.

Ultimately, if schools are citing functionality as the main thing they look for in a new MIS, how confident are MIS suppliers that their functionality is truly meeting the needs of schools? Aside from the basics, what makes one stand apart from the other?  We’ll be exploring this, amongst other things, in more detail in subsequent posts and would love to hear your views; what do you think users are you looking for in their MIS?

¹The data was collected by The Key from a survey that went out to all primary, secondary, special schools and pupil referral units in England, by email. It was not sent to independent schools. The survey was completed by Headteachers, Deputy and Assistant Heads, and School Business Managers / Leaders between 29 March and 27 April 2021.

As part of the survey, respondents were asked which MIS they use. The results are outlined below:

All too often I hear companies say that the thing they absolutely must to do overcome competition is beat them on price.  The logic being that if we’re the cheapest then we’re the ones the customer will choose, right?

Generally speaking, and unless everyone you are competing against is offering a 100% identical product to you, this simply isn’t the case.  People are looking for value as much as they are a good price.  In the public sector most large deals go through a formal procurement process but, even then, price will only make up a certain percentage of the score.   Customers tend to use the MEAT criteria (Most Economically Advantageous Tender) which also takes into account quality.

So instead of making price the thing you must beat them on and the focus of your efforts, why not try highlighting some of the other things that stand you apart instead.  For example:

• Are you greener or more ethical? Is your product/service locally based or locally made.  Equally, is your service UK-wide or international?
• Is your product of a higher quality, built to last, easier to use, safer to use or approved by a respected organisation?
• Are your staff experts in their field, do they come from industry, are they a large, happy and stable team offering fabulous service, do you offer longer more flexible opening hours and online help?

At the end of the day cheapest rarely means best.  Aim to price your product or service at a price-point that truly represents what you offer and then focus your attention on delivering all the added value your customers will love.