Internal Revenue Generation and Utilization by Thanikachalam Vedhathiri

INTERNAL REVENUE GENERATION AND UTILIZATION

Dr. V. Thanikachalam

What is Internal Revenue (IR)? ď Ź

Revenue generated by the faculty / staff using their expertise, equipment, labs/ workshop resources, space and infrastructure through consultancy services to the industry, government, and to the society at large.

Why do you need IRG?  • • •

A proof for outstanding super leadership Integrity Good Judgment on the expertise High Competence and creating an impact Far reaching vision and mission Participative behavior Increasing faculty morale and motivation Commitment for excellence 3

Fulfilling Institute‘s Obligations to Stakeholders Technology development  Fairness  Accountability to society  Respect for trust  Responsibility for creating outstanding performance  Integrity  Human resources  Governance 

Values Creation of Centers of Excellence  Delegation of decision making authority with respect to projects to the outstanding key faculty  Strengthening the performance of the departments/ units/ centers  Rewarding the outstanding behavior of the faculty  Reinforcing the Industry-InstitutePartnership 

Why should we generate Internal Revenue (IR)?

Institutional needs to generate Internal Revenue: 

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Grants-in-aids from the state / central governments are not sufficient for the growth of the institutes in emerging areas There is an upper limit on the fixing the tuition fees to be paid by the students. There is a limit on the fixing the special fees. The expenditure to develop the infrastructure and maintain the equipment is to be further met from the Internal Revenue generated 7

What are the societal needs of the institute services?  

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To get benefits of the technical services from the institutes. To economize the cost of similar services which are available from the profit making organizations. To improve performance of industries using the consultancy services that are available from the institutes. To jointly develop intellectual properties To reduce the creation of additional organizations To optimize the resources and expenditure.

How could you plan for the generation of Internal Revenue?

Best practice Providing information publicly  Involving faculty in decision making  Listening to feedback and complaints  Evaluating faculty attitudes and behaviors 

Plans for generation of Internal Revenue By conducting research and development projects which are sponsored by the government, industries, and international development and funding agencies.  By conducting sponsored training programs for the working professionals.  By improving the engineers’ competencies in managing the changes in the manufacturing process.  In assisting them to improve their performance in reducing the cost of production, improving the quality of products and gaining the market share. 

What are the problems in undertaking such programs and projects?

Some of the existing problems in the Institutes: 

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Lack of administrative policies and norms for faculty and staff commitment towards Internal Revenue generation. Absence of consensus on the vision and mission of technical institutions by the Educational Administrators. Lack of targets for generating the Internal Revenue. Absence of integrated plans for Internal Revenue and human resources required. Licensing the projects to outside commercial agencies. Not circulating the external enquiries to the faculty. 13

What are the technical difficulties in planning appropriate industry specific projects?

Planning industry specific projects Do you have competent faculty?  Have you conducted research studies in the current industrial problems ?  Have you conducted development training and programs for the faculty ?  Have you established centers for excellence?  Have you to established Industry-Institute Partnership Center 

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HOW DO YOU MAINTAIN THE TOTAL QUALITY IN INDUSTRY SPECIFIC PROJECTS?

Some of the existing technical difficulties       

Lack of technical expertise in their field of specialization. Insufficient number of faculty / staff. Lack of expertise for preparing the project bid document. Lack of administrative approval for getting the clearance from the CEO or Board of Governors. Lack of norms for permitting the Institute to undertake the projects by the Government. Long delay in getting approval from the concerned ministry. Lack of policy in permitting the Institute in bidding the externally funded project.

Best Practice To obtain clarity about what needs to happen to achieve and sustain the changes or outcomes that want to be seen  Mapping the outcome pathways to success  Identify who can influence these outcomes positively  Mapping to ecosystem  Set framework for identifying impact 

Getting an expert view on potential for impact Are we addressing critical opportunities and the needs in the state/ nation?  Have we devised appropriate strategies for using these opportunities and meeting these needs?  Have we effectively implemented our strategies?  What should we consider doing differently in the future? 

TQM IN INDUSTRY SPECIFIC PROJECTS       

Industrial Skill Standards Upgrading the Faculty Staff Competencies Instructional Design to Inculcate Competencies Formative Evaluation Implementation Periodical Monitoring and Evaluation Continuous Learning Process Improvement

Excellence model Offers a self-assessment framework for measuring the strengths and areas for improvement of an institution across all activities. ď Ź Excellence model focuses on what an institution does, or could do, to provide an excellent service or product to its clients, stakeholders. ď Ź

Outcome mapping Methodology that can be used to create planning, monitoring, and evaluation mechanisms enabling institutions to document, learn from, and report on their achievements.  Designed to assist in understanding an institution’s results  Recognize the contributions by faculty members in achieving sustainable large scale improvements. 

What are the problems in sharing the Internal Revenue generated?

Some of the problems in sharing IRG     

Absence of norms for sharing the gains in the Institute. Absence of norms fixing the remunerations / fees for the external resource persons. Absence of guidelines to invest the revenue generated in the Separate Account. Absence of guidelines to invest the revenue generated in the industrial / government securities. Absence of expertise in the investment in shares, debentures, bonds and government securities. 24

Is there any unethical problem in utilizing the Internal Revenue generated?

Some unethical problems in utilizing the Internal Revenue generated     

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Wide spread corruption in many institutes. Not sharing the gains with the networked institutes who contributed to the success Not paying the remuneration to the faculty who worked in the project. CEO takes “lion’s share” of the gain. Including non-performing external members in the project team and granting disproportionate share to them. False bills and siphoning the project grants.

What are other the pre-project difficulties in getting the external projects?

Some of the pre-project difficulties 

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Paucity of funds to take up preliminary activities like getting the bid documents, bid preparation, attending negotiation meeting, getting bank guarantee for the project funds received. Insufficient infrastructure to meet the project work. Absence of project specific staff. Lack of trained faculty and staff for the preparation of technical and financial proposal. 28

What are the factors that contribute to the success of the IRG Projects?

Factors that contribute to the success of the IRG Projects 

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Clear understanding of Terms of References (TOR) of the consultancy projects and testing services. Development of appropriate technical proposal based on the terms and references of the project. Utilization key resource person’s expertise. Unambiguous M.O.Us. with networked institutes / technical experts / organizations. Commitment by the networked partners.

How do you facilitate success in completing the IRG projects?

Facilitating success in completing the IRG projects:     

Efficient strategies with economical costing of the project. Cooperative working teams. Commitment to quality at every stage. Continuous monitoring on the progress made. Delegation to the project leader. 32

How do you save your efforts in undertaking projects?

Saving efforts in undertaking projects:   

Work within the Terms of Reference. Innovative approaches to solve the problems faced during execution. Cost control through value analysis.

What are the follow up works in the externally funded projects?

Possible follow up works:     

Replacement of course materials. Up-gradation of course materials. Maintenance of models. Training to the staff. Any other specific project related activity.

What would be the cost of the follow up work? ď Ź ď Ź

It is NOT FREE. It is to be based on current market cost for the materials, travel cost, fees to the personnel.

Is there any guarantee period? ď Ź

Guaranty Period    

It depends on the project. It would be as per the terms of reference. It may be assuring the quality and maintenance of the equipment Attending to breakdowns

What are other follow up works after the completion of the project?

Other follow up works     

Settlement of accounts after completion of the project. Release of bank guaranty. Payment of income tax, if the income from the project is NOT exempted. If the income is exempted, getting refund of the tax paid through filing tax returns. Creation of funds for follow up. 41

What are the Enabling Factors for Generating IRG? ď Ź

Enabling factors for generating the Internal Revenue      

Clear policy on the need, target, and process of generating Internal Revenue. Timely approval by the CEO and the Governing Council / Board of Governors. Creation of internal climate and supportive administrative environment. Empowering the project team. Delegating authority to the project leader. Recognition of the contribution by the team.

Strategies to overcome shortages in project focused resource persons 

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Networking with experts of government departments, national / state research laboratories, experts from higher education/universities. Formation of consortium. Contribution to the technical proposal. Contribution to the financial proposal. 44

Impact of no interaction with industries on the economy       

Under utilization of resources and faculty expertise. Inability to use synergy. Limited contribution to human capital development. Limited contribution to knowledge development. Less impact on economy and GDP. Retardation in industrial productivity. Increase in industrial sickness.

Impact of no interaction with industries on the institutes       

Increase in gap between the faculty and the industry. Faculty burn out. Lack of knowledge on current industrial trends. Lack of research projects to improve the products / processes. Lack of industry specific curriculum in engineering and technology. Lack of optimum utilization of equipment and resources. Obsolete instructional practices. 46

Impact of no interaction with the industry on students       

Shortage of exposure to current industries. Shortage of skills and competencies. De-motivated students. Increase in underemployment. Increase in frustration. Lack of the job training. Lack of real life experience.

Impact of no interaction with industries on the modernization and institutional development          

Institutional development is very much constrained. Duplication of resources at national cost. Under utilization of resources and infrastructure. Added financial burden on the government for modernization of laboratories / workshops. General content driven curriculum. Lack of innovation in the project work, and laboratory work of the students Adding burden to industry to train the new recruits. Increase in the cost of production. Less return on investment. Less contribution to the industrial innovation.

What are the far reaching advantages in generating internal revenue by the institutions?          

Obtaining industry sponsored research and development projects / programmes. Exposed to the current industrial problems. Developing appropriate programmes to meet the industrial challenges. Becoming self-supporting departments. Modernizing the departments, laboratories, and workshops. Generation of adequate funds for assistantships to the students. Developing close link with industry, government and community. Reaching the state of excellence. Patenting the innovative products. 49 Generation of funds for further growth.

Sustenance of Institutional Development 

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Sustenance of institutional development through road map to meet the challenges of knowledge development. Retention of qualified, creative and talented faculty. Utilizing the opportunities for up-grading current and future technologies. Contribution to human capital development.

Ultimate Goal       

Develop innovative projects. Stay fit. Sustain the industrial growth. Create centers of excellence. Contribute to GDP. Contribute to knowledge development. Contribute to Human Capital Development.

Good luck for your efforts in IRG