Closing the money gap in higher education with enterprise software
Posted by Austin Laird
The latest survey of chief business officers at US institutions tells the story of a move toward more shared services, fewer admin roles and increasing demand for enterprise systems.
As part of the struggle to develop new business models while doing more with less, US institutions of higher education are forever looking at ways to close the gap between funding and costs. Unfortunately, according to the latest survey of chief business officers (CBOs), the top strategy is no longer working.
Among efforts to reduce costs, more higher education institutions are moving, or exploring a move, to shared programs, services and processes while reducing the number of admin roles. Meanwhile, there’s a side issue: more than half of CBOs feel they don’t have access to the data to make informed, performance-related decisions.
Working in the background, says the survey, technology solutions to the problem are gaining traction.
Age-old tactics not working
Last year’s annual survey by Inside Higher Ed and Gallup — the eighth of its kind — shows the tried-and-tested strategies for generating revenue are still the favorites among CBOs.
The 2018 Survey of College and University Business Officers lists the top three (by percentage of CBOs that strongly agree or agree) as increasing enrolment (72 percent), creating new revenue-generating programs (63 percent) and launching new master’s degrees (58 percent).
These come as no surprise. But, while the rank order of these strategies has not changed much in recent years, the effectiveness of the top strategy has. Although increasing enrolment remains the top strategy to close the budget gap, the percentage of universities and colleges achieving that is lower than in the past — it exceeded 80 percent in 2015 and 2016 but has been closer to 70 percent in the last two years.
Again, this is nothing new. So, how can higher education institutions combat declining enrolments?
More collaboration, fewer admin roles
Among the top 20 strategies to reduce costs ranked by the study, new ones are gaining weight.
More institutions of higher education have had “serious talks” about merging with another college or university (up to 17 percent from 12 percent a year ago). More than a quarter of CBOs say senior officials have had serious discussions about consolidating programs or services. And half believe their college should share administrative functions or combine academic programs with another institution.
Among the CBOs which believe their institution should merge, share administrative functions or combine academic programs, four out of five (81 percent) see the primary benefits as a reduction in expenses. And two out of five (39 percent) believe it will “take the institution to the next level” in terms of enrollment.
These two approaches are among the top 11 ranked strategies: sharing administrative services with other institutions (33 percent) and reducing the number of admin roles (31 percent). In the top 20, CBOs say their colleges are also considering promoting early retirement for administrators and staff (28 percent) and even outsourcing more administrative services (24 percent).
Colleges and universities in the US are pooling resources to weather the 'perfect storm', as PwC describes the current financial challenges facing higher education.
It also seems the days of manual admin staff are numbered.
Use of enterprise systems
More than half (58 percent) of the public institutions in the 2018 CBO survey are part of a multi-campus system, a structure which affords them cost savings by sharing functions and programs.
More than three quarters of these multi-campus-system members already share enterprise software systems across campuses; 80 percent share legal services and 44 percent share compliance services. The CBOs that don’t currently share these systems and services say they are “more likely to say their college should consider, rather than not consider,” sharing them in the future.
The survey adds that 72 percent share internal audit services, just over half share human resources and 45 percent share academic offerings.
The way these multi-campus public institutions manage shared services with enterprise software is a key trend. And it explains why administration staff will be in less demand in the competitive, consumer-led future.
Let’s explore further.
Making sense of data — the case for automation
This year’s Inside Higher Ed and Gallup survey points to a growing trend for higher education institutions adopting, or considering adopting, enterprise software to reduce manual administrative tasks and automate the administration of the student lifecycle.
But this year’s independent study also reveals that less than half of CBOs believe their institution has the data and other information it needs to make informed decisions about the performance of each of six different programs, work units or resources on campus.
This is a telling statistic.
The study says less than half of CBOs indicate having the requisite information to decide which academic programs should be eliminated or enhanced (45 percent), the performance of individual faculty members (42 percent) and the performance of administrative technology (41 percent).
That’s a huge lack of data insight which, by their own admission, is clearly affecting performance-related decision-making.
The problem is, making sense of increasing volumes of data in today’s world is impossible with human intelligence alone. Combined with the trend towards sharing services, particularly the phasing out of admin roles, it builds a strong case for enterprise software built specifically for education.
Human and machine in harmony
The quickest, smartest way to make sense of increasing volumes of data is to partner humans with artificial intelligence and machine learning — it may sound futuristic but the capability is already here, and in use.
Today, the top institutions are managing the entire scope of university functions with an end-to-end student information system (SIS) that automates the entire student lifecycle.
Here’s an example.
According to the survey, nine out of ten CBOs run financial reports monthly or quarterly. Only eight percent run them weekly. With an enterprise resource planning system it can be done as often as you like, anytime, anywhere at the touch of a button, with almost zero training because the data is presented in user interfaces, like dashboards, which mimic social tools.
What metrics are important?
CBOs rely on a number of measures to assess their institution’s financial health. All seven measures included in the 2018 CBO survey are rated as very important or important measures by at least eight out of 10 CBOs.
The most important metric was net operating revenues (55 percent), followed by increase or decrease in unrestricted net assets (53 percent), then rate of growth of net tuition per student (52%). The fourth most important was primary reserve ratio (44 percent), fifth was monthly or annual days of cash on hand (43%), then viability ratio (36 percent) and finally return on net assets ratio (23 percent).
All these metrics are important, but what if it takes an army of administration staff and complex IT competencies to create reports?
A modern system built specifically for higher education institutions gives you a 360-degree visibility into departments and projects alongside powerful data analytics, so you can monitor, report and improve key metrics and make decisions based on accurate, up-to-date data.
A single, cloud-based solution for higher education institutions eliminates expensive, disparate systems and laborious admin. Visual dashboards with drag-and-drop functionality make it easy and intuitive to use. And workflow-support tools liberate your admin and IT staff for higher-value functions.
Less administration, more education (and more space)
Your institution wasn’t founded to manage finance, HR, payroll, timesheets and student data. Its mission is to help young people be the best they can be. The less time you and your colleagues spend on tedious administration, the more you can focus on delivering an empowering student experience.
Technology like Unit4 Student Management allows you to do less administration and more education so you can create space for people to do work that really matters: to boost student success while powering institutional growth, improving institutional effectiveness and delivering research excellence.
Are you confident about your institution's financial stability, transparency, and future? To find out how leaders perceive and address the financial challenges facing higher education institutions in the US, download the 2018 Survey of College and University Business Officers — A study by Inside Higher Ed and Gallup