Higher education is experiencing more turbulence than ever before–changing and making business and finance models increasingly complex. As it stands now, higher education systems operate off a combination of tuition, philanthropy, investments, public funding and research dollars.
Yet, with enrollment patterns steadily declining and both state and federal funding decreasing, colleges and universities nationwide are struggling to keep education affordable for students, while also maintaining revenue and enrollment levels.
Where does this hit the hardest? Smaller community colleges outside of major urban areas can have less access to capital, so they suffer more financially than their four-year university counterparts. As the majority of community colleges are public institutions or not-for-profit organizations, they rely almost completely on state funding for their entire budget and annual planning.
In fact, community colleges often do not have the same luxury of receiving research dollars, endowments or generous alumni donations, as their students often only attend for a couple of years before moving on to the workforce or other educational systems.
For them, an ever-decreasing financial pie gets stretched even further. Determining a strategy on how to make up for that revenue loss is absolutely crucial for their future. Without an effective and sustainable financial structure, community colleges will fall behind in this volatile education market, which is where cloud technology can help.
Cloud technology can provide:
1. Visibility into governing dollars: Higher education systems, because of their funding structures, often operate as separate governing entities – responsible for their own financial planning and reporting. However, too many community colleges are still relying on spreadsheets and are not properly equipped to provide the high-level financial reporting needed to create in-depth profit and loss statements, which makes it nearly impossible to clearly outline allocations of their funds for stakeholders and even enrolled students.
With cloud-based enterprise performance management (EPM) solutions that take scenario planning to a new level, community colleges are better able to meet statutory and management reporting requirements, providing increased visibility into where funding is coming from, how much they are receiving, any tuition changes and fluctuating student aid amounts. This helps them to become more efficient and effective with timely allocation of public and private dollars.
(Next page: 2 more ways cloud technology cuts costs)
2. Insights to predict enrollment and hiring trends: Community colleges experience more enrollment volatility than other higher education institutions, as their student base can change drastically from one semester to another. This makes it harder for their leadership to predict enrollment trends and plan and model appropriate budgets for the fiscal year. Cloud systems can aggregate all of this data and more accurately forecast enrollment trends to help colleges budget for annual costs and proactively prepare for future enrollment.
Additionally, cloud technology helps to monitor a community college’s largest cost driver – personnel expenses – including salaries, benefits and payouts for tenured professors, their most valuable asset. EPM cloud platforms help college planners account for current salaries, while tracking and predicting student headcount that will dictate needs for future positions. The data analysis delivered via the cloud allows colleges to react to their current financial environment, while also looking ahead and planning for the future.
3. Reduced IT time and spending: Sadly, IT departments at community colleges can be overlooked. This can leave a critical function understaffed and bogged down in time-consuming manual reporting tasks instead of focusing on the value-adding aspects of their jobs. As a self-contained solution that is managed by a provider rather than the college, EPM cloud platforms free up valuable time for IT departments to focus on innovation, as opposed to updating and integrating technology infrastructure. The cloud also minimizes the cost of upgrading and maintaining legacy hardware, while simultaneously providing improved functionality and security as the fiscal needs of higher education continue to evolve.
Cloud technology now makes it possible for community colleges to benefit from advanced financial systems at a reasonable cost. With sophisticated modeling and reporting provided by cloud-based EPM solutions, college administrative staff can shift their focus from manual tasks to focus on more strategic efforts, providing a more sustainable enrollment model to better support students for years to come.