Data can be used extensively when determining real value for students and informing university financial decisions

How to create a new campus-wide data strategy


Data can be used extensively when determining real value for students and informing university financial decisions

They should also be asking questions like: What are the margins for the various programs? How much of our tuition and fees are being used to cover the expenses of running that course or section? Which programs are requiring subsidies and which programs are contributing revenue to assist other areas?

Calculating these metrics is easier said than done, but doing so will provide a more thorough review and demonstration of the health of your programs, which can be incredibly valuable in conveying the program’s value during the review process. 

Retool the Budget Review Process

As institutions approach the end of the fiscal year, they are hard at work at preparing for the next annual budget review process – whether that be a zero-based budget, breakeven budget, or a responsibility budget center approach. This can be an intimidating and lengthy process depending on the complexity and structure of the institution, but appropriate time should be invested as this is a key piece of the strategy.

While many institutions compare enrollment forecast data with revenue and expenses to adjust the budget by a certain percentage based on available and anticipated funding, a more strategic approach would entail breaking down each program by revenues and expenses based on margins and program-specific expenses to determine where adjustments need to be made. This includes allocating revenue and expenses from other areas to impact the individual budget line items.

For example, programs like biology and chemistry come with the added costs of labs and materials and impact the institution differently than business programs, so asking them both to reduce budget line items the same may not be appropriate and can have a negative impact on a particular program’s ability to meet academic goals.

Examine Faculty Impact

A key driver in the success of academic outcomes is faculty and the resources they provide in fulfilling the university’s mission. However, institutions often overlook this resource in terms of evaluating the financial impact of faculty expenses related to class size and class margins. The combination of these metrics can be compelling in determining what classes full-time faculty are teaching, how many students are needed to offset the expense of each faculty member and how much tuition students are paying to cover the costs of each faculty member who teaches a given class.

Other faculty-focused considerations that are often overlooked is the impact of release or service time, summer teaching hours or research.  All of these factors contribute to the institution’s mission and bring value to the students and university alike but must to be accounted for as part of the cost of faculty instruction.

Consider Auxiliaries and Revenue Centers

Up to this point we have addressed more common points of data or metrics when looking at various campus operations and impacts on strategy. What is often a missed opportunity as a key contributor to both revenue and expenses to institutions is the valuation and impact of the auxiliaries or revenue centers around campus.

If institutions are already looking at this data, it is most likely around the impact of athletics, but room and board, housing, bookstore, conferences and events, and other activities and any other activities that contribute to the campus life experience of the student should also be included. These areas are used by a different variety of students for different purposes, so it is important to allocate revenue and expenses from these areas to get a more accurate representation of the efficiency of the institution. It is equally vital to evaluate where new sources of revenue can be created, or current ones may be expanded to offset expenses.

Measure Student Impacts

Lastly, students have an impact on determining the value of their respective institutions. Students make up a variety of demographics, and how they are attending the institution and engaging with it contributes to how they are impacting it overall. For instance, students involved in athletics or who have scholarships impact the tuition revenue. Students who are attending online versus in person may use fewer resources like the library and parking. Also, students will have different impacts based on program selection due to additional fees for areas like nursing.

In most scenarios these students should not be equally weighted for the allocation of resources and the revenue and expenses associated with them. Remember, the goal is to balance the demands of effectively educating students while operating efficiently as an institution by understanding and becoming more aware of the true costs of academic programs and the costs to educate a student.

Ultimately, including data from more areas across campus means college and university leaders will be equipped with more accurate analysis and a greater ability to tell the story of the value that sets their institution apart.

eSchool Media Contributors