Modernizing Your Budget Process. Northwest Ellucian User Group July 2018

Transcription

1 Modernizing Your Budget Process Northwest Ellucian User Group July 2018

2 INTRODUCTION Purpose: Discuss current state of budgeting in higher education and introduce Kaufman Hall s approach Take-aways Learn how business challenges in higher education today call for better budgeting, financial planning, and reporting Understand key elements of modern cloud based Enterprise Performance Management software See Axiom Software in action Benefits: See how to improve transparency and decision making at your institution

3 AGENDA 1. The Changing Higher Education Environment 2. Modernizing Your Budget Process 3. Demonstration 4. About Kaufman Hall

4 MARKET DYNAMICS

5 SIGNIFICANT CHALLENGES FACING INSTITUTIONS Funding sources at risk Growing expenses Increased competition

6 Is the current business model at your institution sustainable for the next 5-10 years? Sustainable business model 47 % DISAGREE

7 SOMEWHAT UNPREPARED FOR THE FUTURE 64 % 66 % Acknowledge higher education is behind most other industries in terms of adopting modern financial planning practices and tools Say they are not prepared to respond quickly to change, or were unsure if they could use existing tools and processes to do so

8 Better Data Are Required to Support Better Decision Making 87 % say that more insightful data into their institution s performance would result in better financial decisions Program Costs Benchmarking Administrative costs Student costs Other (please specify) 37% 31% 15% 10% 7% 0% 5% 10% 15% 20% 25% 30% 35% 40%

9 Section Summary The challenges in higher education today demand new approaches to financial planning, budgeting, and reporting The current state of solutions and processes needs to improve. Modern EPM systems have been proven in many industries Institutions and professionals that can understand change and effectively move their organizations will thrive in time of uncertainty

10 INTRODUCTION TO AXIOM SOFTWARE 2017 Kaufman, Hall & Associates, LLC. All rights reserved.

11 Level of Detail Annual budget approval & GAAP Audit AN INTEGRATED PLANNING FRAMEWORK HIGH STRATEGIC PLAN LONG RANGE PLANNING Capital Budget Operating Budget Forecast Tuition Planning Labor Allocations LOW GRANT PLANNING Duration in Months 2017 Kaufman, Hall & Associates, LLC. All rights reserved.

12 AXIOM SOFTWARE CORE TECHNOLOGY BUSINESS MODELLING DATA Financial Payroll Enrollment OPERATING BUDGET TUITION & ENROLLMENT LONG RANGE PLANNING CONFIGURABLE BUSINESS LOGIC COLLABORATION TOOLS DIMENSIONS Account Department Student Type Modeling Logic & % Allocations Rules Plan Drivers Message Stream Workflow REPORTING & ANALYSIS Reporting Interactive Dashboards Ad Hoc Analysis 2017 Kaufman, Hall & Associates, LLC. All rights reserved.

13 AXIOM SOFTWARE ADOPTED BY 200,000+ USERS ROBUST DATA INTEGRATION MODERN CLOUD TECHNOLOGY Any cloud or on premise source SOC2 Compliant Optimized Performance Rapid Deployment Industry Leading Security 99.5% Uptime Guarantee Cloud Service Powered by

14 TODAY S FOCUS AREAS Reporting Budgeting Tuition Planning Long-range planning Which of the following financial planning and analysis initiatives are your institution looking to improve in the coming academic year? Operational budgeting and forecasting Reporting and analysis to support decision making Long-range financial planning Capital planning and tracking Post-award grant management Other (please specify) 3% 21% 39% 60% 71% 74% 0% 10% 20% 30% 40% 50% 60% 70% 80%

15 REPORTING & ANALYTICS Provide Better Insights ROLE Sr. Management Finance Front Line Tuition Planning HIGHLIGHTS Enable your university to be better decisions makers by providing the right tools and accurate data through: Interactive Data Visualizations that provide KPIs, Consolidated Results, Outliers, & Explanations Detailed Modeling & Reporting with Drill Through Analysis Intuitive drag-and-drop ad hoc reporting features Model the Impact Leverage of report Changes distribution in Tuition to Revenue improve efficiency

16 REPORTING AND ANALYTICS DEMO

17 Guiding Principles for Operational Budgeting The operational budget is a part of a strategic decision making framework The operational budget flows from the long range plan The long range plan sets operational targets The operating budget assigns resources and accountability A best practice operational budget process engages the organization which leads to institutional buy-in to financial plans

18 BUDGETING ROLE HIGHLIGHTS Take Control of Planning Submitter Central Administrator Optimize Budgeting and Forecasting by: Incorporating Higher Education Best Practices Configuring the Model to Meet Unique Institutional Needs Leveraging Rich Driver and Workflow Capabilities Providing a Guided Process with intuitive user experience Tuition Planning Model the Impact of Changes in Tuition Revenue

19 BUDGETING DEMONSTRATION

20 OPTIMIZING TUITION PLANNING Leverage flexible modeling to support an unlimited number of tuition rates and fees, which then can be applied to a cohort- or program-level of detail Better predict tuition and fee revenue based on user-defined assumptions and trend data Create scenarios that show the impact of growth/reduction enrollment assumptions, tuition rate changes, differential tuition rates, and the effects of adding new programs

21 TUITION PLANNING Manage & Model ROLE Enrollment Office Budget Office Institutional Research HIGHLIGHTS Optimize Process better predict tuition and fee revenue based on user defined assumptions and trend data Configure Model to Meet Your Needs support an unlimited number of tuition rates and fees, and these can be applied to a cohort, program, or any level of detail Execute What If Analysis create scenarios that show the impact of growth/reduction enrollment assumptions, tuition rate changes, and the effects of adding new programs Tuition Planning Model the Impact of Changes in Tuition Revenue

22 TUITION PLANNING DEMONSTRATION

23 Long Range Planning Base Case Given current trends, what is our financial outlook 5-10 years? Base Case (Conservative) Forecasting methods include: Statistically-driven modeling Enrollment and tuition forecasting Expense growth Non-tuition revenues Capital expenditures Debt Initiatives As we prioritize growth or cost containment initiatives, what is the incremental impact? Initiative #1 Initiative #2 Examples: Online offering Satellite campus New residence hall Faculty recruitment New research building Athletic investments International expansion New instructional facilities Initiative #3 Initiative #4 Scenarios What is the impact on our baseline projections given the initiatives we ve proposed? Consolidated Results Analysis contains: Income Statement Balance Sheet Cash Flow Key Ratios 23

24 LONG-RANGE PLANNING Model The Future ROLE CFO Budget Office Treasurer s Office HIGHLIGHTS Enhance Strategic Decision Making - view full financial position through an integrated set of financial statements, including the statement of activities, balance sheet, and statement of cash flows Perform Robust Scenario Planning easily create scenarios to mix and match driver assumptions and initiatives to compare different courses of action Integrate Planning Processes connect Tuition long Planning range plan with other planning Model the processes Impact of Changes in Tuition Revenue

25 NEW THINKING & APPROACH

26 KAUFMAN HALL: YOUR PERFORMANCE MANAGEMENT PARTNER

27 Guiding strategy and enabling outcomes with comprehensive and integrated financial consulting and performance management software tools. 30 # Years Customer Satisfaction Professionals Helping senior leaders realize success amid changing market Top financial advisor and #1 rated software platform by Gartner in offices throughout the United States

28 AXIOM SOFTWARE SOLUTIONS Strategic Financial Planning Reporting & Analytics Budgeting & Forecasting Long-Range Planning Executive Dashboards Budgeting & Forecasting Capital Planning & Tracking Financial Reporting Grants Planning Tuition Planning Ad Hoc Reporting Allocations Align financial plans with strategic goals, manage capital initiatives, and communicate key financial metrics and ratios to leadership. An integrated solution for developing management reports and performing ad hoc analysis. Engage academic and administrative leaders in budget formulation to align resources and manage financial performance.

29 OUR INTEGRATED ADVISORY SERVICES Process Design Treasury Management Budget Model Design Financial Planning & Analytics

30 CONTINUING OUR PARTNERSHIPS IN HIGHER ED Annual & Regional Meetings CBO Speaks Podcast Series Selected Workshops

31 Contact Tony Ard Todd Weinstein