Anticipation is in the air, and perhaps, even a hint of cooler weather that signifies fall is coming. Recent high school graduates are eager to begin their higher education journey, and many continuing students are excited to see their classmates and professors in person after more than a year of online study and to take in a game of soccer, football, or basketball in a raucous stadium or arena.
But hold on, not so fast. Once again, colleges and universities are faced with the agonizing dilemma of whether classes will be in-person, online, or hybrid. Will stadiums, parking lots, dormitories, and dining halls be open to full capacity? What are the potential costs of implementing a regimen of testing and vaccination for students and employees? How will financial managers be able to prepare realistic budgets and forecasts when they are so uncertain about how events will unfold next week, let alone next semester or next year?
Dealing with Decreased Enrollment
Some colleges and universities may be particularly affected by the precipitous decline in the number of international students attending their institution. Colleges and universities in the United States attract more than a million international students a year. Higher education is one of America’s top service exports, generating $42 billion in revenue. The pandemic, visa restrictions, rising tuition, and a perception of poor safety in America have driven new international student enrollment down by 72 percent. Many schools had turned to this source of revenue some years ago as a way to address the financial struggles that had been confronting them for nearly a decade due to falling domestic enrollment, reduced levels of state subsidy, and the decline of private philanthropic support.
So, what can higher education leaders and financial managers do to react quickly and decisively to the rapid and constant changes they are facing, and allocate resources wisely while preserving financial solvency and even making changes to position their institution for future growth and prosperity?
Adopting New Budget Models
A leading national advisory firm to the higher education sector advocates that institutions adopt new budget models to prepare for a stronger financial future. Universities with budget models that enable broad participation in resource allocation from departmental leaders all across campus will have a big head start in reaching collaborative, data-informed judgments to stabilize revenues and costs. In order to support more integrated and informed financial planning, access to reliable data is critical for establishing common assumptions and facilitating dialogue amongst stakeholders on any potential change. But first, they must establish new reporting capabilities that provide visibility into credit hours taught, student headcounts, space utilization, and other insights that illustrate their current status.
Experienced financial managers in the higher education sector understood all too well that legacy financial systems and spreadsheets were inadequate to build and maintain such a budget model. But as it turns out, Anaplan's Connected Planning software and models provide exactly the right platform to build these models, as well as keep up with the complexity, uncertainty, and rapid changes facing the sector now and in the future.
Connected Planning with Anaplan
Anaplan’s core strength lies in its capability to provide a unified cloud platform to create Connected Planning processes across an organization. The Anaplan platform collects and analyzes data from across an organization in a single location, enabling both high-level and granular analyses and facilitating data-sharing with all stakeholders. Anaplan's software tools, models, and methodologies enable organizations to transform their budgeting and planning capabilities and allow financial managers to make decisions faster and with greater confidence. Those institutions that have implemented the Anaplan software find it far easier to expand their analytical capabilities to revenue and expense forecasts, balance sheet ratios, cash flow, and other key metrics of financial and operational performance that help them to become agile organizations, ready to deal with rapid and constant change, and meet the challenges of the future.
In addition, the Anaplan platform is constantly being updated with new features and functionality that enable higher education financial managers to model complexity, communicate effectively, and easily prepare multiple scenarios to support and optimize resource allocation in a constantly and rapidly changing environment. For example, Anaplan is a pioneer in Extended Planning and Analysis (xP&A), which recognizes that disruption is now “the new normal,” and therefore pivoting, course correcting, and transforming are now an ongoing part of everyday business.
Planning for Colleges and Universities
Anaplan partner firm, truED Consulting, specializes in financial planning and data analysis services to colleges and universities of all sizes and mission types (i.e., community college, private liberal arts, research university, multi-campus state system). As an Anaplan partner with a sole focus on the higher education industry, truED Consulting provides institutions with the ability to build unified planning, budgeting, and forecasting platform across the institution.
In the past two years, truED Consulting has helped a variety of colleges and universities to implement Anaplan and achieve significant improvements in the way annual budgets and long-range plans are created, especially compared to cumbersome, error-prone, and inflexible legacy financial systems.
A private Catholic research institution in the midwest was challenged to do more with less. To meet this challenge while fulfilling their mission, institutional leaders recognized the need to optimize resource allocation, which meant prioritizing strategic institutional objectives and maximizing the return on available funds. After reviewing multiple products from several vendors, they selected Anaplan to help leverage a new integrated financial modeling framework that supports data‐informed decision-making for senior leadership. Through proforma financial modeling and scenario analysis, they now have the capability to evaluate changing business variables, assess financial risk, and analyze strategic options to guide long-term fiscal sustainability. This new budget model features driver-based financial forecasting and scenario analysis that simplifies and speeds up the process and allows more stakeholders to be involved in decision making.
A multi-campus community college in the eastern US sought to better leverage data and tools to support decision-making in the face of great uncertainty. By developing a long-range planning tool, with the help of Anaplan software, they built the capability to plan proactively and strategically—beyond the annual budget—to help senior leadership execute its strategic plan and guide long-term fiscal sustainability. College leadership needed a five-year strategic outlook of the college, projecting out their proforma financial statements and key metrics, to enable the college to evaluate strategic options. Key features of the new budget model included:
The ability to perform driver-based, proforma financial modeling across the statement of activities, balance sheet, and cash flow statement.
The ability to perform what-if scenario modeling to assess impacts to financial plans and key metrics, including the Moody’s debt rating metric and the Composite Financial Index.
These are just two of many examples of universities and colleges that were helped by truED to start on the Anaplan Connected Planning journey. As higher education organizations discover the substantial benefits of implementing Anaplan to handle their rapidly evolving financial planning needs, there is a growing awareness within the sector of the advantages of moving to an integrated cloud-based platform, especially in this environment of rapid and constant change.
... View more
In the 16 months from March 2020 to July 2021, business, government, and social organizations in the United States have faced unprecedented challenges to their very survival, as well as vast uncertainty about when there would be a return to normal economic conditions, or even what “the new normal” might look like. But now there are plentiful signs that economic growth is about to take off, although that may unfold at a quite different rate for some organizations and industries than others. Given the many unknown factors and conditions that can affect future revenue and expense (especially labor costs and supply chains,) there is a tremendous opportunity for Anaplan partners to help their current customers build on their existing Anaplan platform to improve profitability, aid in resource allocation decisions, and maximize adaptability to the still swiftly evolving environment.
This is especially true for the higher education sector, which was facing some existential challenges even before March 2020. The good news is that one of the major credit rating agencies in the US recently raised its outlook for the sector from negative to stable, noting improved applications for enrollment, more consistent state funding, and increased revenue from students living and dining on campus.
However, this applies mainly to research and flagship state institutions and may prove difficult to achieve for smaller colleges that have fewer financial resources and weaker demand for their programs. There is an old saying that is particularly appropriate for the higher education sector at this moment: “When you see light at the end of the tunnel, beware that it may be a freight train heading your way.” Many colleges are on thin ice financially. Much of higher education has been struggling for some time when it comes to its financial health. Levels of state funding still have not returned to pre-2008 levels, degree-seeking enrollments are now in their eleventh consecutive year of decline, and the pandemic forced many colleges to draw down on financial reserves. Federal stimulus funding helped support many U.S. colleges the past year. But without large federal infusions going forward, there are a number of colleges and universities that may well face closure in the next 1-2 years.
As many college and university financial managers discovered over the past two years, Anaplan's Connected Planning software and models provide an ideal platform to address both their fundamental planning processes, and the ability to quickly and easily add new features and functionality to address emerging challenges. This is particularly true of the requirement to continuously monitor spending in order to remain safely within the parameters of existing and projected financial resources. A leading expert in higher education has called on higher education leaders (senior administration and governing boards) to optimize spending and prioritize areas such as student success, rather than relying on incremental spending formulas typically used by college and university financial managers.
In this environment, Anaplan partner truED Consulting has an opportunity to help its existing college and university customers to expand their use of the Anaplan's Connected Planning platform and prepare themselves for ongoing financial challenges and evolving into agile organizations. The mini-case study of several truED clients in this blog may serve as a guide for other Anaplan partners who strive to create additional value for their current customers by leveraging the strengths and ease of use of Anaplan software.
The Anaplan platform replaces the patchwork of outdated tools from other legacy enterprise performance management tools that do not interact well with each other and does away with the manual planning processes that are often overly complex, inefficient, and costly. The Anaplan platform can handle high volumes of data processed in real-time. The Anaplan modeling engine—based on proprietary Hyperblock technology—enables thousands of concurrent users to all access a centralized data pool. While legacy planning solutions tend to be focused solely on the finance department, Anaplan’s platform enables collaborative planning across all areas. The technology lets users create detailed planning models that incorporate data down to the transaction level (across university departments, schools, and campuses) to improve decision-making.
The Anaplan platform is constantly being updated with new features and functionality that enable higher education financial managers to model complexity, communicate effectively, and easily prepare multiple scenarios to support and optimize resource allocation in a dynamic environment. For example, the company recently announced that model-to-model import is now available in CloudWorks. Easy to set up and ready to use, model-to-model import helps users move data from one model to another—on the schedule that is right for them and without the need for additional IT resources. Anaplan Extensions for Google Sheets, Microsoft Excel, and PowerPoint help enable agile decision-making and break down silos between online and offline analysis and reporting. And Anaplan’s AppHub enables users to build new solutions and models faster by providing access to proven and tested models and experts with deep insights into workforce planning, revenue forecasting, and scenario modeling.
Anaplan partner firm, truED Consulting, specializes in financial planning and data analysis services exclusively to colleges and universities of all sizes and mission types (i.e., community college, private liberal arts, research university, multi-campus state system). As an Anaplan Partner with a sole focus on the higher education industry, truED Consulting provides institutions with the ability to build a unified planning, budgeting, and forecasting platform across the institution.
In the past two years, truED Consulting helped a variety of colleges and universities to implement Anaplan models for their core annual budgeting processes. Replacing their legacy systems with a Connected Planning platform has helped them to become more agile and survive financially. But with the ongoing challenges faced by the higher education sector, they are ready and able to implement new features and functionality to stay ahead of the curve.
Example Use Cases
A large private research university in southeast U.S. chose multi-year forecasting as the first phase of their Anaplan deployment. Most recently, they have rolled out a new funding request process for departments and a new academic program request process for schools. And now with the help of truED, they are focused on a data hub as Phase 2. Phase 3 will focus on operational and position budgeting, while Phase 4 will add capital budgeting.
A faith-based university in the southwest U.S. went live with its core budgeting process. Now with the help of truED, it is expanding its Anaplan use cases with Position/HR Reporting and Current Year Forecasting. Other potential use cases on the horizon include deploying to their “Online Campus” with monthly reporting and enrollment modeling.
The flagship campus of a university system in the western U.S. recently completed their first cycle in Anaplan for their annual budget process, focused on operational budgeting and position budgeting. Since then, with the help of truED, they have deployed long-range planning. They have more Anaplan expansion plans for the future that include grants planning and medical center planning. In addition, the university system could easily create a new model to help analyze and evaluate the revenue and expense implications of a merger with a small private institution that is struggling financially and may have to close if they are not acquired by a larger, financially stronger university.
A public university in the southwest US completed its second annual budget cycle in Anaplan this year. Since then, our truED team has helped them to deploy long-range forecasting and commitment planning as well.
These are just a few of many examples of universities and colleges that were helped with their initial Anaplan implementation by truED. And now that they have realized the awesome benefits that the Connected Planning platform has to offer, they are capitalizing on the ability to quickly and easily add new functionality and models to stay in front of the continuous challenges before their industry.
Anaplan partners can help their current customers to expand their Anaplan usage and reap ongoing benefits from the power of the Connected Planning platform. This bodes very well for the future growth of Anaplan's Connected Planning software platform and its uses across many sectors of business, government, and society.
... View more
In the last 15 months, colleges and universities (perhaps more than any other sector of business and society) have faced enormous challenges when it comes to preparing annual budgets and long-range financial plans. There was great uncertainty about the major drivers of revenue such as enrollments, government support, and philanthropy, as well as uncertainty about major elements of cost such as staffing levels, safety modifications for classrooms and dormitories, and investments in new technology to support distance learning when campuses were shut down.
However, well before March 2020, higher education was already facing several long-term trends that were going to have an enormous impact on their ability to thrive and survive financially, and that cause significant problems for financial managers trying to create realistic and predictable annual budgets.
Total enrollment at public colleges and universities declined for the ninth consecutive year, and the pandemic exacerbated this trend.
The average net tuition and fee revenue received by public and private schools has been steadily declining for over a decade. By providing generous discounts (grants, fellowships, and scholarships), these institutions forgo about half the revenue they otherwise would collect if they charged all students the tuition and fee sticker price.
Despite eight years of increases in state support, public colleges entered the 2020 recession with historically low funding. After unprecedented cuts during the last two economic recessions, education appropriations per FTE today remain 6.0 percent and 14.6 percent below the 2008 and 2001 levels, respectively.
Perhaps most troubling of all, because of the trend of a declining US birthrate (which leads to smaller numbers of high school graduates,) the higher education sector is facing an existential threat to the traditional market of 18-21 year old’s that are the key demographic for the majority of institutions. The number of college students has declined by an unprecedented 2.6 million in the last decade, with a further drop of from 11-to-15 percent projected starting in the mid-2020s.
Experienced financial managers in the higher education sector could clearly see that legacy financial systems and spreadsheets are now inadequate to keep up with the complexity, uncertainty, and rapid changes facing the sector now and in the future. They began seeking solutions for new enabling software and technology that is 1) comprehensive, 2) robust enough for “power users” but easy to learn and use with an intuitive interface for any level of staff, 3) easily integrated with existing systems for operations such as HR and GL, and 4) especially that facilitates greater cohesion among teams and data. As it turns out, Anaplan's Connected Planning software and models meet all of these criteria and more!
Anaplan’s core strength lies in its capability to provide a unified cloud platform to create Connected Planning processes across an organization. The Anaplan platform collects and analyzes data from across an organization in a single location, enabling both high-level and granular analyses and facilitating data-sharing with all stakeholders. Anaplan's Connected Planning software tools, models, and methodologies enable organizations to transform their budgeting and planning capabilities and allow financial managers to make decisions faster and with greater confidence.
The Anaplan platform is constantly being updated with new features and functionality that enable higher education financial managers to model complexity, communicate effectively, and easily prepare multiple scenarios to support and optimize resource allocation in a dynamic environment.
Anaplan partner firm, truED Consulting, specializes in financial planning and data analysis services to colleges and universities of all sizes and mission (i.e., community college, private liberal arts, research university, multi-campus state system) types. As an Anaplan Partner with a sole focus on the higher education industry, truED Consulting provides institutions with the ability to build a unified planning, budgeting, and forecasting platform across the institution.
In the past two years, truED Consulting has helped a variety of colleges and universities implement Anaplan and achieve significant improvements in the way annual budgets and long-range plans are created, and especially compared to cumbersome, error-prone, and inflexible legacy financial systems.
For example: The largest private research university in the US has a network of campuses around the globe. At one campus in Asia, the goal was to implement new technology to enable a more insightful planning process, with a focus on budgeting, long-range planning, scenario analysis, and enhanced user experience. The guiding principles of the project were: 1) Allow users to maintain their unique driver-based models while still effectively consolidating into the Budget Office format Produce pro forma financial statements and key metrics from multi-year financial plans; 2) Enable live and fully-integrated what-if scenario planning and stress testing; 3) Replace decentralized collection of Excel planning models and processes with more comprehensive and fully-integrated systems; 4) Increase efficiency by reducing the amount of time and resources it takes to enter, reconcile, consolidate, and present operating budgets and financial plans; 5) Partner effectively with department heads and leadership to transform their strategic goals into operating budgets; 6) Provide planners with the necessary reference tools in one application.
With the adoption of Anaplan, the campus was able to achieve its goal and succeed beyond expectation. In particular, they cited the main differences between the Anaplan implementation and the legacy financial systems as summarized in the chart below.
A multi-campus university system in the western U.S. faced a vastly different set of challenges based on the economic and demographic shifts in their state. At the flagship campus of the system, the financial managers sought to replace the existing legacy system with an application that utilizes newer technology and provides greater value to the campus community. They chose to implement a cloud-based platform for developing, maintaining and reporting on budgets and forecasts. And the solution eventually had to be easily adopted by the other campuses in the system.
After the implementation of Anaplan, the flagship campus achieved the desired process improvements, time savings, and user satisfaction as summarized in the chart below.
These are just two of many examples of universities and colleges that were helped by truED. As more higher education organizations discover the substantial benefits of implementing Anaplan to handle their financial planning needs, there is a growing awareness within the sector of the advantages of moving to an integrated cloud-based platform, and resistance (or inertia) to moving away from spreadsheets and legacy financial systems is growing rapidly.
In this blog post, we have taken a deeper dive into the “before and after” of legacy financial planning systems and processes versus the superior performance of Anaplan's Connected Planning software for cloud-based planning, budgeting, and forecasting (PB&F) solutions, especially the ability to seamlessly connect people, data, and plans. As one experienced university financial manager has astutely noted, the Enterprise Resource Planning “super-power” of the institution is not merely the software platform, but rather “our people who work together on end-to-end processes, our people who identify the opportunities to improve both the technical and physical flows around supporting our organization, our people who mobilize those ideas into delivered solutions.”
... View more
In the past year, business, government, and civic and cultural institutions faced enormous challenges that forced them to re-evaluate and change how they operate in order to survive. This was especially the case in the higher education sector, which was already under pressure to adapt its business model to keep up with changing demographics and greater scrutiny from the public to demonstrate the value added by their products and services.
But now we see that some higher education institutions have successfully prepared themselves for “the new normal” by transforming the way they allocate resources to better manage uncertain revenue streams and control costs. They were able to optimize resource allocation in order to be financially sustainable and meet their long-term strategic objectives, through the adoption of next-generation enabling technology for preparing budgets, forecasts, and long-range plans.
More importantly, they were able to connect people, data, and plans in a seamless and efficient manner that gave their executive leadership teams (senior administration and governing board members) the right information at the right time to make the decisions required to stay ahead of the curve. This is not an easy task in an “industry” where there is a norm of shared governance. In that environment, although the board of trustees has primary fiduciary responsibilities, it delegates primary management responsibility to the president and senior administration and primary responsibility for academic programs to the faculty. The responsibility of the board is to provide advice and counsel but leave operational decisions to the administration. Therefore, it becomes critically important that there be a “single source of truth” that provides timely, accurate, and easily accessible information for critical decisions.
When there is not alignment among all the stakeholders about the validity of financial information, there can be serious obstacles to making the best resource allocation decisions.
So, what did some of these higher education institutions do to more efficiently and effectively gather and analyze and present the information and insights required to meet these challenges and thrive financially? They are among the first in the higher education sector to adopt Anaplan's Connected Planning software and models!
Anaplan’s core strength lies in its capability to provide a unified cloud platform to create connected planning processes across an organization to make decisions better and faster. This is of significant value to higher education institutions that are comprised of very siloed functional departments. The Anaplan platform collects and analyzes data from across an organization in a single location, enabling both high-level and granular analyses and facilitating data-sharing with all stakeholders. Anaplan's Connected Planning software tools, models, and methodologies enable organizations to transform their planning and decision-making capabilities and allow leaders to make decisions faster and with greater confidence.
Like many for-profit business organizations, colleges and universities typically rely on a combination of Excel worksheets and proprietary point solutions to manage their planning and budgeting tasks. Excel is a leading platform for most planning activities because it is easy to use and can be owned by the individual business units, without much involvement from central IT departments. It is also very flexible and can be adapted to most planning needs.
However, Excel has some important shortcomings (as highlighted in a recent white paper from Anaplan partner Twelve Consulting Group) that limit its ability to serve as the backbone for planning and budgeting in complex organizations like colleges and universities:
Scalability: Spreadsheets are limited in the volume of data they can handle, a problem that is particularly acute for large and complex institutions like colleges and universities that contain multiple departments and schools and perhaps even multiple locations, in the case of state university systems.
Security and consistency: Spreadsheets are easily changed and shared internally and externally so that there can be inconsistencies and the “single version of truth” is often lost.
Auditability: Spreadsheet data are easily changed and cannot always be traced to their origin, which can lead to a lack of shared trust in plans and models, particularly in the case of organizations with a culture of shared governance, as noted in the story cited above.
Although proprietary point solutions can overcome many of these flaws, they also have a weakness in that they are focused on a single business function and usually cannot be integrated with other software solutions, and which often require extensive support and resources from a centralized IT department. Therein lies the beauty of Anaplan cloud-based software, which makes it the ideal platform for college and university financial managers and executive leaders who need to gather and analyze data and compare alternative scenarios that can serve as the basis for sound and trusted resources allocation decisions quickly and easily.
Anaplan partner firm, truED Consulting, specializes in financial planning and data analysis services to colleges and universities of all sizes and mission (i.e., community college, private liberal arts, research university, multi-campus state system) types. As an Anaplan partner with a sole focus on the higher education industry, truED Consulting provides institutions with the ability to build unified planning, budgeting, and forecasting platform across the institution, eliminating the reliance on Excel worksheets and point solutions still used by most colleges and universities.
How Anaplan helps
In the past year, truED Consulting has helped a variety of colleges and universities to implement Anaplan and achieve a radical improvement in the way budgets and forecasts are created, and especially in meeting the information needs of the executive leaders who must make difficult decisions under conditions of urgency and great uncertainty.
A medium-sized private faith-based university in the northeast US started on its Connected Planning journey to replace the static spreadsheets used in its distributed budgeting and planning processes with a cloud-based platform that integrated with its Banner Enterprise System. This was needed to facilitate multiple real-time scenario modeling, reduce administrative inefficiencies, and increase transparency, as well as increase stakeholder accountability and engagement. The financial managers of the university were tasked by the board of trustees to implement new planning systems and reports that were also completely integrated with the audited financial statements.
A world-class private research university in the southeast U.S. embarked on its Connected Planning journey to help the school ensure financial sustainability through robust scenario analysis and modeling of a Responsibility Center Management (RCM) framework. The RCM model can be highly effective in the allocation of resources in times of great financial uncertainty and instability, but it is often seen as too controversial or complex by the different stakeholder groups within a university. Therefore, it is highly dependent for its success on the ability to rapidly and reliably test multiple allocation formulas and produce scenarios that have the complete trust and confidence of all the parties affected.
These are just a few of many examples of universities and colleges that were helped by truED. As more higher education organizations discover the many benefits of implementing Anaplan to handle their financial planning needs, there is a growing awareness within the sector of the advantages of moving to an integrated cloud-based platform, and resistance (or inertia) to moving away from spreadsheets and point solutions is growing rapidly.
In this blog post, we have examined how colleges and universities that implement Anaplan have been able to speed up the delivery of critical financial and operational data to the executive leadership and improve the quality of resource allocation decisions crucial to the ongoing success of the institution. The next blog post will take a deeper dive into the before and after of legacy financial planning systems and processes versus the superior performance of Anaplan's Connected Planning software for cloud-based planning, budgeting, and forecasting (PB&F) solutions.
... View more
Thanks Jared Dolich! Excellent question. I don't know of any schools who are currently using an Anaplan model to help with admissions. But you are correct that it would be a great tool for managing all the data collected. Most schools use a legacy point solution, perhaps a CRM system, and in many cases it may feed in to other systems used for classroom scheduling, or even alumni relations and fundraising. Much of the actual admissions work is actually a manual process where admissions staff read application files and look for students who will be a good fit and help the school to "shape the class." Sort of like trying to put together a baseball team!
... View more
It has now been more than a year since the coronavirus pandemic began wreaking havoc on all segments of U.S. business and society. Some sectors and organizations have learned how to adapt to the vast changes in how we do business and go about our daily lives while we all await a return to some semblance of normalcy. Perhaps no industry has experienced the dizzying ups and downs as much as higher education. But, even in this environment, there is a way that colleges and universities can transform to become more agile , learn how to better manage the ups and downs, and prepare for what the future may hold.
Pandemic: Financial Impact
The financial impact of the pandemic has been devastating, and only now are the current and long-term losses being identified more accurately. Even some of the wealthiest institutions are feeling the effect of the declines in revenue from the declining enrollment of domestic and international students, as well as from reductions in state appropriations, auxiliary enterprises (e.g., athletics, parking, student housing, and dining), and philanthropy.
In addition to the revenue squeeze, higher education has had to deal with the exponential growth of costs associated with preparing the physical campus to provide a safe environment for students and employees returning to in-person instruction. Campus leaders had to make difficult decisions about expenditures for physical barriers in classrooms, virus testing for students and employees, and reduced capacity in classrooms and dormitories. Simultaneously, they were required to invest more resources to pivot to an online learning model that could provide continuity of instruction, even though it was a less-attractive learning option for many students and parents who questioned the value (and price) of this alternative to the traditional residential campus experience.
The combination of revenue decline and cost inflation also led many institutions to eliminate faculty and staff positions, which in turn exacerbated the problems of providing the high level of educational experience necessary to justify a high tuition “sticker price” that had been growing at rates far in excess of inflation for well more than a decade.
Creating Agility With Connected Planning
So, what can higher education institutions do to deal with the whipsaw effect of all the change and uncertainty, and transform into agile organizations that meet these challenges and thrive financially? Agility is defined as “having a quick resourceful and adaptable character, and the ready ability to move with quick easy grace.” Anaplan's Connected Planning software tools, models, and methodologies enable organizations to transform their planning and decision-making capabilities to utilize complex scenario planning from the smallest detail to the big picture, and allow financial managers to make decisions faster and with greater confidence.
McKinsey and Company, a global leader in consulting services, notes that one of the trademarks of agile organizations is “next-generation enabling technology." The Anaplan Connected Planning environment is the perfect example of a next-generation enabling technology because of its ability to work with real-time data and insights from across the institution and to allow all users to collaborate with accurate, updated information. It empowers financial managers to develop broad and varied scenarios, prepare rolling (not static) forecasts, update budgets automatically with relevant, current information, and do it all in real-time. One of the leading experts advising colleges and universities today on how to cope with the uncertainty around budgeting and resource allocation decisions calls for institutional financial managers to start by conducting scenario planning.
Anaplan provides the perfect suite of tools for the creation of multiple scenarios that use the exact same data and driver-based assumptions contained in the institution's budget and forecast models. Mitch Max, the founder of Anaplan partner BetterVu, has provided a detailed step-by-step set of instructions for this process that can be readily adopted by not only colleges and universities, but all organizations that use Anaplan to support the finance function and seek to become more agile organizations.
More About Higher Education:
Higher Education—Managing Forecasts in Uncertain Times
How Do You Help Your College or University Stay Ahead of the Curve?
Harnessing the Power of Anaplan
Anaplan partner firm, truED Consulting, specializes in financial planning and data analysis services for colleges and universities of all sizes and mission types (i.e., community college, private liberal arts, research university, multi-campus state system). Throughout 2020, we partnered with customers and Anaplan to offer a series of webinars to highlight how several of our customers have harnessed the power of Connected Planning to transform their finance function and take the first big step to become agile organizations that are prepared to navigate the uncertain financial waters of the future. Topics covered in the webinars included Responsibility Center Management financial modeling, integrated tuition modeling and financial planning, aligning strategy and resource allocation, transforming budgeting and planning, and “future-proofing” your university. One example was Saint Joseph’s University, which embarked on its Connected Planning journey to replace the static spreadsheets used in their distributed budgeting and planning processes with a cloud-based platform that integrates with its Banner Enterprise System and facilitates multiple real-time scenario modeling. This helped reduce administrative inefficiencies while increasing transparency and stakeholder accountability and engagement.
A New Way to Plan
A common theme amongst customers was the realization that financial planning using Excel spreadsheets had finally reached a point of diminishing returns. Although spreadsheets were one of the greatest personal productivity tools of the 20 th century, there were limitations to their capabilities that were often holding back higher educational institutions from achieving the integration and speed required to continuously evaluate their financial position and take decisive actions to change course. Anaplan software provides a far superior platform that does not suffer from common spreadsheet limitations such as multi-dimensionality, dynamic data update, collaboration, error auditing, and automation and workflow.
Colleges and universities not only need to manage revenue and expenses, but they also need to understand complex balance sheet ratios such as return on assets and employee productivity. Those institutions that have implemented the Anaplan software find it far easier to expand their analytical capabilities to include these and other key metrics of performance that help them to become agile organizations, ready to meet the challenges of the future.
Although it is desirable for any organization that implements Anaplan to create a Center of Excellence, it is only necessary to have a cadre of model builders and power users who can use the tools to build or manage a model that gathers and analyzes non-financial operating data. One example is the model developed by Anaplan partner firm Allitix and Tarleton State University to plan for and manage academic space. Armed with these analytical tools, Tarleton campus leaders can assess capacity constraints due to the incorporation of social distancing guidelines, as well as schedule classrooms to improve efficiency and reduce teaching costs.
Planning for Today and the Future
Another strategic use of Anaplan for colleges and universities is workforce planning for both the short-term (next semester) and the long-term. Salaries, wages, and benefits are usually the largest components of any higher education budget; therefore, it is imperative to have accurate projections to feed into the financial model. In the face of rapid change, campus leaders must make difficult decisions quickly but strategically. Anaplan can help ensure that CFOs and human resources departments are in complete alignment with one consistent set of shared data.
In a relatively short time, higher education has become an important and growing segment of Anaplan’s customer base. Even before the coronavirus pandemic, many educational institutions were beginning to feel the fragility of their business model in the face of demographic changes in U.S. society and ongoing questions about the value of higher education. As more colleges and universities continue to implement Connected Planning, their record of success in becoming agile organizations that thrive in uncertain times will be a beacon to others in the industry.
We'd love to hear from you about the challenges your business has faced over the last year. Leave a comment below!
... View more
Recent changes to all sectors of business and society in the U.S. have been swift and sometimes devastating. Colleges and universities, in particular, are experiencing a total collapse of their business models, rendering first quarter financial forecasts virtually useless. But institutions that use Anaplan Connected Planning software and models have the ability to quickly and easily adjust their budget and planning scenarios and to expand their Anaplan usage to departments and functions beyond the finance office.
Anaplan’s core strength lies in its capability to provide a unified cloud platform to create Connected Planning processes across an organization to make decisions better and faster. This is of significant value to higher education institutions that are comprised of very siloed functional departments like academic instruction, admissions, auxiliary services (campus housing and dining, bookstore, parking, etc.), treasury (endowment management and cash forecasting), development (communications and fundraising), research and athletics, which typically have different cost and revenue drivers and widely varying reporting requirements.
As an Anaplan partner with a sole focus on the higher education industry, truED Consulting provides institutions with the ability to build a unified budgeting and planning platform across the institution.
A current example is a branch campus of a large private research university that recently adopted Anaplan for budgeting and long-range planning. Anaplan provides the platform to not only meet the central budget office’s data submission and reporting needs, but also the capability to address needs at the local level by allowing unique requirements for performing driver-based planning, analysis, and reporting across all the academic and administrative units.
The university expanded their Anaplan budget and planning use by incorporating driver-based budget templates at the department level subsequent to the initial deployment. The university was able to enhance the model on their own through truED’s focused training and enablement provided during the implementation.
Departments across academic and administrative units manage, plan, and track their business differently. The University incorporated driver-based budget templates for units such as academic research, housing, faculty recruitment, information technology, etc. to allow units to not only budget dollar amounts, but to also calculate their output with metrics unique to their operation, in order to clearly demonstrate how their requested budgets are derived.
By tailoring the planning process specifically to how individual units conduct business, Anaplan adds value to the overall institution planning process and also leads to more satisfied and happy end users. In addition, it provides more transparency into unit-level budgets for the central budget office. Units desire to budget and plan based on how they think about their business, which varies across departments. And, the central budget office desires to have transparency into how units derive their budgets and what are the key drivers at the unit level. This helps institutions improve resource allocation and achieve their strategic goals.
More About Connected Planning:
Cutting Inventory Costs With Anaplan
Retail Planning: The Business Case for Anaplan
Transforming IT Project Planning for CIOs
The very existence of many colleges and universities has recently been in jeopardy. Students are being sent home while institutions try to figure out how to put all their instruction online, resulting in refunds for housing and dining services and uncertainty about tuition revenue from future enrollment, particularly from international students. The collapse of global equity markets has done major damage to the endowment portfolios of even the wealthiest institutions. And research revenue is slowing as all but essential work focused on health and life sciences is shut down.
Thus, it is more important than ever that the budgets and forecasts for all academic and administrative departments be in complete alignment when it comes to assumptions about how the future will unfold. This is the ultimate advantage of the Anaplan platform, enabling the central budget office to collaborate with all of the departments across the university to align objectives with individual operational tactics and financial plans.
Robert Knight, Higher Education Advisor at truED Consulting, has over 30 years’ experience in senior administration and finance roles at academic institutions in the US and Canada. Robert recently retired after serving as VP-Finance and Business Operations at the University of Northern British Columbia. At UNBC, Robert’s portfolio included finance and budget, human resources, facilities management, and information technology. Robert previously served as the principal administrative and financial officer for the Steinhardt School at New York University. He has also served as Assistant Vice Chancellor for Finance and Administration at the University of North Carolina at Chapel Hill; and Financial Planning and Budget Director at Oberlin College.
... View more
In an era of rapid change and disruption in higher education, how can you help your college or university stay ahead of the curve? For the past several years, if you work in a financial management role at a college or university, or if you’re a prospective student or the parent of a student, the news headlines have been pretty scary.
Students Outraged at News of Mount Ida College Closing.
University of Providence Announces Closure of 11 Programs.
University of Alaska Readies for Budget Slash: 'We May Likely Never Recover.'
These are but a few examples of the challenges facing even financially strong educational institutions and posing existential threats for financially struggling ones. And just this week, Moody’s Investor Services—the debt rating agency, pronounced the outlook for the entire higher education sector as negative for the second year in a row.
And there are other challenges to the financial viability of higher education institutions that are ongoing: e.g., demographic changes in the US population that are reducing the number of traditional college-aged students; public and media scrutiny of the value of a college education; state governments reducing grants to universities in order to deal with budget shortfalls and other priority investments; and tax-law proposals that could impact private philanthropic donations or levy a fee on university endowments.
So, What Can College and University Financial Managers Do to Prepare for These Challenges?
In the past few years, several dozen colleges and universities of vastly different sizes and varying missions (e.g., research-intensive institutions affiliated with major academic medical centers; medium or large multi-campus public universities; small private liberal arts colleges; and community colleges) have been enjoying the advantages of using the Anaplan cloud-native platform and leveraging the Connected Planning capability of Anaplan to better prepare for the rapid changes and disruptions that have forced the shrinking or closure or merger of a growing number of educational institutions.
As an Anaplan partner with a sole focus on the higher education industry, truED Consulting provides institutions with the ability to build a unified budgeting and planning platform across the institution.
truED assists its college and university clients in using Anaplan models to connect people, data, and plans across functional groups and processes (operational budgeting, long-range planning, institutional research, treasury, alumni and development, facilities, human resources, etc.) to produce a truly comprehensive process for faster data gathering and decision making. Our experience in specialized areas of university financial management—such as position budgeting, capital planning, enrollment modeling, responsibility center management, and academic program costing— complements our overall expertise across all budgeting, planning, and modeling solutions.
Anaplan Accelerators: Accelerate Your Anaplan Implementation by Leveraging Pre-built Budgeting and Planning Templates Based on Industry Best Practices and Proven Approaches
These accelerators are available not only for core budgeting and long-range planning functions, but also functions such as workforce planning, endowment modeling, enrollment, and tuition forecasting, and monitoring of liquidity and other key balance sheet and financial ratios. These accelerators help greatly reduce time to project completion and realization of faster return on investment.
Training and Enablement: One of the Key Differentiators of Anaplan from Other Technology Platforms and Consulting Firms
Anaplan partners with firms that have deep industry experience that can provide higher education customers a unique experience that includes hands-on training, mentorship, and knowledge transfer to enable the client team to be self-sufficient in using, maintaining, and enhancing the solution once they “go live” with their new Anaplan models.
Anaplan offers the most user-friendly interface in the market compared to competitors. This provides higher education customers fast adoption and ease of use while enhancing their ability to manage complex modeling and analysis.
Although the financial challenges facing higher education are daunting, we have now seen how some institutions have adopted the Anaplan Connected Planning philosophy and methodology to anticipate change and adversity and maintain financial stability. This is an invitation to the many thousands of other academic institutions who have yet to discover the power and versatility of Anaplan to get on board!
Robert Knight, truED Consulting Robert Knight, higher education advisor at truED Consulting, has over 30 years of experience in senior administration and finance roles at academic institutions in the U.S. and Canada. Robert recently retired after serving as vice president of finance and business operations at the University of Northern British Columbia (UNBC). At UNBC, Robert’s portfolio included finance and budget, human resources, facilities management, and information technology. Robert previously served as the principal administrative and financial officer for the Steinhardt School at New York University. He has also served as assistant vice chancellor for finance and administration at the University of North Carolina at Chapel Hill; and financial planning and budget director at Oberlin College.
... View more