Fiscal resiliency in higher education: leveraging digital transformation tools to drive innovation

This blog summarizes key takeaways from our fiscal resiliency podcast series, episode five.

Today’s higher education landscape presents an opportunity for college and university leaders to examine strategy and ensure alignment with the mission, position resources to enhance student success and respond to the current  environment which challenges institutional sustainability. Pertaining to fiscal resiliency, many higher education institutions are currently focused on improving forecasting and long-term planning approaches, particularly to help them address issues such as affordability, enrollment and federal and state funding. The concept of holistic and multi-year forecasting has certainly evolved, and the approaches and technology used by institutions to help ensure fiscal resiliency has not kept up. Also, sometimes mindsets about the best approach and what the data is clearly saying need a refresh.

Financial  planning historically has used basic database tools and knowledge, such as Excel, to provide an annual glance at future budget needs and sometimes may have allowed for rudimentary scenario analysis. The approaches to financial modeling, multi-year forecasting and scenario-based planning  have evolved significantly to offer more sophisticated tools and analytical options in understanding fiscal and institutional performance drivers. Technology and the  availability of integrated modeling and analysis tools for institutions have improved. Financial and operational planning has become a process that involves  constant monitoring and evaluation throughout the fiscal year and across multiple periods of time.

Standing still is no longer an option

The amount of valuable data and  digitally based analytical tools  available to colleges and universities makes it nearly impossible to “stand still.” The importance of involving a diverse segment of leaders to analyze data and engage in digital transformation discussions and decisions cannot be understated. While Baker Tilly can work alongside institutions to develop the proper tools, it is up to the leaders and institutional stakeholders to implement these tools and communicate effectively. Financial models and scenarios are meaningless if they are not placed in the hands of people who know how to develop and take strategic actions, and who will monitor and refine them to maximize their potential.

Moral of this story: institutions should digitally transform, leverage state-of-the-art forecasting tools and most importantly, be prepared to act on the informed results. Evaluating change drivers may lead to previously unknown information that frames critical analysis and helps support strategic decision making. The truly difficult part is still left to leadership: making the decisions that will mold the institution for years to come.

Key digital transformation considerations for colleges and universities

For institutions looking to automate modeling as part of a switch to a modern, cloud-based tool, our first piece of advice is simple: expect better fiscal outcomes.

Don’t automate for the sake of automation. It’s not just about efficiency. It’s also about effectiveness. This means new ideas, new outcomes and yes, even new challenges. Those who embark on the digital transformation journey will encounter some bumps along the path to understanding the key decisions for fiscal resiliency. However, the true return on investment comes from the effectiveness of the tool that provides the basis for innovation and strategic change.

How the right tool can support fiscal resiliency

Baker Tilly collaborated with Oracle to develop a fiscal resiliency solution for higher education institutions. Our tool allows institutions to examine their short-term focus on cash and liquidity while simultaneously creating financial models to assist with more significant, long-term changes. It provides a comprehensive cost and revenue analysis of potential changes that an institution must consider. Using those drivers and performance indicators as a foundation, we then incorporate “what-if” scenarios and use the financial reports to look at the impact on the institutions in a variety of key areas.

Simply stated, the tool examines the relationship between variables and how pushing on one variable affects the others (both in the short- and long-term) to help project what will actually occur at the institution.

The solution’s objective is to break down barriers of the past and unleash a new way of thinking. That means new sources of data, new thought processes, new opportunities and new ways to grow the institution in a fiscally responsible way. These changes in strategic thinking and financial modeling are not easy to achieve and not simple to act on, but they are critical.

Baker Tilly can help

At Baker Tilly, we have tomorrow’s discussions today. We work alongside institutions to achieve fiscal resiliency. We collaborate with leaders and boards to create a bond between strategic drivers and fiscal resiliency under the powerful umbrella of technology.

As we work together, we will learn what level of functionality makes sense for each institution. In turn, we can design scenarios, reports and dashboards tailored specifically to the institution’s needs, goals and mission. This will result in effective and efficient decision-making that will have a sustainable impact.

Connect with us to discuss ways we can help your college or university make strategic changes to support fiscal resiliency with digital transformation.