Colleges and universities are overhauling campus operations in several ways as they confront financial strains driven by enrollment disruptions and today’s other challenges, a new analysis by the accounting giant BDO finds.
Strategic partnerships, increased investment in technology and operational consolidations lead a sector-wide push for greater efficiency and innovation, according to BDO’s Higher Education Snapshot survey of 50 campus leaders.
Nearly half of the leaders surveyed cited budget constraints and the rising cost of education as their No. 1 concern. Implementing new technology and change management was the next biggest challenge.
Still, 50% of the institutions recorded revenue increases of 10% to 25% during the most recent fiscal year. Only 4% reported a decrease. Most respondents expect some level of increase in the next fiscal year.
To reduce expenses, a large majority of the leaders are eyeing strategic partnerships with for-profit or nonprofit organizations in the coming year. This includes, for example, turning bookstores or cafeterias over to private companies, and public-private partnerships with utility companies to provide power in exchange for usage credits.
Partnerships with industries hungry for qualified employees are bolstering career-focused programs on campus, BDO notes. Technology companies can enhance computer science and IT courses while healthcare companies help colleges establish pharmacy and biomedical programs.
BDO highlighted two components of successful partnerships:
- Define the scope: Clearly define the partnership’s purpose, desired outcomes and legal structure. Be explicit about the length of the partnership, financial capacity and specific roles and responsibilities, including financial contributions.
- Align with the mission: Assess how a partnership will strengthen the institution’s core mission and student outcomes.
In other cost-cutting efforts, one-third of the leaders surveyed said they have explored mergers or acquisitions within the last 12 months.
Campus operations get a tech boost
When it comes to spending, leaders are laser-focused on updating aging technology systems across classrooms, administrative offices and elsewhere. The top three goals are to improve: delivery of programs and services; operational efficiency; and reporting transparency and compliance, the survey found.
Navigating policy shifts
Most of the leaders surveyed said they and their institutions can handle federal policy shifts as higher ed remains a focus of the Trump administration. Here’s how those leaders have responded so far:
- Consolidated operations: 52%
- Adjusted strategic plans: 48%
- Reprioritized programs: 48%
- Sought alternative funding sources: 40%
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