Online learning is on the verge of besting the traditional classroom. While it’s easy to assume this is predominantly due to student interest after the pandemic, college and university finance leaders are also big fans thanks to its cost savings. A new survey by BDO, a financial consulting firm, found that two-thirds (62%) of respondents are increasing tech spending in the next 12 months primarily to lean out operating costs and grow their revenue streams.
Fielded by Rabin Research Company, the survey captured responses from 50 higher education leaders who primarily self-identified as chief financial officers and directors of finance. Fifty percent operate institutions with assets exceeding $200 million. The rate of finance leaders reporting that their institutions are increasing tech spending is higher than 59% of the other 200 nonprofit organizations Rabin measured.
“In the years to come, the world of higher education will continue to transform—and colleges and universities should embrace change to build resilience for the future. This includes investing in technologies that can improve efficiency and internal visibility,” wrote the report’s authors Adam Cole and Andrea Espinola Wilson.
How tech can streamline operations amid soaring costs, inflation
Increasing student enrollment is not as big of a priority this year as it was in 2022. Respondents are now mostly focused on reengaging students who previously stopped out, especially those who quit during the pandemic, the report suggests. Preliminary data from the National Student Clearinghouse points to this cohort as a prime reason why undergraduate enrollment grew for the first time post-pandemic.
With enrollment a lower priority this year, finance leaders identified growing economic uncertainty and budgetary constraints as two of their three key challenges. With heightening inflation hurting consumers’ purchasing power, leaders are looking for innovative ways to increase their revenue and cut overhead costs.
The most popular route colleges have taken to reduce costs and increase revenue in the past 12 months was moving more classes online (64%) and investing in technology to streamline operations (62%). The report outlines how new technologies can help streamline redundant tasks, like reviewing transcripts and implementing AI chatbots that can help students with questions on financial aid, class registration and other general requests.
Other less popular routes colleges have recently taken to avoid falling in the red, like reducing faculty or academic programs, have garnered equally unpopular reactions from the community.
Improving faculty retention through flexible work conditions
Colleges and universities were able to incentivize their faculty to work through the haze of the pandemic by offering raises thanks in part to HEERF funding. But with emergency aid all but gone, finance leaders identified a new primary set of strategies they’re using to retain employees. Chief among them is updating their remote work policy and flexible work hours. These findings correlate with CUPA-HR’s report that identified remote work opportunities as a non-compensation-based strategy to help alleviate faculty turnover.
As more colleges move toward in-demand hybrid and remote work environments, 52% of respondents said they plan to select or implement a new enterprise resource planning (ERP) software in the next 12 months. New ERP systems will improve automation, allow cloud-based system migration and mobile application use and, of course, be priced at a better value, according to the survey.
More tech, more security
As institutions become more integrated with technology, so does the threat of bad actors. Almost all (96%) respondents said they are either “somewhat” or “very” concerned about cyberattacks. Consequently, 64% said their institution is investing in technology to prevent an attack.
Improving your institution’s cybersecurity is a cost-saving strategy within itself. Cybersecurity breaches can cost your institution millions of dollars on average. Moreover, the ransomware syndicate responsible for the MOVEit Transfer security breach is expected to make over $75 million from their extortion tactics.