To meet some of the challenges facing higher education and ensure a sustainable business model, leaders at Tufts University in Massachusetts created a strategic initiative for finding ways to contain costs—without making across-the-board budget cuts—and to simplify and streamline business processes.
The result: Modernizing efforts have saved millions of dollars annually, improved financial transparency across the institution, and automated budgeting and financial planning processes.
In this web seminar, presenters discussed key strategies and crucial best practices that any college or university can apply when transitioning to a sustainable business model for the future.
Senior Solutions Engineer
Director of Budget Services
Tufts University (Mass.)
Senior Budget Systems Analyst
Tufts University (Mass.)
Stewart Clark: Last fall, Kaufman Hall and University Business surveyed 250 college and university business officers. One of the key takeaways was that there’s a crisis of confidence around the business model in higher education.
We asked the respondents if they thought their institution’s business model would be sustainable over the next five to 10 years. Of the finance professionals who responded, 66% expressed concern about the viability of their business model. That was a 19 point increase over the prior year. Not only are the vast majority of these finance professionals seeing major problems, but we are also seeing that business model viability is trending in the wrong direction.
It’s likely that structural changes will be required to rectify the issue. But when we asked respondents if they thought their institution could quickly adjust strategies, only one-third were very confident that their institution could. And about one-third of finance professionals were not confident at all.
The final key highlight from the survey focused on the types of challenges these colleges and universities are facing. Lack of financial resources led the way by a large margin—51%. In order to address that lack of financial resources, you need to have clearer data and a better vision and strategy.
Salvatore Tripoli: Resource pressures prompted Tufts to make a change in how we were handling administrative and planning functions. Declining federal funding support, grants and sponsored awards, and the economic downturn affected our endowment support and hindered our ability to generate new revenue sources outside of tuition and traditional programs.
“We approached efficiency and our goals in two parts, which are two sides of the same coin: change management on the process side with reorganizing the budget center and also on the systems side.”
Through reorganization and process improvement, we wanted to achieve several goals—including aligning the university’s financial and administrative processes for efficiency and producing a uniform, accurate and transparent budget that could be shown to our trustees and school leaders.
The goal of our TEAM initiative—Tuft’s Effectiveness and Administrative Management—is to provide service at a lower cost. We wanted to reduce the time that our staff and faculty had to spend on paperwork and administrative burdens, and to enable them to focus on their core jobs.
Brian Cody: We approached efficiency and our goals in two parts, which are two sides of the same coin: change management on the process side with reorganizing the budget center and also on the systems side. A lot of how we organized the budget center was around the system, and a lot of what we designed the system to do was around our processes and our efficiency goals.
We have one consistent format. This is one system universitywide where the budget center interprets the programmatic conversations and records them in a uniform way that can be discussed or referenced later. That fit in with the finance and accounting items that we needed, and it let us plan further out. Through this new tool, we can manage costs and gain insight. We’re tracking charges at a fairly broad level—travel, salaries, meeting expenses, and such—and we did this in increments.
Once we had that piece working, we moved on to the next stage: labor planning. We’re able to plan individual positions and employees, and can track merit and departures and hires. We can see all of this in relatively real time and project the impact on the operating statement. All of that enabled us to do our next module: grant planning.
Salvatore Tripoli: The design phase lasted several years, but the project won’t end when the technical build is finished. We see ourselves as being able to increase our services and increase our output by looking at our work as project-based from one deadline to the next.
Brian Cody: We feel that we’ve gotten to a very good spot for efficiency with our operating budget, grants and labor planning. Now, we’re looking to focus more attention on strategic insight. We want to look longer term.
To watch this web seminar in its entirety, please visit UBmag.me/ws062719