Higher education institutions have faced increasing financial pressures for years. Some have also faced the formidable challenge of measuring the effectiveness and financial health of their academic programs and initiatives—What is spent and who spends it? Which programs are subsidizing others? What revenue is earned for which purpose? Is there duplication across the system? How effectively is facility space being utilized? Which programs provide deep value, and how is this measured? What gets produced and delivered? Most institution’s CFOs scramble to get data to support the economic analysis of the scenarios they want to evaluate.
Analytics Model Success Story
The state’s higher education system, comprised of over 15 public community college and university campuses, found itself at a crossroads, confronting the critical need to align its extensive data with the overarching strategic mission of the institution. Institutional leadership wanted to gain insight and analysis into the revenue/cost/margin dynamics previously unavailable.
Recognizing that without a nuanced understanding of their operations’ cost drivers and revenue generators, they could not make informed decisions. System leadership then embarked on an ambitious journey to establish a robust cost and revenue analytics program. The goal was not just to gather data, but to distill it into actionable insights that could transform how the higher education system “does business,” creating a once-in-a-lifetime opportunity to leverage robust analysis in support of strategic initiatives that could change the face of higher education.
The challenge was multifaceted: the system needed to integrate disparate financial and operational data to evaluate program performance accurately, determine the most revenue-generating initiatives, allocate resources efficiently, and support strategic decision-making. Furthermore, the system needed the ability to benchmark its course, program, and academic department performance across its institutions, fostering continuous improvement and competitive growth.
Several years ago, the system took its first steps with the development of a community college model. As the multiple community colleges within the system were transitioning to a unified “single campus” college, the model needed to account for current structures while also planning for the future state. By integrating data across multiple campuses and programs, the model provided the system with a clear view of financial operations, enabling leadership to compare the profitability of various courses and programs and understand the impact of each type of offering.
Additionally, the system model offered a detailed analysis of revenue streams, allowing for a granular understanding of financial flows and aiding in the advocacy for sustained state funding. The insights gleaned from this model empowered the system to advocate for appropriate funding levels and utilize those funds most effectively.
Following the success at the community college level, the system sought to replicate this model across its multiple four-year university campuses. The objective remained consistent: to create a scalable, adaptable, and comprehensive analytics framework that would enable data-informed decisions across the entire system’s network of university and community college campuses.
This system-level solution was developed on one central platform but comprised of the individual university and community college models. The development of multiple models in one overarching system allowed for a more efficient end-to-end implementation process.
Some of the lessons learned and beneficial outcomes:
- Analytics are only as good as the data they come from. The system was able to identify gaps in their own data (e.g., a professor listed in course scheduling data, but not payroll data) and clean up their reporting.
- They learned what and how to measure, and what kind of custom reporting provided the most valuable insights—and could then make better, more data-driven decisions.
- They were able to establish consistency across the system, centralizing and unifying how costs and revenue get recorded, allocated and analyzed.
- They were able to identify trends and discover smart ways to reallocate resources.
- They could hone in on what key performance indicators (KPIs) mattered the most for each “bucket” of data, which enabled them to understand where real value lies (and that it’s not just about the money).
- They were able to validate that what they believed was going on was generally true—but also discover (sometimes-shocking) gaps in their perspectives or preconceptions.
- They were better able to understand the economics of their institutions and the impact of key decisions.
- They were able to benchmark offerings across institutions (using a singular reporting cube).
- The use of web-based dynamic reporting capabilities, available through dashboarding, provided consistent reporting and facilitated analysis opportunities across a wide range of institutional stakeholders.
For both the community college and university models, the system leveraged Pilbara Insights cost modeling software. For nearly 20 years, Pilbara’s SaaS software has been used to build cost models from granular institutional data to empower colleges and universities in Australia, the U.S. and Canada with the financial visibility and analysis needed for rapid, executive decision-making.
The system’s story is a testament to the power of strategic data analytics, particularly cost and revenue analytics, in higher education. By addressing the intrinsic business challenges of measuring program effectiveness and financial viability, the system has set a precedent for other systems and institutions striving to navigate the complexities of modern higher education. The system case study is not just a success story; it’s a blueprint for change, demonstrating how institutions can harness data to serve their students, faculty and the future of education.
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