A four-year private institution in the Northeast offers multiple educational opportunities, including undergraduate, graduate, summer and online degree programs both in the U.S. and internationally. In the early 2000s, the school expanded its programs by offering its curriculum from anywhere in the world online. Five years ago, the school further expanded when it merged with another educational institution in the northeast, making it the largest independent college in its specialty.
The Challenge
With the institution’s expansion and several schools running different programs across multiple campuses, resource deployment and financial tracking of costs and revenue became increasingly difficult, as many allocations were centralized under the original institution. At the time, the Senior Vice President for Finance and Administration knew that the institution needed to change the financial framework to effectively manage the operations, finance and administration of the institution. To effectively budget and continue to reach its strategic goals, further insight was needed into the cost (both direct and indirect) and generated revenue of each of the institution’s programs. Equally important was achieving an understanding of how and where resources were being allocated. The institution enlisted the help of Cherry Bekaert Digital Advisory to create a cost and revenue model to accomplish the following objectives:
- Long-term alignment of resource deployment with strategic priorities.
- Improved understanding of the cost and revenue associated with the institution’s offerings for students to support optimized resource deployment.
- Improved decision making for new initiatives through better understanding of the entire cost and revenue picture.
- Improved reporting across the institution at both the leadership and operational levels.
The Process
Cherry Bekaert Digital Advisory began the initiative by looking at the institution’s various data sets. The data sets analyzed included student, financial, facilities, timetable/schedule, human resources and student billing. While the institution had a significant amount of valuable data, some of the data sets were housed in different systems with each system capturing the same information but in different ways. Cherry Bekaert Digital Advisory needed to first normalize the data to reduce data redundancy and improve data integrity.
Once the data was normalized, the information was then pulled into a cost model utilizing the Pilbara Insights software. Pilbara Insights is a cost modeling SaaS software that uses data to empower higher education institutions with financial analysis for executive decision making. Leveraging the software allowed the team to stitch together pieces of information and build business rules about how to allocate costs to each of the different programs and courses. “The institution is now able to see their analytics in powerful dashboards, enabling them to be more data driven in their real-time decision making,” said Anthony Pember, project lead for Cherry Bekaert Digital Advisory.
The final model enabled the institution to see the cost of a course, the cost of a program and the revenue associated with all courses and programs. The model also includes the ability to drill down both direct and indirect costs, as well as facilities usage by campus. Deeper perspective into programs by revenue was gained with the ability to look at all costs associated with a particular program by campus. The financial team at the institution is now able to analyze if resources are being allocated effectively based on revenue and mission imperatives, and adjust accordingly. The model has also enabled the team to update their budget process, defining new business rules around allocation amounts and facilitating the tracking of indirect costs during the year of execution to understand the differences in program performance across campuses.
Due to multiple student billing systems, staff spent a significant number of manual hours each month reconciling the data in the student billing systems with the revenue reported in the centralized general ledger. Given the data already collected to support the cost and revenue model, the institution asked the Cherry Bekaert Digital Advisory team to create an automated solution to address the labor-intensive reconciliation process. Cherry Bekaert Digital Advisory built a billing reconciliation model to automate analysis. Rather than spending manual hours on monthly analysis and reconciliation, the financial team can now load the data into the model and find out where there may be a breakage between the student billing and general ledger systems within minutes to address in real time.
The institution is now equipped with two valuable models that deliver timely, transparent and accurate data enabling the institution to make informed data-driven decisions, driving value for the school, its students and the greater community.
About Cherry Bekaert Digital Advisory
Cherry Bekaert’s Digital Advisory team is comprised of strategists who have broad industry experience and keen business acumen. Utilizing an agile and flexible approach, we help examine what you want to achieve with a focus on people, process, technology and culture. We are here to help organizations manage risks, enable growth and support sustainable operations. Leveraging our strategic process, we help digitally enabled organizations – especially middle-market companies – do more with less. Cherry Bekaert stays on top of the latest technology trends, but we know that technology is not a one-size-fits-all solution. Cherry Bekaert is here to guide you on what technology makes sense to adopt as it pertains to delivering the highest value to your organization.
