Higher education leaders faced with a complex and dynamic environment are looking to streamline Finance processes and get better data-driven insights. In that regard, institutions can take advantage of modern technology to rid themselves of legacy systems and processes that leverage the new trends prevalent in today’s market. Financial Planning & Analysis (FP&A) leaders looking to break the planning and reporting silos should consider not only what risks and opportunities come with different solutions, but also how to maximize business impact.
In the previous blog in our “Higher Ed: Unify Connected Planning or Face the Hidden Costs” blog series, we discussed how the concept of connected planning processes into one seamless, integrated solution is top of mind for Finance leaders to avoid the toolkit chaos widely felt today.
For the second part of the series, we’ll explore the administrative burden teams face when unifying planning and reporting.
Many teams have turned to the concept of connected planning to alleviate institutional pressure and increase agility. And it’s easy to see why: Connected planning promises that “connecting” people with data, management reporting and plans allows “connected Finance teams” to move forward with speed and agility. As a result, the entire university can better establish strategic goals and deliver new transformative value (see Figure 1).
Unfortunately, despite the clear benefits above, many institutions still struggle to unify connected planning processes even alongside significant investments in “connected” corporate performance management (CPM) technologies. But why?
While institutions recognize the importance of integrated CPM data, many fail to break down the silos created from on-premises and cloud modeling toolkits. Those silos then often result in a disconnected experience for Finance and Operations teams. Modeling toolkits might look like sensible and economical options for sharing and collaborating on key plans and/or managing processes, but these solutions come with costs (see Figure 2). Each line in Figure 2 represents integration costs and risk.
The potential administrative costs when leveraging modeling toolkits to unify planning processes can emerge for three key reasons.
Over the past few years, modeling toolkits have offered a way for higher-ed Finance teams to evolve from manual processes. Yet large, complex institutions with many diverse planning processes stitched together via modeling toolkits experience short-term gains that typically lead to near-term losses due to lack of scale.
Modeling toolkit solutions are still siloed, however, fragmented systems still exist no matter how much effort is applied to stitch them together into one cohesive ecosystem. And with no ability to scale, modeling toolkits will only amplify data management costs. Why?
Connected but non-unified Finance solutions require fragmented cubes, modules and sometimes software to support diverse planning processes and offer limited insights from the core focus of the solutions. What does that mean?
Tremendous effort is required to connect and validate adding or removing a program to each planning process (e.g., enrollment modeling, position planning, grant management, etc.) and the reporting system being used across the institution. Ensuring each cube, model or Excel sheet has the information feeding at the right level of detail with enough information to do accurate planning is tedious. And this grows exponentially with more campuses or schools using separate models. This data management process and validation is a heavy administrative burden.
Most Finance leaders will agree that effectively achieving financial sustainability while fulfilling the university mission and strategic initiatives is paramount for institutions.
Then why do so many leaders forfeit effectiveness to focus on increasing efficiencies? The concept of efficiency is more tangible than effectiveness – efficiency produces immediate results. After all, doing more with less to achieve the same result is ingrained in leaders’ DNA and can be quickly realized via making staff reductions or streamlining established processes. Yet the resulting efficiency gains still rarely increase effective outputs. Why? All that “efficient work” could be pointed at inaccurate data, giving results that have little value to the business. Such results will ultimately increase costs across the institution as teams track down the correct information. Sounds familiar, doesn’t it?
Non-unified “connected” planning solutions add technical complexity and administrative burdens on the Finance team – such as moving and reconciling data, constantly managing meta-data, monitoring data latency, and managing security between applications AND models. Collectively, these burdens dilute the ability of strategic Finance teams to focus on driving performance and supporting critical decision-making.
Due to the large assortment of services and processes within universities and colleges, Finance teams often struggle to create monthly, quarterly, and annual plans and forecasts. Why? Because every department, school, and campus application or model must be connected – adding risk, cost and complexity to an already taxed team.
Most modeling toolkits provide no pre-built financial intelligence. What does that mean? It means all the core “financial logic” for monthly financial processes – such as debit/credit account types, hierarchies and dimensionality – must be built completely from scratch. Doing so exposes the organization to risks and extra costs. Therefore, these simple breakdowns can lead to costly mistakes for institutions.
Higher education leaders now have the opportunity to leverage modern technology to rid themselves of legacy systems and processes while embracing the new trends prevalent in today’s market. When looking to unify financial and operational planning, Finance teams must keep in mind the important risks and opportunities: focusing on long-term scalability, supporting efficiency AND effectiveness, and reducing organizational risk.
Want to learn more about how OneStream can unify planning and help leaders today avoid extra costs? Visit our website.Learn More