University and college Finance teams are undergoing a transformation, evolving into strategic teams that play a crucial role in helping institutions maximize their business impact. Maximizing that impact requires access to better financial and operational data to give institutions better insights and facilitate more-informed decision-making. To address current limitations, Higher Education leaders are looking for solutions that will unleash the power of Finance by connecting planning processes and improving collaboration.
In this three-part blog series, we will highlight the hidden costs institutions must consider as they look to unify Finance and operational planning with Corporate Performance Management (CPM) technology –starting with ‘Toolkit Chaos’ in the first post of the series.
Many similar themes emerge from PWC and FSN survey data, but one especially stands out: Finance is still feeling the struggle. Most concerning, that struggle has persisted despite the significant gains over the past 20 years of Finance transformation from billions in investment (see Figure 1).
The surveys revealed the following:
Moving forward to address strategically how Finance can change, however, requires first understanding the root cause of the above challenges. That understanding is critical to ensuring a successful strategy.
When looking into institutions’ stories, time and time again, we see the same theme emerge: Fragmented solutions and processes are seen as the major source of pain for Finance teams. Why? These point solutions all need to be connected to align Finance with operations (see Figure 2).
Creating that alignment has been hard. After all, these point solutions have been the source of transformation for the past 20 years.
But in today’s environment – especially with the complexity, changing student needs, and need for quicker results – those disparate solutions no longer get the job done. Finance teams cannot be burdened with the technical debt, risk and complexity of stitching these processes together just to do the basics of reporting and planning. In addition, Finance cannot take steps forward to transform into the agile, partnership-focused institution it needs to be.
The aspiration of unifying connected plans to enable data-driven decision-making is top of mind for universities. However, to be set up for long-term success, Finance leaders must think differently to conquer the complexities inherent in fragmented point solutions and disconnected modeling toolkits for true institution-wide planning.
Many CPM modeling and planning toolkits – such as Anaplan, Workday, Board or Oracle Essbase – tout flexibility and speed for departmental planning needs. Yet these toolkits aren’t designed to unify connected planning processes across an institution.
Why? Because rather than leveraging a unified, extensible architecture, modeling toolkits rely on a series of individual planning models that must be “connected” together. And “connected” with actual results residing in other tools and models. Having disparate models come with a host of issues:
The reality is that far too much time is spent creating and maintaining these models — and they’re often misused. That misuse ultimately results in even more time spent fixing and compiling data.
When evaluating technology investments to unify connected planning, higher education Finance leaders must consider the common attributes and hidden costs of modeling toolkits:
While effective for different college or department needs – such as the School of Medicine, housing and dining, research, etc. – the pervasive use of modeling toolkits across an institution’s planning processes creates hidden costs that must be considered.
A scenario where an institution is looking to launch a new program offers a good use case example. This launch requires the Finance team to add the new program to the current Chart of Accounts (COA).
Regardless of complexity, this daunting task will require modeling toolkits – such as Anaplan, Essbase, Oracle Analytics Cloud (OAC), and IBM TM1 cubes – to be either partially or entirely rebuilt.
Doing so requires spending time to define and implement the new program throughout all Finance and operational plans and reports, which can include new data integrations, new COA, new calculations and new reports. The new program will also need to be accurately connected and accounted for in enrollment modeling, tuition and fee forecasting, position planning, capital planning, etc.
The university may gain some additional insights from implementing a connected planning solution using modeling toolkits, but there would be no reduction in technical debt. In fact, technical debt is more likely to increase and then get labeled as the cost of doing business.
How can institutions get past the toolkit chaos? The answer is simple: At OneStream, we call this Intelligent Finance (see Figure 3).
OneStream’s AI-enabled Intelligent Finance Platform provides the flexibility and control required to unify connected planning and reporting for colleges and universities. Powered with best-in-class financial intelligence, OneStream’s extensible design is purpose-built to enable FP&A teams to manage central Finance and Line of Business plans. In the process, the platform provides unparalleled flexibility and operational relevance for planning and modeling across the Operations, HR and Finance functions — all living together in a single solution.
Higher Education leaders can now leverage modern technology to rid themselves of legacy systems and processes while embracing the new trends prevalent in today’s market. Being informed on the hidden costs will help institutions find the right technology to support operational relevance and provide the flexibility required for Line of Business groups and Finance. In turn, institutions will be empowered with the controls and the governance required to evolve and scale – to continue the endless journey of unleashing the true value and potential of the Finance team and beyond.
Want to learn more about how OneStream can empower your organization? Visit our website.
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