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Four Tools Every Institution Should Consider
The content in this article is pulled from the 2022 Annual Higher Education Outlook. For more insights, download your complimentary copy of the 2022 Annual Higher Education Outlook today!
Four tools are useful when approaching the questions around arriving at and maintaining financial sustainability. These tools include:
- An interactive tool for analysis of academic program net revenues and costs
- An interactive tool for analysis of academic program markets
- An effective tool for benchmarking key areas of university financial status and trends; this would include internal and external benchmarking
- A comprehensive tool to model financial decisions
Academic Program Net Revenues & Costs
This tool needs to analyze net revenues and costs at both the department level and the program level. Schools discuss the advantages of being able to see section sizes and production on a class section level all the way up to the department, school, and campus level. Along with the ability to see specific academic program net revenues and costs, the impact of the general education core is also helpful. Projections of net revenues and future costs have also been found to be helpful.
Academic Program Markets
The tool for academic program markets needs to be comprehensive. There are numerous tools in the marketplace that focus on demand. Some focus on employment. But what has been found most helpful is a tool that can take those two areas of analysis (demand and employment) and join them to a competitive analysis and a view to see if the anticipated degree program is being offered at the right degree level (undergraduate or graduate). When all four of these factors are rolled up into one comprehensive scoring system, it is easy to rank the choices to enable smart decisions.
The Integrated Postsecondary Education Data System (IPEDS) and some university affinity groups have worked to provide benchmarking data to schools. An advantage is gained when that data is accessible interactively and multiple groups can be formed and saved to enable longitudinal analysis. This is especially helpful for the school with a small institutional research staff. Having this tool available with both financial and academic data is also very helpful.
Modeling Financial Decisions
Schools have expressed a need—especially now—to have a readily available tool that can quickly and easily project accounting data like balance sheets, statements of activities, cash flows, and ratios. Having the ability to insert both key initiatives (capital campaigns, borrowing, capital acquisition, or sale) and underlying assumptions related to revenue and expense drivers makes this type of tool invaluable, especially when it is not in a spreadsheet format where minor changes can break links and cause formula errors. A relational database for this type of tool seems to work best, as it is more reliable. When a tool like this can be viewed by multiple people on a web-based platform, it not only becomes a tool for analysis, but can also become a communication tool, especially if the results are produced in a visual format (instead of just columns and rows of numbers).
The following products available from BKD fit the previous descriptions:
BKD Program Economic Analysis
An affordable solution that helps institutions evaluate the financial contribution of each student, section, course, department program, or campus.
BKD Financial & Scenario Modeling
A dynamic, agile forecasting tool helping academic leaders visualize the institution’s financial future.
BKDpulse™ for Higher Education
A dynamic solution that synthesizes IPEDS data to help institution leaders compare performance and establish a competitive edge.
For more insights, download your complimentary copy of the 2022 Annual Higher Education Outlook today!
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