Do you have the right financial planning priorities for 2020?
Most colleges and university budget and finance professionals agree the ideal budget length is about 3-4 months. Yet, higher education budget cycles are getting longer and longer.
The third annual edition of the Higher Education Financial Trends Report: Priorities, Challenges, and Insights to Get Ahead in 2020 (previously called the Performance Management Trends and Priorities in Higher Education report) provides insights on key performance benchmarks, plans, and challenges facing higher education budget and finance professionals.
When surveyed on how long their typical budget cycle takes from initial rollout to board presentation, 43% of respondents said it took longer than 6 months. Compare this to 2019 where 38% of finance and budget professionals said it took longer than 6 months. In 2018, that number was only 34%.
"When you do a budget in November, and it goes into effect in July, it's already more than six months out of date and you can't adapt it to change or react to current needs," said Jim Dobbertin, Assistant Controller and Financial Systems and Support Operations at the University of Rochester.
Is your college or university able to adapt?
Less than 15% of higher education institutions are very confident in their team's agility to respond as needs change. Access to up-to-date data is crucial for decision-making and performance improvement, but:
- 74% of respondents said they struggle to pull data from multiple sources into a single report
- 63% struggle to use dashboards and visualizations
- 55% struggle to deliver meaningful ad-hoc reporting for end-users
- 55% struggle to access clean, consistent, and trusted data
- 53% struggle to create reports easily
Are higher education institutions lagging?
76% of our respondents believe higher education lags behind other industries in terms of adopting modern financial planning tools and practices. In the same vein, 40% of them don't believe their current business model is sustainable over the next 5-10 years.
"If we can't progress from doing things like we always did in the 1980s because that's how it has always been done, then we're never going to be efficient or be able to best support our students and our faculty in the way that we should," said Kimberly Bregenzer, CFO at Dornsife College of Letters, Arts & Sciences at the University of Southern California.
What are your plans for improvement?
We asked budget and finance professionals what their top improvement initiatives were for 2020 and they said:
- Operational budgeting and forecasting
- Reporting and analysis
- Long-range financial planning
- Capital planning and tracking
Learn how your institution can improve
Check out our report for actionable information on what might be holding you back and adapting to meet higher ed challenges.