A Roadmap for the Future

5 minute
Graduation cap on top of books

Sustaining Higher Ed is a monthly blog dedicated to helping college administrators and board trustees lead their organizations toward greater financial stability so they can stay on mission during challenging times.

In a series we began last December, we have been exploring the strategic options available to a mid-sized regional university facing several financial challenges. As leadership nears the end of its strategic options assessment, its final area of focus is a 5% reduction in administrative costs, a commitment it made to the university’s faculty council in a proposal to eliminate several academic programs.

Assessing administrative cost reduction options

Leadership realizes it will need to make staff reductions but hopes to accomplish some of that through attrition. It also sees an opportunity to increase the efficiency of processes in its administrative units. Working with its consultants, leadership has identified the following opportunities to achieve its cost-reduction goal:

  • Pursue opportunities to automate repetitive, high-volume processes in the registrar’s office, student accounts, human resources, and business and finance. Leadership has established a five-year plan to reduce positions through attrition as automation reduces staffing needs; at the same time, automation will allow remaining staff to redirect focus on repetitive processes and more on higher-level responsibilities and strategic initiatives.
  • Outsource IT functions to reduce staff within IT and to provide access to state-of-the-art technologies and capabilities.
  • Renegotiate vendor contracts in such areas as food services and laundry.
  • Redesign purchasing card processes to capture potentially higher rebates and maximize float interest within the accounts payable function.
  • Review the university’s real estate portfolio to identify unnecessarily leased space or opportunities for lease restructuring and asset monetization.

In addition to consulting fees, leadership will also need to invest in robotic process automation (RPA) technology to achieve its cost reduction goals. But even with these costs figured in, financial modeling indicates that the opportunities leadership has identified will result in a 6% to 8% reduction in administrative costs over a five-year period, providing a small buffer to leadership’s commitment to a 5% reduction.

A roadmap to sustainability

Leadership now has a full slate of strategic options, and its plans have been boosted by some early successes:

  • The faculty council approved leadership’s proposal to close the law school and some underperforming programs within the college of liberal arts.
  • The university quickly negotiated a sale of the law school building to the state university system and will be using the proceeds from the sale to help fund the technology infrastructure update needed to pursue its program expansion strategy.
  • The RFP for development of new athletic facilities that the university issued in partnership with the city was successful in identifying a third-party developer for the project. The university will provide a long-term ground lease for the underlying real estate; the developer will own the facilities and receive rental payments from the university and city for their use.
  • The university received a significant, unrestricted gift from two alumni who met at the university and subsequently founded a successful local company. The university plans to announce the gift at the launch of its capital campaign to build momentum.

A summary description of the various strategic options leadership has decided to pursue is provided in Figure 1.

Figure 1: Summary of Strategic Options Leadership Will Pursue


Actions Pursued

Investment Required

Intended Impact

Time Needed to Implement

Program Expansion

· Online MBA

· Certificate program for mid-career professionals

· Workforce development program

· Major investment needed to update technology infrastructure

· Increased enrollment by non-traditional students

· Revenue diversification

· Anticipate 3 – 5 years before realizing positive return


· Degree pipeline partnership with local community colleges

· Partnership with city and third-party developer for athletic facilities redevelopment

· Marketing costs for degree pipeline program

· Rental fees for new facilities (owned by developer)

· Increased enrollment in liberal arts programs

· Reduce capital expenditures on new athletic facilities

· Increase university’s appeal to prospective students

· 2 – 3 years for degree pipeline program

· Up to 3 years for construction of new athletic facilities

Closure of Underperforming Programs

· Close law school

· Eliminate German, Italian, and Japanese programs; combine remaining language departments into single modern languages department

· Eliminate Latin and Greek majors; retain minor

· Eliminate religious studies major

· Minimal

· Reduce administrative and faculty expenses

· Improve university’s operating margin

· 2 – 3 years to “teach out” students in eliminated liberal arts majors

· End of academic year for law school (students and tenured faculty transfer to state university law school)

Monetize Assets

· Sale of law school building to state university

· Concession arrangement with third-party operator for downtown parking structure

· Real estate advisor and transaction fees

· One-time capital infusion from law school building sale

· Revenue diversification through parking structure concession

· Minimal

Administrative Cost Reduction

· Real estate review for lease reductions/ restructuring

· Renegotiation of vendor contracts

· Purchasing card process redesign

· Automation of functions within administrative units

· Outsourcing IT roles

· Investment in automation technology

· Consultant fees

· Cost reductions

· Increased efficiency

· Savings opportunities

· Up to 5 years to achieve attrition goals


· Capital campaign

· Marketing costs

· New FTE in development department

· Fund construction of new student union and boost endowment

· 3-year campaign with cash received over 5 years

Leadership has acted before the university’s financial challenges became a financial emergency: With its assessment of strategic options complete, leadership now has a roadmap to help put the institution on a more stable financial footing. Keeping the institution on track in its pursuit of these strategies will now be leadership’s most important responsibility. Its next task will be to establish metrics and monitoring systems to make sure that the initial momentum does not stall and early gains are not undone.

We have enjoyed the opportunity to explore the strategic options available to this institution with you over the past few months and welcome any thoughts or questions you have. Next month, Ken Kaufman—Kaufman Hall’s Chair and one its founding partners—will join us on this blog with his observations on the challenges that face higher education coming out of the pandemic.

Larenda Mielke
Larenda Mielke is a Senior Vice President in the Higher Education division of Kaufman Hall’s Strategic and Financial Planning practice. She has extensive leadership experience in higher education in the areas of strategy, curriculum and program development, and more.
Jason Sussman has provided planning and financial advisory services for healthcare providers and higher education institutions nationwide for more than 35 years. He is a leader in Kaufman Hall’s Strategic and Financial Planning practice.
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