Strategic finance encourages colleges to thoughtfully direct their resources to programs and activities that reflect their college mission, current market realities, and sustainable practices that support student success. It is a data-driven decision-making strategy that requires a better understanding of how financial and human resources are currently used, and how they can be reallocated to better serve students—in short, adopting a return on investment (ROI) perspective to spending.
Case study: University of Central Missouri
UCM has recreated its programs and services to align finance with mission and student success.
University of Central Missouri (UCM) has focused intently on the adoption of a strategic finance lens. These investments included: 1) administrative cost reductions; 2) academic portfolio review; 3) new institutional success metrics; and 4) a new resource allocation model. The entire project focused on aligning UCM behind one goal: increasing student success.
UCM’s shift toward strategic finance was launched in response to the changing external environment, particularly the likelihood of continued reductions in appropriations from the State of Missouri, combined with the state’s movement toward a performance-based funding model. In addition, university leadership recognized that the business model of higher education didn’t just need to be tweaked, but reinvented.
The adoption of a strategic finance lens ultimately linked three key initiatives:
- Academic portfolio review – This review resulted in a restructuring from five colleges down to four, and a reduction from 33 to 17 academic departments.
- Administrative cost and revenue enhancement – The project was structured as a Rapid Response Team model, under which a lead facilitators group coordinated the work of six teams working across all administrative service areas over just 90 days.
- Resource allocation model – UCM created a new model to ensure that resources would be linked to strategic initiatives and the support of institutional growth opportunities.
These academic and administrative cost savings yielded total savings at the university of approximately $8 million. UCM’s commitment to the strategic finance lens has also produced demonstrated student affordability and success outcomes:
- Students completing 30+ credit hours annually increased 12 percentage points
- Average hours to earn a bachelor’s degree declined 2.6%
- Tuition increases averaged only 1.5%
- 23% reduction in student loans
- 30% increase in institutional scholarships
Resources
Webinar — Pandemic Relief Funding: Using HEERF for Strategic Investments
Webinar PowerPoint Deck — Pandemic Relief Funding: Using HEERF for Strategic Investments
Report — Improving College Affordability with New Business Models
Article — The Bailout is Just the Start: Why Higher Ed Needs to Build a Sustainable Model
Model — Strategic Finance Dashboard
Model — ROI Toolkit
Leadership Insights — Strategic Finance Learning Studio with Rick Staisloff and Laura Casamento, President, Utica College
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“All of the work that I have partnered with rpk on fits the model of “strategic doing,” allowing faculty, staff and all aspects of the academe to engage in a new way of thinking about finance.”
Brian Noland, President, East Tennessee State University