Higher Education needs digital financial planning and analysis tools to build a resilient future
Higher education and the public sector are still recovering from recent disruption, highlighting the need for improved financial planning and analysis processes thanks to the digitalization of systems.
One survey found that 47% of higher education organizations said financial health and operational planning is what they most need support with. In addition, the higher education sector has new trends that finance departments must manage and plan for to remain resilient.
Advanced financial planning processes are needed to learn from past disruptions, navigate today’s uncertainty and change, and remain compliant and well-positioned for future growth.
Keep reading to learn more about the future of financial planning in the higher education sector.
Why Higher Education needs simplified financial planning
While digital transformation is an increasing priority for Higher Education leaders, many are still using legacy systems like Excel that prevent an obstacle to the strategic thinking and financial planning they need to effectively navigate change.
According to a study by Inside Higher Ed, 89% of institutional leaders they spoke to have deep concerns about their institutions' financial stability. While past disruptions may have settled, organizations must understand disruptions will come again in the future.
Yet, with advanced financial planning and analysis tools, as part of a digital ERP suite, higher education can develop a strategy that means even when the unpredictable occurs, they are prepared.
Moreover, with increasing competition from remote learning institutions, reduced interest in degree-level study, and spiraling tuition fees, the higher education sector must ensure their finances are being used intelligently.
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What trends should higher education prepare for?
Notably, Environmental, Social, and Governance (ESG) reporting compliance is of increased importance across nearly all organizations, but also in Higher Education. The EY-Parthenon team found that 75% of 176 institutions they surveyed indicate that environmental sustainability is important to them, as well as to their stakeholders. With their current legacy systems, Higher Education institutions will struggle to report on ESG in a compliant way.
Additionally, IFRS 16 will come into play for certain Higher Education institutions and they need to develop mature financial processes to navigate this new requirement.
A cross-functional response will be required to manage these trends, pointing to the value of integrated data in the Cloud across HR, projects, and finance.
Universities and colleges will likely become more reliant on overseas students who will pay a higher fee to study as a key source of income. International dealings will come with their own complex processing which legacy systems will struggle to deal with efficiently.
Moreover, less public funding will come from statutory bodies or local governments with partnerships with private entities becoming more common for funding. In Scottish Higher Education, a decrease of 2.8%, equivalent to nearly £32 million, has been observed for 2024/25.
Universities and colleges should ensure not only that compliance is succinct, but that financial health can be reported on confidently, to attract this kind of private funding.
Finance departments continue to struggle with talent shortages, often meaning that current talent can struggle with current workloads. Not only does this increase time spent on strategic tasks, but general financial health can be affected by human error caused by fatigue.
The capabilities of digital tools that enable financial planning
Cloud FP&A can integrate data across finance, HR, and other key business functions. With integrated data strategy is easier to communicate as there is a single source of data truth, no longer do finance professionals need to sort through version history or get lost in reports.
Automation capabilities present an opportunity to utilize AI for advanced report generation and to reduce the degree of manual tasks your finance teams deal with. By automating data entry and reporting, your teams can re-focus on the data visibility the Cloud provides and use this to forecast and scenario model potential situations.
Moreover, AI can use techniques like data visualization, as well as advanced reporting capabilities, to ensure that strategic outcomes are easily communicated to other teams, as well as to stakeholders and partners.
Thanks to an extensible Cloud system financial professionals can easily ensure the flow of data between their back-office integrations and other third-party applications they use, such as CRM or a banking app.
How Unit4 can help
Unit4 is a global provider of financial planning and analysis software focused on empowering people in higher education, we have successfully deployed enterprise applications to more than 200 colleges and universities globally.
Logan University, a private institute for health science education, swapping paper-based and manual processes for Unit4’s ERP suite. This enabled agile, flexible, and automated financial planning practices that allow them to better manage disruption and make data-led financial decisions, all while reducing IT costs by 20%.
For Cranfield University, trending regulatory and compliance requirements, new fee and funding models, and increasing competition drove their move to Cloud-based FP&A. With Unit4, they can meet changing needs, save around 20 days per year of expensive external IT support, and more than £1,000,000 in accumulated savings.
To learn how we can help you achieve mature financial planning processes with our FP&A solution talk to sales, or consult our website.
