It’s no secret that costs are a major concern for most colleges and universities. In fact, costs in higher education are exceeding the rate of inflation—while operating budgets are shrinking.
Given this financial squeeze, many executives are being asked to run the college or university more like a business and come up with ways to enhance the bottom line. While the claim can certainly be made that running a corporation and running a college or university have different priorities and working environments, proven business practices such as short and long-term planning, looking to cut costs and increase revenue on a continuous basis, and instituting business process management principles to increase performance and eliminate inefficiencies are all sound methods for any organization.
With an eye on better business practices and a focus on addressing this cost crunch, CFOs are looking for creative solutions to cut costs, while keeping expenditures intact for its core competency: educational services.
With the maturation of cloud computing and related technologies such as web applications, networking, and virtualization, many CFOs are implementing cloud technology— with the intent of cutting costs—in the areas of e-learning and research, to name a few. And while these areas are utilizing cloud technology, one area that has gained widespread adoption by CFOs across the higher ed industry is in the re-engineering of admissions operations, and its supporting functions, such as housing and financial aid.
Traditionally, CFOs in higher education have closely guarded their purse strings regarding new capital outlays and expenditures with their past experience of huge capital outlays for administrative technology. But now, given the said financial concerns, progressive thinking CFOs and CIOs are looking at cloud-based solutions, not as a restrictive option due to cost, but rather as a device for cutting costs, improving efficiencies, and even as a revenue enhancer.
For example, historically, the business model for admissions, financial aid, and student advising has been to collect all incoming documents from applicants and try to organize all the records in a physical folder (manila folder, boxes, and file cabinets). This manual, paper intensive workflow has significant cost impact to an institution:
Moreover, many IT shops in higher ed have aging data centers whose origins hearken back to the days of the monolithic mainframe. Often, these data centers “grew in place” as technology evolved and can have a high risk of damage from natural events such as floods. In addition to this inherent risk, there are several costs associated with these environments.
With these cost challenges in place, many forward looking CFOs – in collaboration with their CIO – are making use of cloud-computing and remotely hosted solutions and services and are realizing strong, tangible results in cost cutting, while appreciating an impressive ROI on the technology infrastructure put in place. Below are specific examples of how that is occurring.
These bottom-line results have a significant impact on business cycles as manual assembly of data has been removed. Information is more readily available and is less cumbersome to share with “downstream” users. With automated collection and more rapid response times, cycles have flattened and are completed sooner, allowing several opportunities.
In addition, a better predictive awareness of final outcomes to mitigate is available if needed, such as significant increases in float as application, tuition, and orientation fees are paid sooner, and improved and more consistent data capture, which allows for high-grade analytics that more accurately assign discounts and help meet institutional goals.
Let the buyer beware
While there is significant cost evidence to clearly indicate how a higher ed institution can dramatically cut operational costs and improve workflow efficiencies in admissions and other functions by going to the cloud, there are a few inherent risks that any CFO should be aware of and address before committing to a cloud initiative.
The creation of a comprehensive strategic plan is essential to develop a baseline of expectations, opportunities, and standards. Most of these items can be addressed and planned for by the formulation of a blueprint up front that addresses the following considerations:
Through the cloud, stakeholders at the college or university would now use only those services that are needed, enabling the institution to highlight what resources are used and not used. This transparency will allow the organization to make better use of financial, physical, and computing resources for IT sourcing. Agility and scalability is enhanced as the institution can easily change and modernize over time, without having huge capital expenditures in place and committed to extensive hardware that will become antiquated in short time.
While security is a major discussion point when analyzing to go to the cloud, in many instances, security can actually be strengthened as cloud computing experts have placed heavy emphasis on safeguards in the cloud environment. Here again, this is an opportunity for improving efficiency across the organization.
This enhanced level of competency also carries over to support, maintenance, disaster recovery, and overall administration and support. IT efficiency can actually be improved, not only by the modern cloud infrastructure, but also by taking advantage of the cloud vendor’s expertise. That being said, giving up management and control of all institutional IT functions is always a concern, but IT can and should still oversee and have full management and control, supported by management control systems to assess, monitor, and analyze how services are deployed and used.
Despite the tremendous challenges higher education faces today, there are remedies that directly impact the cost-value equation. It is possible to enhance service and job satisfaction while reducing cost. With the glaring focus on the cost of higher education, it should come as no surprise that some institutions are already practicing what they teach.
Bob Burke is president of Massachusetts-based FolderWave, Inc. (www.folderwave.com), a cloud-based solution provider offering products and services designed to significantly improve complex, high-volume, time-dependent process and data management operations in many operational areas in higher education. Bob can be reached at email@example.com.