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Meeting the University Budgeting Dilemma With Technology

University Business, May 2012

Higher education costs are skyrocketing at a rate much higher than inflation. While states have drastically reduced public university budgets, those universities are constrained from raising tuition costs appreciably. Add to this the fact that higher education is a labor-intensive enterprise, and you begin to understand the dilemma in which we college administrators find ourselves.

Like many other higher education institutions, the University of Delaware understands the need to put a rigorous process in place to face the budgeting dilemma. One way to control operational costs without sacrificing academics lies in business enterprise software that enables us to collaboratively establish priorities and allocate resources to the highest value projects—or facilities, or programs, or even people. 

UD uses collaborative prioritization software to focus our limited resources and get the best “bang for the buck,” while streamlining the decision process. With this approach, we get a sense of budgeting factors that seem to be at odds with each other, and everyone has a say in even the most complicated decisions.

Balancing resources with demand

Budgeting can be an enormous challenge, particularly for state and state-assisted universities, which must consider their state’s budget as well as their own when making operational and capital expense decisions.

Collaborative decision-making software involves each stakeholder in setting key decision criteria and ranking each factor’s importance. It then compares criteria, prioritizing those that should be emphasized in both operational and capital budget line items.

Consider the contentious decision-making surrounding campaign planning. In my experience at UD, there are typically four times more requests for campaign initiatives than we have fundraising capacity. Everyone is adamant about the importance of his or her own initiatives, and how they contribute to established criteria—such as the university’s marketability and whether the initiatives provide budget relief. Collaborative decision-making software has helped establish a process at UD that strikes a balance among initiatives for which money can be raised.

Besides campaign investments, this technology has given us insight into other controversial issues, including capital planning and space allocation. As we all know, space is limited in a university setting. Decisions about space utilization are complicated, involving a wide range of interested stakeholders, many of whom may be looking only for better parking. Software has greatly simplified the otherwise cumbersome process of allocating space and prioritizing new building projects among our departments.

Universities also are going through a dramatic transformation in IT. The way students seek and use information increasingly relies on new technologies, and the investments we make are the foundation for our students’ success now and after graduation. To maximize our IT return, we evaluate technology based on factors like whether it improves the learning experience, increases efficiency, and is technically feasible.

This decision-making approach has also become important in evaluating prospective scholarship athletes. UD has even introduced collaborative decision-making technology into our talks with fellow Colonial Athletic Association schools in rating colleges seeking entrance into the conference.

Avoiding political pitfalls

Top-down or autocratic decision-making doesn’t work in higher education. Universities are naturally collaborative institutions, and all stakeholders want to ensure their voices are heard.

Unfortunately, most institutions lack a process for establishing institutional priorities. Information gathering can seem aimless, leading to “advocacy-based” approaches where each department or unit selects and presents the metrics best supporting its argument for funding. Discerning where the greatest value lies is difficult: How do we make a decision to fund program A over expanding program B or C?

The result is a process that’s so bogged down and politically charged that our best faculty members often choose to disconnect from the activity rather than endure seemingly pointless repetition and wheel-spinning.

Collaborative decision-making software has been critical to improving this process for us. We are confident that everyone’s needs are addressed fairly, with a system that dramatically saves time and allows us to make the best use of our limited budget dollars.

No easy answer

There’s no easy answer to higher education budgeting in today’s economy. We must find ways to run operations more efficiently, without sacrificing the educational offerings at the heart of our promise to our students. To maximize available cash and improve students’ experience, we have to start thinking like businesspeople. We must get smarter about how we make budgetary decisions.

At the University of Delaware, streamlining the decision-making process through a rigorous methodology—supported by IT—goes a long way toward saving time, allocating resources appropriately, and making sure every stakeholder has a full and equal say in the choices that are made.

Pat Harker is president of the University of Delaware.