By Gary Allen, Director, Global Product Strategy, Oracle Higher Education
Autumn is an exciting time for higher education—the start of a new year, the influx of new faces, and the promise of a future filled with learning, personal growth, and future career opportunities.
Yet if you take a stroll around most U.S. campuses next fall, you might notice something: there will likely be fewer students roaming the grounds than this year.
As the Millennial generation (born roughly between 1980-2000) grew to maturity, the U.S. saw steady growth in the number of high school graduates going on to pursue their studies. At 92 million, the Millennials are the largest generation in American history.
But next year—18 years after the last of the Millennials were born—marks the end of that trend. The coming decade will see a steady decline in the number of high school graduates—and that puts a lot of competitive pressures on higher education institutions.
For most colleges and universities in the United States, enrollment is their number one source of funding; more students means more tuition. Declining enrollments present a revenue challenge, and so the competition to attract and keep students is fierce.
And other funding models are changing as well. Traditionally, public funding was provided on a per capita basis: the more students enrolled, the more money the institution received. Today, many governments have moved away from the per-capita model. Close to three-quarters of states now base some or all of their educational funding on performance outcomes, looking at measures such as graduation rates, retention, and the average number of years it takes students to complete their degrees.
All of this is having a huge impact on college and university finances.
To make up for the shortfall, institutions of higher learning are turning to new sources of funding. Some are partnering with corporations, providing training that is specific to what a company needs in its workforce. Some are looking overseas; Duke University recently partnered with a Chinese institution to open a new, joint university in China.
Still others are turning to continuing education, expanding their existing programs and launching new ones to attract adult learners. And more institutions are vying for sponsored research projects, often funded by private companies.
All of this complicates the job of finance teams that are tasked with planning, budgeting and forecasting revenue over the long term. Strapped for both staff and cash, finance teams must run numbers full of uncertainties with tools that were never designed to take these new business models into account.
Rather than relying on Excel spreadsheets, which are time-consuming and error-prone, finance leaders at colleges and universities are looking for better, more cost-effective tools to help them plan and manage all sources of funding.
Many of them are turning to enterprise performance management (EPM) in the cloud to extend the capabilities of their core ERP systems. These new capabilities include strategic modeling, profitability and cost management, and industry-specific functionality for new income sources such as continuing education and sponsored research.
The cloud also offers capabilities for other lines of business, helping campus recruiters target, attract and retain more students. They can expand their marketing efforts into new demographics (e.g. adult learners), wider geographies, and popular social media channels. A student information system that integrates with an institution’s EPM and ERP systems will give finance leaders faster, more accurate insight into enrollment levels, helping them forecast revenue with greater accuracy.
To succeed in this environment, higher education leaders need to be digitally savvy and develop revenue models that cast the widest net possible. With the cloud, finance leaders can be agile enough to develop new models quickly. The combination of Oracle ERP Cloud, Oracle EPM Cloud and Oracle Student Cloud can provide the insights and financial planning capabilities that finance leaders are seeking.
Higher education leaders can learn more about these capabilities at Educause 2017, Oct. 31-Nov. 3 in Philadelphia. The CIO of Boise State University will join my Oracle colleagues for a panel session, “Personalization + Digitalization = Innovative Student Experience and Student Success.” You’ll come away with a better understanding of how Oracle has helped institutions like Boise State achieve the insight they need to compete for scarce enrollment dollars.