Making the right financial decisions in higher education begins with trust. Why trust? Because success in higher education is a team effort. Plus, too many things are simply out of your individual control since today’s environment is one of constant change. Politics, public health, revenue disruptions, and workforce challenges all play a part in your daily operations. As a leader in a complex organization who wants to get things done, you must have confidence in your team’s character and ability. That confidence is the very definition of trust. And it’s also why financial forecasting software is mission critical – it gives you trust in your numbers.
The benefits of trust can be easily seen in how your team is affected:
Yet all those benefits don’t automatically transfer to other areas. Trusting your team is one thing – but what if you don’t trust your numbers?
Accuracy in your numbers is necessary, but relevance is what shapes future financial decisions. Your team spends a lot of time and effort pulling and combining data to produce financial plans, budgets, reports, and presentations that communicate where you are and where you’re going. But financial documents delivered on a set schedule are no longer good enough. Those documents must also be relevant.
One of the hurdles to effective planning and budgeting, and the biggest obstacle to numeric relevance, is ensuring that today’s challenges are considered as you move forward through the rest of the year and into long-range plans. Is your information stale by the time it reaches the board/committee? After all, it’s hard to charge forward when you’re always waiting. And if you spend too much time looking backward, it may be time to look at how budgeting and forecasting software can push you forward.
What’s the bug in this system? Well, it’s time. Keeping your numbers relevant simply takes too much time.
How, then, do you add relevance to the equation? How do you ensure you’re tying current activity to future plans? Rolling forecasts are the perfect solution. Agile, iterative, and consistent forecasting is the cornerstone for building a foundation of relevance and trust in your numbers within financial forecasting software.
Static budgets built within legacy financial forecasting software aren’t flexible enough to react to what’s happening in real-time. Meanwhile, rolling forecasts are designed to change and adapt throughout the year, providing more value if large and/or sudden changes negatively affect your institution.
Rolling forecasts (see Figure 1) are dynamic, just like your daily operations, and continually adapt and update your planning processes against actual performance and trends. How? Rolling forecasts allow for more accurate and multifaceted forecasting by re-calibrating the forecast based on changes in both internal variables (e.g., mergers and tuition changes) and external factors (e.g., changing state contributions, public health, and demographic changes).
Rolling forecasts are a management tool that enables institutions to continuously plan (i.e., forecast) over a set time horizon vs. a calendar or fiscal year. For example, in a 12-month forecast period, as each month ends, another month will be added. In other words, you’re always forecasting 12 months into the future.
Best practice is to ensure rolling forecasts can extend (e.g., roll) beyond the current calendar or fiscal year-end. Most commonly, rolling forecasts contain a minimum of 12 forecast periods but can also include 18, 24, or more periods depending on the needs and complexity of the organization.
The ability to quickly make decisions and implement them with financial forecasting software in near real-time is critical for any institution to survive and thrive into the future. As discussed above, accuracy and relevancy, as it relates to the context of time, are both important. And rolling forecasts enhance both. You’ll see improvements in accuracy, and you’ll deliver faster – improving relevancy.
Need some proof? Figure 2, a chart from Aberdeen’s “You Can’t Afford to be Static: Rolling with the Punches in Forecasting” report is full of some pretty amazing results. Here are the 3 that stand out the most:
So how do you do it? How do you get started or move faster toward the adoption of effective rolling forecasts? How do you unify the past while looking to the future? Well, the multi-level approach that lets you do all of that is exactly what OneStream was designed to do.
Our Intelligent Finance Platform consolidates and pre-populates rolling forecasts with actuals the moment that the actuals have been certified. And there you go – you’ve now got a simultaneous view of the past that’s in the moment while looking to the future. OneStream even dynamically updates standard reports using the most current forecast. This functionality drastically cuts down the time and energy that your FP&A team will need to spend generating reports, making it much easier to iteratively forecast.
As your team begins its rolling forecast journey toward organizational agility, data relevance, and trust, download our Unify Connected Planning Whitepaper to learn more. And if you’re ready to make the leap from static planning to agile forecasting, contact OneStream today!
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The health of any multifaceted organization depends on multiple teams working in unison, with several sources of data in real-time. In this post, we’ll take a quick look at how the right technology can boost your team’s ability to collaborate quickly and accurately – all through the lens of higher ed budgeting and planning software.
There’s nothing simple about budgeting and planning in higher education. It’s a matrix. How, exactly? Well, simply put, there are just too many moving parts, too many external variables, and too many stakeholders for these two foundational activities to be linear. As today’s increasing pace of change places ever more pressure on Finance teams, many are taking steps to modernize their static budgeting and planning cycles.
You’d be hard-pressed to find a regent, president, provost, dean, or any other higher-ed leader who didn’t list collaboration as a core value. Educational institutions have an inherent interdependence and must have all their organizational units in sync, working together, to accomplish large goals (see Figure 1). For that reason, access to and collaboration with quality data is imperative at every level of the organization.
Figure 1: The Importance of Data Sharing and Collaboration Source: HBR Analytic Services, 2020
The collaboration gap in budgeting and planning often begins and ends with the segregated nature of internal systems and, more importantly, how those systems share data and edits. Any team emailing around versions of spreadsheets and documents with edits and notes knows this pain all too well.
If those teams are printing hard copies and editing with sticky notes – a practice that’s still surprisingly common – then that pain may even be worse. Essentially, working separately and consolidating along the way creates openings for errors and destroys any hope for a quick, accurate turnaround.
Spreadsheets aren’t equipped to handle the multiple layers of work happening within the flurry of activity known as budgeting and planning in higher ed.
Figure 2: Problems Caused by Spreadsheet Collaboration Reach Far and Wide Source: MarketWatch, “88% of spreadsheets have errors”
In fact, budgeting and planning teams are expected to turn edits, integrate new data and structures, keep up to date, and communicate more clearly than ever before. Here are just a few of the top challenges that bog down budgeting and planning efforts when they’re rooted in manual updates through spreadsheets:
The hidden costs of spreadsheets are created by duplication of effort, errors, and rework. All this wasted time moves your team’s focus away from the true value of analysis and communication that supports strong decision-making across the institution and keeps everyone stuck in busywork.
As the pace of change continues to increase, higher ed Finance teams need to shift focus away from data gathering, reconciling, and managing key integration points and into collaborating with decision-makers and providing better, faster insights.
At OneStream, we understand that complexity is the inevitable by-product of change, especially in higher ed. Accordingly, we believe that your success will not be realized by eliminating complexity but will instead be achieved by effectively steering your institution through it.
How do we do it? Our unified Intelligent Finance platform (see Figure 3) allows us to deliver our many capabilities within a single, extensible, cloud-based application built to scale along with your organization. That’s why hundreds of organizations, including many higher ed institutions, have chosen OneStream – and they’ve never looked back.
Why is unification important? Well, it eliminates openings for errors created by manual work and separate, connected financial reporting tools. If you re-type data or are dependent on technical connection points for updates, you have opened the door for potential problems.
What can a platform approach do for you and your team? Here are a few of the key benefits you get with OneStream’s budgeting and planning software:
Need some proof? How about a great example from one of the nation’s top 10 public research universities? This case study details how OneStream has helped reduce the time needed to complete budgets and has detailed ROIs, including how a regular existing 3.5 hour-process was reduced to just 5 minutes.
Want to continue the discussion? Have any questions? Contact us, and one of our experts will reach out to you ASAP.
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Budgeting, Accounting, and Finance teams in higher education, just like in other fields, must adapt and thrive in the face of rapid change. In this blog series, we’ll uncover the key value drivers that modern budgeting and planning software has to offer higher-ed leaders. We’ll also map out how these leaders can begin or accelerate the journey to conquering complexity and empowering their teams to lead at speed.
While accuracy, transparency, and consistency are the backbone of accounting and financial operations, adding speed and agility is what ultimately separates the institutions that deliver consistent value from those that struggle.
And as the two-year mark of the COVID-19 pandemic flies by, speed and agility have never been more important for leaders in higher education.
These leaders have been repeatedly forced to adjust daily operations. But they now face another obstacle: reconciling visions, plans, and budgets with a historic disruption that has created dips in enrollment, leading to a critical loss in revenue (see Figure 1).
Chart: Natalie Schwartz/Higher Ed Drive, Source: National Student Clearinghouse Research Center
Those revenue losses naturally put pressure on the Finance team. And while pressure is nothing new to financial leaders in higher ed, COVID-19 and its complexities have undermined many institutions to the point where they’re no longer trying to balance budgets through cuts and efficiencies. Instead, schools must rethink and restructure their business models.
Board members, presidents, and deans – all of whom carry huge responsibilities – are thus demanding more consistent and timely data inform their decisions.
Accounting and Finance teams must therefore modernize to streamline processes, unify outputs and empower leadership with the information needed to not only make key decisions but also pivot when necessary. After all, the total economic and operational impacts of the pandemic are not yet known, but one thing is certain: complexity and the rapid pace of change are the new normal.
Over the next few weeks, we’ll be laying out why higher-ed leaders need a modern, platform-based approach to planning, budgeting, and forecasting. We’ll also cover how to speed reporting and analysis cycles – and we’ll lay out the roadmap to show you how to make that a reality.
OneStream has empowered hundreds of organizations (including dozens in the public sector) to unleash the power of Accounting and Finance by unifying planning, budgeting, forecasting, reporting, and analytics through a single, extensible solution (see Figure 2). This solution is delivered via a cloud platform designed to evolve and scale with your institution.
Why should you care? Well, here are just a few of the key benefits you get with OneStream’s budgeting and planning software:
While you may not yet be a customer, we appreciate your work in the public sector and value your opinion – and we’d love to explore opportunities where we can move forward together. At OneStream, our mission is simple: “Every customer is a reference, one success at a time.”
For more information, download the Higher Education Solution Brief. Want to continue the discussion? Have any questions? Contact us, and one of our experts will reach out to you ASAP.
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COVID-19 is impacting almost every individual and organization across the globe. And while we are several months into the pandemic, there are still so many unanswered questions. Will our largest population zones revert back to shelter-in-place restrictions? Should we really anticipate up to three-fold increases in remote work as Hackett’s Finance 2020 research suggests? And when will consumer demand and supply chain activity return to pre-COVID levels, if ever?
State and local government and education (SLED) and public higher education face the same questions as their private sector brethren. How so? Because existing annual or biennial budgets no longer reflect the economic environment under COVID. The impact and uncertainty from COVID are bringing many questions about these organizations’ funding sources considering the variability in macroeconomic conditions. Why? Because public higher education operating budgets receive anywhere from 15%-40% of their funding from state and federal funds. And with uncertainty permeating across federal, state and local agencies, the challenge for leaders within higher education to focus on structural classroom changes is becoming increasingly difficult. State and local governments face similar pressures too, as 50-60% of their tax receipts (e.g. sales and property tax) are typically generated from the retail and other tax generating industries which have been decimated throughout the pandemic.
Finance leaders must increasingly navigate the interconnected challenges of organizational complexity. To drive performance, they must execute critical processes with efficiency and support decision-making across the enterprise with timely access to financial and operating results.
And now, suddenly, Finance teams must also adapt and respond to the unprecedented increase in the demand for remote operation spurred by COVID-19. It’s now more critical than ever for them to drive efficiency in financial processes. But success in this complex environment hinges on having sophisticated collaboration and process management capabilities.