Case Study: Public Multicampus University: Understanding The Financial Impact of Academic Programs

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Case Study: Public Multicampus University: Understanding The Financial Impact of Academic Programs

For the char

Uploaded by

Beatrice Teh

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EDUCATION

CASE STUDY: PUBLIC

MULTICAMPUS UNIVERSITY
Understanding the financial impact of
academic programs

Client background
A public, multicampus university system retained RSM to
collaborate with one of the universities in their system. The
university has over 9,000 students from more than 40 U.S.
states and over 30 countries, and offers over 100 areas of
undergraduate and graduate study.

Challenge
The current financial landscape for higher education is
challenging. State funding has decreased, private donations
have diminished and enrollments have declined, yet for many
universities, operational costs continue to rise. RSM’s client
found itself in an economic downturn with a $16 million budget
deficit, and an urgent need to make strategic adjustments,
but their processes and systems did not produce meaningful
academic margins reporting for the various academic programs
and departments to support a proper academic review.

Identifying accurate academic financial contributions can be a

complex task, and it is often misunderstood within the industry.
RSM’s client needed strategic insights showing financial
contributions by academic department and academic program.

Solution
RSM deployed a team with process improvement, accounting,
financial modeling, data governance and higher education
industry knowledge with the objective of creating an efficient
and repeatable process to assess academic margins.

Through effective collaboration with university leadership, as

well as staff from the business office, academic departments,
registrar, admissions and financial aid, the team successfully
designed a model and subsequently built a live tool to allow for
academic margin analysis at the program and department levels.

THE POWER OF BEING UNDERSTOOD

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Armed with this in-depth reporting, the university’s leadership
was able to make intelligent decisions and perform powerful
“what-if” scenarios related to program viability, student
recruiting requirements, tuition adjustments, instructor needs,
as well as their capacity to deliver on their academic mission.

Findings and results

RSM succeeded in developing an enhanced process and
model that allowed the client to make timely and informed
strategic decisions. Specifically, RSM delivered the following
key outcomes:

•• Provided contribution margins across a number

of attributes, including the academic department,
academic program, instructor and student type,
providing line of sight into fixed and variable costs.
•• Developed a sustainable process to evaluate academic
financial contributions in the future.

These data points, although one of many aspects to

consider when evaluating the school’s strategy, helped to
support certain immediate program adjustments, including
discontinuation of certain programs.

RSM’s work also uncovered the following insights:

•• Academic revenues were not properly tied to

corresponding direct and indirect costs.
•• The current methods and tools used for evaluating
financial performance did not provide data for
important attributes.
•• A sustainable data governance program was needed to
help define terminology and drive consistency across
data sets and schools.

RSM was able to identify go-forward requirements to improve

system-wide data directly supporting the core revenue and
cost generating activities of the university’s academics.
In addition, RSM provided a new perspective allowing the
university to immediately identify several cost savings
initiatives in academic programs and through other strategic
staffing changes necessary to close their current budget deficit.

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