Carlson Thought Leadership in Finance & Technology

Top Benefits for Higher Education Budgeting & Planning with Adaptive Insights

December 20, 2016 / by Brian Teets

At Carlson Management Consulting, we have implemented Adaptive Insights for many institutions of higher education – from larger universities to smaller private colleges.  We are often asked early in the discovery phase of the engagement what are the key benefits that finance teams and institutions as a whole can expect to experience.  Here are some benefits at the top of the list:

  • Improved Collaboration & Distribution of Budgeting Responsibilities

Spreadsheet-based budgeting processes are onerous, manual-intensive and create silos of activity.  Worksheets are sent out to budget stakeholders, completed and then submitted for approval along with yet another time-consuming effort of consolidation.  You then hope the finished product isn’t like the 64% of annual plans that are out of date before even being put into effect.  Then there is the issue of aligning the budget to strategy (addressed later).  As a complex exercise with many moving parts, budgeting and planning for Higher Education should involve the input of all relevant stakeholders in order to be performed accurately and efficiently.  Cloud-based corporate performance management solutions like Adaptive Insights allow for many different stakeholders to be engaged in the budget process without having to worry about whether they are working from the right base budget data, using the correct version of the spreadsheet, inadvertently breaking formulas, or formatting data correctly.  They simply log in to the Adaptive Planning module and fill in their budget line items.  Adaptive manages all the controls, versions, formulas, etc.  The budget manager has instant visibility into those projections and consolidation happens automatically.  The budget can be updated as necessary and allowed – by the person who created it.   As an added benefit, Adaptive provides a mechanism for workflow approvals (see image below) of budget requests which feed directly into the annual plan for a much more traceable, efficient process. 

Adaptive Workflow.png

  • Added Flexibility and Insight with Driver-based Budgeting and Scenario Analysis

higher ed scenario analysis.pngDriver-based planning is an essential component of higher education finance best practices.  Effective planners need the ability to adjust revenues and expenses by multiple drivers. Usually, the driver will have a lookback to the prior year actual balance then grow that revenue or expense by either a standard inflationary rate or a specific assumption.  For example, utilities and insurance usually grow in their own unique manner.  Therefore, these types of expenses should have their own driver percentage growth rate.  You can easily create different types of assumptions and mix it up for the type of revenue/expense driver to see the annual, 3 year, 5 year, 10 year or even longer term impact.  By capturing these changes through new budget versions, you can view the financial impact of these scenarios.  You can also report on changes from your Board-approved budget, original budget, revised budget or any other type of planning scenario you may have created.  With Adaptive Insights, these changes can be made and reported on in minutes.

  • The Ability to Budget Strategically

It goes without saying that universities and colleges need a realistic long term plan; however, it’s fairly common that the annual budget doesn’t align strategically with that plan.  By including the long range plan early in the budget cycle, strategic alignment can be assured.   As a practice, executive input on priorities and strategy is a necessity early on as well.  Budgets are typically for a one year term, which is an arbitrary range of time.  Many initiatives, however, take longer than 12 months to realize results and therefore the annual budget may provide an incomplete picture of performance. Make sure your annual plan is simply a subset of the long range (3-5 year) strategic plan. Inclusion of the long-term plan ensures that the tactical elements of the budget align with the long-term goals of the organization.

The economic reality in higher education today is that there are typically many more programs and services than there are available funds.  This is where it is very important to ensure those budgetary requests can be prioritized and easily incorporated into the short term and long term plan. 

For institutions that follow a decentralized approached, we have found that incremental budgeting works very well.  Division or college budget managers need the ability to reallocate base budgets while locking down the prior year’s base original budget.  Then they can request and justify additional budget, classify the expenditure (base or non-base type) and prioritize their request. Ultimately, the centralized planning department should have access to the request to decide on approval.  All of these activities are easily managed in Adaptive Insights.    

  • Incorporate financial & non- financial KPI’s for full  picture insights

Finance executives and FP&A teams need to be looking not only at financial data but non-financial data as well.   Indeed, according to the Adaptive Insights CFO Indicator Q3 2016 study, CFOs reported that non-financial KPIs comprise up to 20% on average of the total KPIs they are reviewing. Looking ahead two years, nearly half (46%) of CFOs anticipate that to increase, with non-financial KPIs expected to comprise up to 30% on average of the total KPIs tracked.  In the context of higher education, non-financial data could include enrollment figures, retention rates, drop/adds, housing capacity, study abroad,and student/teacher ratios.  These types of data usually have a direct impact on an institution’s budget and are useful as leading indicators, particularly when presented in a multi-year or semester visual analysis.  Some examples of financial ratios could include tuition per student (net and gross), average gift revenue, and debt and liquidity ratios.  You need to have comprehensive data and KPIs in a centralized hub such as Adaptive so that you get the full picture insights that make better decision-making possible.   Indeed, at Carlson, we offer a cloud-based integration solution, DataBlend, that allows institutions to quickly and cost effectively integrate Adaptive with systems such as ERP, HRIS, CRM, Enrollment, and others. 

enrollment dashboard.png 

  • Incorporates flexibility in model structure to allow budgeting by school, department, fund, program, project, class, etc.

Budgeting in Higher Ed requires items to not only be categorized at the “natural” level but also at the functional or purpose level in accordance with NACUBO guidelines.  For example, expenses such as salaries, travel, and miscellaneous would also be captured in broader functional terms like instruction, administration, research, etc.  It is very important to understand and incorporate both the sources of revenue and types of expenses.  

This type of structure is commonly referred to as FOAPAL (Fund, Organization, Account, Program, Activity, and Location).  Usually Activity and Location are not budgeted (actuals are captured) and the first four or a combination thereof are budgeted to.  So, this flexibility is very important for reporting in NACUBO-type formats vs Management type of reporting on financial and other KPI’s such as retention, enrollment growth, endowments, etc.  With Adaptive, you have the flexibility of model structure and reporting capability to readily achieve this.


Adaptive Insights is often a great fit for institutions looking to improve the way they budget, plan and report.  With an implementation partner who understands the complexities of higher education planning, there is an opportunity to cost effectively transform financial planning and analysis in a way that ensures improved performance in the years to come.  If you are interested in learning more about how Adaptive Insights and Carlson can help you experience the benefits of Cloud CPM, please request a discovery call and demo.

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About the Author: Brian Teets joined Carlson in 2015 and brings significant accounting and finance experience in higher education and international companies. He is a degreed accountant and recently completed his MBA. Brian also has experience in the ERP implementation processes including project planning, business process reengineering, and user acceptance testing. He has also proven experience implementing Adaptive Insights, for which he receive a Torchie Award on behalf of Montclair State University. During Brian’s tenure at the university, his department delivered an impressive ROI of 211% and over $114K annual savings by switching to Adaptive Insights.   Brian uses his extensive experience in higher education, international finance and project management to help clients successfully implement Adaptive Insights.


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