Resource Optimization and Growing Net Revenue
All institutions are resource restrained. An experienced higher education partner can examine how to optimize resources or reconsider ways to grow revenue. As institutions look to enhance
their comprehensive plans, our focus is on finding ways to maximize current resources, seek ways to maintain net revenue, and launch initiatives that grow net revenues. This approach takes into account current institutional strategies and tactics, along with the broader trends impacting higher education.
Areas of Focus
- Capacity analysis
- Areas for collaboration
- Joint agreements
- Program growth capabilities
Examples of Our Work
- Articulation agreements
- Online program modeling
- Identification of strategic investment resources
- Restructuring of net tuition models
Case Study #1
Adapted from the Spring 2022 College of Saint Benedict and Saint John’s University in Minnesota magazine.
A demographic cliff for higher-education is on the horizon, with fewer children born in the early 2000s leading to several hundred thousand fewer students to enroll. This drop-off creates a financial crisis for most higher education institutions. Few would argue with the idea of pooling resources and sharing strengths in order to reduce costs and improve services for students. Almost everyone seems to argue about how to do it.
At the root of the conflict—almost always—is institutional mission. Well-intentioned leaders can start out looking for formalized partnerships to serve the needs of the 21st century student. But after watching and reading about the experiences of others—painful stories of conflict and damaged campus culture—they end up sticking with the strategies of the top 500 institutions. The result of avoidance generally means continuing with a culture of cost cutting, putting more burden on faculty and staff who are trying to carry the mission forward in ways that are unsustainable…but are sustainable enough to survive another year.
There are glimmers of hope though. Some institutions have found successful ways to partner that have led to increased efficiency, more opportunities for students, and new ways to offer academic programs where start-up costs or additional faculty hires would have been challenging. One example is the College of Saint Benedict and Saint John’s University in Minnesota. For almost 60 years these two institutions have found ways to collaborate and coordinate. The key to their success might be that they chose to do the hard part first: academics.
For CSB and SJU, they aligned calendars, agreed on costs for transferred credits, coordinated course offerings and eventually combined departments. Ultimately, the two schools seamlessly blended academic offerings into what is today a single curriculum under a joint provost. But those fights were as close to bloody as two Catholic, Benedictine schools are likely to get. And they stuck with it, even when it was messy. Too often in education, we don’t work through the messy.
Right now, with an eye toward the demographic cliff, these two schools are choosing to align even closer. They are streamlining administration, have aligned their trustees into “common boards” made up of the same members, and recently announced the first president to serve both institutions.
These are significant changes for significant efficiencies. But they’re possible because both institutions have remained committed to making it work without merging or forsaking their individual identities. But never giving up on the relationship and how this will better serve students, allow for more flexibility, and provide opportunities to remain vibrant for decades to come.
Case Study #2
A special-focus institution needed to identify over $600,000 in improvements to their bottom line within the next two fiscal years. And the situation was becoming urgent: if the school continued to operate at a deficit, it would be in violation of its debt covenants. NACUBO Consulting was brought in to find a combination of cost savings and revenue increases that would resolve this immediate problem and get the institution operating in the black for the first time in three years.
NACUBO Consulting, in coordination with the institution, investigated staffing and evaluated teaching loads against non-teaching activities. The analysis showed that full-time faculty were spending about half their time on non-teaching activities. From an internal perspective, this split seemed necessary, but the NACUBO consultant had seen a successful model at a similar school, where many of these same activities were accomplished by less-expensive professional staff. Reassigning these activities and increasing teaching loads reduced the required number of full-time faculty—which was achievable given the near-retirement status of some faculty and other personnel changes at play. This recommendation, along with other staffing reallocations, resulted in more than half the needed improvement to the bottom line.
The other side of the coin focused on recruitment, as the future of the institution depended on increasing enrollment. It was already using a well-known marketing firm to dial-in the student profile, but it needed to leverage that vendor relationship to get better results. Having experience with that firm and their proprietary tool, the NACUBO consultant was able to identify specific skills gap in the admissions office that was preventing greater results. Additionally, the consultant recommended a position be created that would increase the effectiveness of the vendor relationship and fill a critical marketing need—all in the name of increased enrollment.
The institution has implemented changes to staffing and teaching loads, and it currently hiring for a new position in the admissions office. It is on track to become profitable in less than one year.
Vice President, Consulting and Business Development