The Cloud Goes To College To Control Higher-Education Costs


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After the long summer break, relieved parents are sending their college-age kids back to school. But bad news threatens to temper the celebration: By the time students pick up their diplomas they—or the parents who cosigned their student loans—will be stuck with an average bill of $37,000, according to a recent report from the Federal Reserve Bank of New York. In the United States alone, more than 44 million borrowers are struggling to pay back an astonishing $1.3 trillion in student debt, the report said.

Well aware that these burdens are unsustainable, university boards are cutting back sharply on expenses, leaving administrators with the challenge of running their organizations more efficiently without sacrificing the quality of education. Budget cuts of more than 40% at some colleges during the 2016-2017 academic year have focused the attention of administrators on IT investments as a powerful way to strike that balance, according to the latest survey from the Campus Computing Project, a group that has tracked college expenses for nearly 30 years.

Courtesy of Birmingham City University

Birmingham City University in the UK is keeping higher education affordable by moving its computer systems to the cloud.

“CIOs and senior campus IT officers continue to express great faith in the power of technology to enhance, if not transform, instruction and learning at their campuses,” the report said.

The Cloud Gets ‘Sticky’

After initial feelings of caution toward new technologies, those administrators are now enthusiastically looking at the cloud for answers to their budget woes, according to Keith Rajecki, a senior director at Oracle and an expert in technology for higher education.

“We say the cloud has become ‘sticky’ in higher education,” Rajecki said. That is, many schools are now turning to cloud technology to modernize their systems, cut costs, and analyze data to gain insights about more cost-effective ways to run their campuses.

That’s because college administrators are now more comfortable that cloud-based systems are secure and support strategic initiatives, like how to reduce expenses to keep tuition affordable.

This sentiment is echoed by other observers. “Cloud systems allow the institutions to divert resources away from commodity functions and maintenance and use those resources to deliver educational services to students, find more time to drive innovation, and support new and disruptive business models,” said Nicole Engelbert, principal analyst on  the  higher education team at Ovum, a London-based IT consultancy.

Oracle currently counts more than 400 institutions of higher learning using Oracle Enterprise Resource Planning (ERP) and Enterprise Performance Management (EPM) applications in the cloud to manage finances and devise budgets, as well as Oracle Human Capital Management (HCM) cloud applications to attract and retain top faculty and staff members. Schools are also using the new Oracle Student Cloud, a next-generation student information system that incorporates Customer Relationship Management (CRM) technology, to determine student interests so that universities can run targeted recruitment campaigns aimed at qualified prospects, then support and engage those students once they are enrolled.

Making Quality Education More Affordable

Shawnee State University, located along the banks of the Ohio River in Portsmouth, Ohio, with 3,600 students, is one example of a university using Oracle ERP Cloud to keep education affordable.

Ohio has frozen tuition at all state colleges and universities, joining a half-dozen states mandating limits on tuition for state-supported schools. These new rules forced community colleges in Tennessee and Oregon to eliminate tuition altogether for community colleges. In April, New York Governor Andrew Cuomo announced that New York would become the first state in the nation to offer free tuition to low-income students attending four-year colleges.

Some of the potential belt-tightening choices that today’s universities consider include delivering courses online rather than in more expensive classroom settings; purchasing through central, discounted, procurement contracts; and recruiting adjunct faculty, rather than higher-paid professors, to lead basic classes, Oracle’s Rajecki said.

To make up for the significant loss in government funding, Shawnee State University and other affected schools are using the embedded analytics capabilities of ERP cloud to run predictive scenarios to evaluate potential savings. Shawnee State is also using ERP Cloud to automate the preparation of the university’s monthly and year-end financial close processes to quickly prepare and send reports to the State of Ohio and Board of Trustees about their progress in adhering to the new budget.

Some 14,000 students will be returning this fall to the University of Wyoming, a land grant school founded in 1886 that offers 190 degree and certificate programs.

Wyoming, hard hit economically by the slump in oil, natural gas, and coal prices, cut $41 million from a two-year university grant. To respond, the university is implementing its new “WyoCloud,” which combines Oracle’s cloud-based applications to replace the university’s aging financial, procurement, human resources, and reporting systems.

As a result, the university now has access to more accurate data, which leads to more detailed reporting. The automation capability of ERP cloud applications also allows the financial team to computerize some of the university’s remaining paper-based processes, like faculty travel reimbursements, which now take an average of 13 business days to process.

The university expects the combination of more accurate data plus automation will equal significant time savings for budget planners. They’ll be able to turn their attention to creative problem-solving and create budgets that meet today’s financial realities.

The finance crunch in higher education isn’t limited to the United States. In the UK, Birmingham City University, with 24,000 students from 80 countries, is transforming computer systems running finance, planning, human resources, and procurement activities by moving them to the cloud.  The university wants to create fewer, more powerful and agile computer systems to gain “single-truth” business intelligence.

With Oracle ERP Cloud, the university plans to standardize its back-office processes and encourage users to take a “self-service” approach to the use of its systems. With the expected improvement in the quality of the university’s data, planners expect to improve financial analysis, reporting, and compliance as well.

Abu Dhabi University, located in the capital city of the United Arab Emirates, attracts students from around the globe and is known for career-focused education and research.

The university recently added Oracle EPM Cloud, allowing the school’s financial department to develop its budgets and five-year strategic forecasts. The department can modify the assumptions behind those forecasts and instantly see the implications of those changes.

By using Oracle Planning and Budgeting Cloud Service, the university has reduced by 60% the time it takes to produce monthly and quarterly reports and forecasts for revenue, human capital, scholarships, operating expenses, capital expenditures, financials, and budget execution.

According to Rajecki, an increasing number of the world’s colleges and universities, many of which have been educating students for 100 years or more, are now facing their uncertain financial futures on firmer footing.

“The fact that many university presidents have acknowledged that there’s a financial problem, and are using technology to address it, gives me comfort in the financial sustainability of higher education,” he said. “Higher ed is on the right track.”

Linda Currey Post covers science and technology advances as a senior writer at Oracle.

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