Enterprise Planning—Take the Reins

Most institutions and their vendors are still framing technology conversations around transactions, analytics, and user experience: better HR, cleaner financial reporting, faster close, fewer manual touches. That work matters, but it is not the operating capability that will differentiate institutions in our current climate of volatility as a constant.

Over the next five years, the capability that will matter most is the one that most institutions rarely demand and vendors rarely deliver as a packaged outcome: enterprise planning.

Enterprise planning goes beyond financial planning and budgeting as it encompasses operational planning into a single practice and toolset. Enterprise planning is an operating model: a connected, institution-wide system that detects change early, runs scenarios fast, and coordinates action across finance, HR, enrollment, academic planning, facilities, advancement, and IT.

Uncertainty is not going away. I can’t see the chaos of the last six years easing up anytime soon. Treating volatility like a temporary anomaly or a periodic exercise is how institutions lock themselves into incremental thinking at exactly the moment they need a better decisioning model.

Mature enterprise planning is about preparing for what you cannot predict. But getting there is not a “buy a tool” story. It’s a behavior change in which institutions must treat planning as enterprise governance, not a finance exercise.

The Maturity Roadblock is Cultural, Not Technical.

Many institutions are boxed in by decades of choices: inconsistent foundational data, decentralized definitions, process drift, shadow systems, siloed planning, and weak data and technology governance. Those gaps create a hard ceiling.

You can modernize user experience. You can automate workflows with a modern ERP. You can build respectable analytics with coherent data management. But you cannot do enterprise planning at scale without trusted inputs and a campus culture that requires cooperative planning.

Enrollment planning drives the revenue model. Facilities planning responds to enrollment, athletics strategy, and the realities of existing space, maintenance, and condition. Few institutions can connect those models and quickly map the impact of policy shifts, macroeconomic events, or rapid strategic pivots. It’s not that the institution doesn’t have planners, it’s that the institution doesn’t have a connected enterprise model.

Modernization is Still Oversimplified.

One of the biggest missed opportunities over the many decades that I’ve been in higher ed tech is that institutions have expected to design critical processes from scratch. Financial planning has been one of the last to come out of that delusion. We’re finally seeing transactional systems adopted with best-practice processes on configurable solutions. But we’re not yet frequently adopting connected, delivered operating models built on these systems, which would enable enterprise planning practices at scale.

Traditional planning models explain what happened and what will happen if conditions remain stable or change in response to a set of historical drivers. Enterprise planning answers what to do across the enterprise when conditions change. This, however, requires connected planning models across finance and operations, where new drivers can be added across the enterprise as conditions change.

Planning is a Governance Decision

Enterprise planning forces questions higher education loves to defer:

• Who owns institutional definitions, and who enforces them?
• Which processes must be standardized to enable cross-functional coordination?
• Where do we trade local control for institutional performance?

This is why planning is so often underbuilt. Institutions sense, correctly, that enterprise planning changes structures, processes, and decision rights. Domain experts can do solid local planning with local tools, given the inputs they have. But the annual spreadsheet shuffle is not enterprise planning. The question is how to connect those models and run the institution like a system.

Build for Uncertainty

Higher education has spent years narrating uncertainty like it’s a unique burden. It isn’t. Every sector is dealing with volatility. The difference is that most industries have built planning models that respond in near real time. Higher education hasn’t. Institutions that keep treating planning as a finance function will keep getting surprised. Institutions that treat planning as an enterprise capability will start seeing around corners.

We’re an unusually complex industry with widely varying revenue sources and complex expense models – but the tools and techniques exist to model this complexity. Our upcoming research on financial planning and analysis tools will help illuminate where this capability exists.

The need for enterprise planning is starting to show up in RFP language and market activity: institutions are increasingly asking for connected planning across finance, enrollment, workforce, and space, with a clearer expectation that planning is continuous and cross-functional.

What Should Institutions Do Next?

Let’s look at concrete steps you can take in the near term to shift thinking on your campus:

• Reframe assumptions and drivers. Treat assumptions as living inputs. When conditions change, refresh them and rerun scenarios fast enough to influence decisions, not just explain outcomes. Consider new drivers when conditions change radically.

• Close data gaps. Invest in data management and governance so planning models have trusted inputs. For many institutions, that includes hard decisions about the administrative stack when the current environment cannot support consistent definitions and cross-functional planning. It also includes reaching deep into operational units to align data models with the center. Use revenue and expense prediction as the driving force in mapping data and processes.

• Rethink selection criteria. Evaluate administrative platforms and planning tools based on their ability to support connected, enterprise planning, not just transactional execution. To be clear, FP&A tools do not have to be part of a consolidated ERP platform, but pre-integration provides some value. Finding the right tool and the right models for your institution generally outweighs pre-integration.

Next time, we’ll talk about what the vendor community needs to bring to the table to support institutions that are ready to make the move to enterprise planning.

Is your institution planning to make this move? What have the pitfalls been?

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Originally posted by Dave Kieffer on LinkedIn. Be sure to follow him there to catch all his great industry insights.