Leadership Considerations for Selecting a Budget and Planning Tool

As a new budget season approaches, how an institution plans for and executes a new annual budget is top of mind. Over the past several years, the selection and implementation of new, cloud-based budget and planning tools have increased. CIOs can answer key early questions to help prepare their institutions to modernize their budget and planning software tools.

Getting Started on the Right Foot

There are many factors to consider when it comes to the annual budget and long-range planning. Getting started on the journey of budget modernization can often feel overwhelming to CIOs and their applications teams, as they are less familiar with financial practices. However, answering these key questions will create a strong foundation for project leaders.

What are your institution’s key pain points?

It is vital for CIOs to understand what primary problems a budget and planning tool is solving. Often, the best way to answer this question is to spend time in conversation with campus financial leadership and personnel. Engaging with campus stakeholders early and often will provide strong guidance for selecting the best tool and identifying key configuration considerations.

Some common pain points may include:

• Juggling multiple Excel sheets with no single source of truth
• Version control issues
• No way to accommodate a high number of planning participants
• Lack of reporting capabilities
• Difficult to quickly address changing campus needs

What will be the role of executive leadership or governing bodies?

Most budget and planning software projects are sponsored by executive leadership in financial administration. Early in the process, CIOs should outline how active the project sponsor prefers to be. Some sponsors choose to be highly active by regularly attending meetings, speaking with constituents and vendors, and playing a role in selection. Others prefer to come into the process near the end of the selection.

It is also critical for CIOs to know how an institution’s governing board or committee will participate in the software assessment and selection process. Some boards may choose to participate in vendor demos; others prefer to be notified of the final selection. Identifying these expectations before you begin your process will ensure that all voices are heard and accommodated.

What solution features are must-haves or wish-list for your institution?

There are many options for modern budget and planning tools. To help frame which vendors are likely to be the best fit for your institution, CIOs should create and maintain a list of features that must be present. Often, these needs will come from initial conversations with financial leadership; however, be sure to also speak with multiple end-users to create a holistic picture of need.

Most solutions in this space offer similar core functions that include the following:

• Annual budget management
• Annual financial planning
• What-if scenario modeling
• Long-range financial planning

Identifying your institutional needs beyond core functions will help guide your assessment and selection process. It is also beneficial to identify what features will also address primary pain points.

In addition to current must-have features, CIOs should encourage campus constituents to consider aspirational features that support future institutional goals. These features should comprise your feature wish list and will help future-proof your software investment.

What are your selection considerations beyond the feature set?

While features are significant when selecting a tool, institutions should consider several other factors before embarking on the selection process.

• Vendor higher education experience. Higher education budgeting and financial planning are unique. Selecting a vendor with substantial higher education experience is more likely to implement successfully.
• Integrations. Create a list of critical integrations to ensure they are all addressed during your assessment and selection process.
• Number of users. Be aware of how many end users will need system access.
• System administration. Establish who will maintain the system post-implementation. At some institutions, system administration falls to finance, and at others, it falls to IT.
• Available campus resources. Assess the level of campus resources available to your implementation team. This will establish if a third-party implementation partner is needed.
• Cost. Pricing structures for budget and planning tools vary across vendors. Establish your campus’s desired total cost early to avoid tough conversations late in the process.

Now, more than ever, institutions are under incredible financial pressure. Campuses are facing enrollment pressure, increasing costs, and permanent operational changes due to the COVID-19 pandemic. Many campuses must modernize their budget and financial planning processes to ensure they have all the tools at their disposal to address these pressures. CIOs will be called on to assist with this process. By answering these initial questions, IT leadership will be well poised to help their campus embark on the journey to modernization on the right foot.