Use and effects of an interactive financial planning system on the strategic financial planning process of a private university
Harvard University, PhD Thesis, (1990)Abstract
Increasing financial constraints faced by postsecondary institutions in the last fifteen years prompted the need for systematic long-range planning in the allocation of institutional resources. Rapid advancements in computer technologies applied to educational planning led to the development of many computer-based financial planning systems. Institutions of higher education seem to adopt one system only to trade it very soon for the latest state of the art development without providing the conditions or the time necessary to evaluate the effects of its use. The literature on financial planning systems in higher education has singled out the effects of long term use as one area where further research is needed. This case study analyzes the use and effects of the Interactive Financial Planning System (IFPS) at a private university–Saint Mark's University (SMU)–which for nine years has used the system as a modeling tool to project its financial situation over time. The main question of the study, how has the use of IFPS affected the strategic planning process at SMU? implied many specific questions regarding the integration of the long-range financial planning model developed in IFPS into the broader institutional planning process. The study shows that the long-term use of IFPS at SMU has developed attitudes and habits that have positive effects on the planning process. Improved capacity for analyzing the consequences of alternative courses of action and better communication among decision makers are two of several important results of using a computerized planning system. Efficient use of this sophisticated planning tool has been facilitated by a combination of managerial and technical expertise. Most important to prepare a propitious context for planning has been the strong support given by the president of SMU to academic long-range planning. However, this research indicates that financial and academic planning processes are not yet effectively integrated. A more systematic and continuous evaluation of the impact that shifts in external trends may eventually have on academic goals and programs is needed. The paper suggests that once the academics are able to control the academic planning process, they will be in a better position to influence resource allocation decisions. This study of long-term use of a computerized planning system provides university managers–who use systematized modeling or who are considering its incorporation in their institutional financial planning–insights into planning and management issues that need to be taken into account if the modeling process is to be successfully integrated into the broader planning process of the institution.