Higher education is currently operating in a fraught environment. At the start of November, the Independent discovered three universities in England are facing significant financial difficulty, using bridging loans to avoid going into administration. The news was quickly followed by a bracing statement from the chair of the Office for Students, Sir Michael Barber, who stressed that under no circumstances would bankrupt universities be bailed out by the tax payer.
Fuelling the fire is an uncertain outlook for traditional higher education funding. An overhaul of the tuition fee system in England and Wales is being mooted, and it’s likely the impact of Brexit will mean universities will need to account for a fall in the financial contribution of students and research grants from the EU. This pressure means a university’s ability to compete for students, both in the UK and on an international stage, is now even more important. Today’s higher education leaders must think innovatively if they’re going to generate the funds needed to invest in facility improvements and provide an attractive student experience.
Back office efficiency, powered by the latest technology, is one way for universities to unlock the capital they need to do this, without relying on external fundraising. Take invoice processing, for example. It is a critical component of any back office that can be made radically more efficient through automation. Automated invoice processing (IP) captures, encodes and validates invoices in both paper and electronic formats, automatically matching them against purchase orders without the need for manual processes. It reduces operational costs, but also improves the accuracy, speed and quality of the back office as a whole. Ultimately, this efficiency can help universities get paid faster and generate the cashflow they need to unlock investment.
However, our own research has suggested that not enough universities are alive to the benefits new technology such as this can have in the back office. Earlier this year we spoke to 56 of the UK’s higher education institutions, asking them if they had an automated IP solution in place. We discovered many were missing a valuable opportunity to increase efficiency, with only 25 per cent of the universities surveyed taking advantage of a fully automated IP solution.
When questioning why certain universities are behind the curve, it’s important to remember that any reluctance to implement new ways of working will be specific to each organisation. But, saying this, there are some interesting considerations we can make on the back of our findings. None of the institutions we surveyed with more than 30,000 pupils has a fully automated IP solution in place. This compares to the 27 per cent of universities with between 10,000 and 20,000 pupils that told us they had implemented one, suggesting size could be a factor. And while it’s true more substantial IP functions require more work to automate, they can also deliver even greater savings – funds that can be re-invested, helping universities strengthen their market position and gain an edge over competitors.
Perceived complexity and cost is another commonly cited obstacle to innovation, which is why universities exploring new technology, such as automated IP or any significant programme of back office transformation, should work with a partner with the right experience and expertise. A partner will be able to advise on a cost-effective solution that complements existing systems and provide support through the entire lifecycle of the project.
The challenges facing higher education will continue to evolve, but what’s certain is the sector’s leaders should be exploring every opportunity to maximise revenue and unlock the capital needed to invest in the future, whether that’s in better student experience, facility upgrades, or education and research.