Public Sector Planning:
Successful Finance Transformation at Drexel University
2013 NACUBO Planning and Budgeting Forum
Hyatt Regency Atlanta – Atlanta, GA
Speaking Session: 2:45 – 4:15 pm EST
September 16, 2013
Speaker Introductions
Nicole Ferretti
Associate Vice President, FP&A
Drexel University
CONFIDENTIAL
For Discussion Purposes Only
David Felsenthal
Wayland Ng
Director, Higher Education
Blue Stone International
Manager, Higher Education
Blue Stone International
Agenda
I.
II.
III.
IV.
V.
VI.
Overview of Drexel University and Blue Stone International
Drexel Prior State Planning Process
Integrated Planning Best Practices
Drexel Current State Planning Process
Drexel Solution Demonstration
Q&A
CONFIDENTIAL
For Discussion Purposes Only
I. Overview of Drexel University & Blue Stone International
CONFIDENTIAL
For Discussion Purposes Only
Introduction to Drexel University
• Founded in 1981 and located in Philadelphia, PA
– Three Philadelphia campuses and other regional sites
– Drexel University Sacramento
– The Academy of Natural Sciences of Drexel University, the nation’s oldest
major natural science museum and research organization
– International research partnerships including China and Israel
– Drexel Online, one of the oldest and most successful providers of online
degree programs
• Comprehensive global research university ranked among the top 100 in
the nation
• With approximately 25,000 students, Drexel is one of America’s 15 largest
private universities
• Approximately 200 degree programs, 14 colleges and schools
• Financial Highlights: $900 Million Operating Budget, 1.7 Billion in Assets
CONFIDENTIAL
For Discussion Purposes Only
Introduction to Blue Stone International
Services Include:
Long Range Planning
M&A
Stochastic Analysis
Profitability Analysis
Treasury/Capital Modeling
Tax Modeling
Impairment Testing
Strategy
Management
Planning &
Analytics
Services Include:
Operational Budgeting
Rolling Forecasts
Position Budgeting
Capital Planning
Project Planning
Profitability & Analytics
Cash Flow Forecasting
Data
Relationship
Management
Services Include:
Driver Analysis
Process Improvement
Initiative Assessments
Project & Process Roadmap
Key Performance Indicators/Chart
of Accounts Analysis
CONFIDENTIAL
For Discussion Purposes Only
Advisory &
Industry
Financial
Consolidation
& Reporting
Services Include:
Consolidations
Financial Close
External (XBRL) Reporting
Account Reconciliations
Enterprise Migrations
II. Drexel University Prior State Planning Process
CONFIDENTIAL
For Discussion Purposes Only
Drexel University Planning Process
Prior State & Challenges
• Replace home grown budget systems
– Web Budget – operating budget system
– Web Merit – merit increase planning system
• Implement a more user-friendly budgeting tool
– Improve, automate, and streamline process for collecting budgets and reporting of
results
• Improve reporting quality, capabilities, and analytics
• Implement new process for reallocating existing budget vs. new funding
requests (ongoing vs. one-time)
• Ability to link documentation and add comments to justify new funding
requests
• Create flagging for expense variance to proactively manage spending
• Ability to run what-if scenarios to stress test budget
• Ability to track budget versions throughout budget process
• Integrate Operating and Salary Budget process into one common system
CONFIDENTIAL
For Discussion Purposes Only
Drexel University Planning Process
Prior State & Challenges
Strategic Planning Needs
• Long-range planning model did not exist at Drexel
– Needed a long range strategic outlook
• Implement a robust, driver-based 10-year forecasting tool with scenario
modeling capabilities to run what-if analysis on full financial statements
and metrics
• Needed a tool that was user-friendly and easy to use with financial
intelligence/accounting integrity
• Needed a multi-year forecast for stress testing bond covenants and assist
with debt issuances/refinancing
• Integrate and align the operational budgeting (short-term) and strategic
planning (long-term)
CONFIDENTIAL
For Discussion Purposes Only
III. Integrated Planning Best Practices
CONFIDENTIAL
For Discussion Purposes Only
3 Dimensions of Integrated Planning
Activity
P&L
Balance
Sheet
Cash
Flow
Treasury
Endowment
People
CFO
FP&A/
Budget
Office
Deans,
Provost,
Academic
VPs
Cost Center
Budget
Managers
1 yr
2 yrs
3 yrs
Time
CONFIDENTIAL
For Discussion Purposes Only
4 yrs
5 yrs
Align the Integrated Planning Process
Strategic Planning
Multi-Year
Forecast
Treasury
& Debt
Strategic
Project /
Initiatives
Hyperion Strategic Finance
Seed Budgets with
Strategic Targets
Operating
Budget
Hyperion Planning and Public Sector
Position / Salary
Budgeting
Grant
Management
Planning, Budgeting and Forecasting
CONFIDENTIAL
For Discussion Purposes Only
Endowment
Management
Update
Strategic Plans
with Annual Budget
and Latest
Forecasts
Capital
Planning
Excel Spreadsheet Challenges
Current State
Challenges
Data Manipulation
Need to manually pull, manipulate, consolidate, and
report data in Excel - error prone
FP&A/Budget
Capital
Planning
Treasury /
Endowment
Division 2
Division 1
Division 3
College 1
CONFIDENTIAL
For Discussion Purposes Only
Multiple Calculation Logic Sets
Various drivers and calculations across all models
Accounting Integrity Questions
System controls model integrity are difficult
Manual Integration with Source Systems
Models are not linked to all source systems; difficult to
model on most recent available data
College 2
Department 1
Constrained Scenario Analysis
Limited what-if analysis available to analyze full
financial statement impact of sensitivities and growth
strategies
College 3
Department 2
Department 3
Disjointed Planning Process
The Budget must be linked and aligned to the overall
strategy of the university
Strategic Issues in Higher Education
Financial
• Revenue Stream Constraints
– Tuition Increase
– Endowment returns/volatility
– State appropriations
– Fund raising
• Budget Constraints
– Doing more with the same, or even less
– Resource Capital Allocation
• Cash and Liquidity Constraints
– Debt Issuance/Cash management
– Covenant compliance – rating agencies
Process
• Alignment between the 1-year budget to the 5-year strategic plan
• Salary Planning (Position Budgeting) integrated with Operating Budget
• Need process to efficiently run what-if scenarios - use data and analytics to drive decision making and proposals
• Change Management – drive culture change throughout the organization
CONFIDENTIAL
For Discussion Purposes Only
IV. Drexel University Current State Planning Process
CONFIDENTIAL
For Discussion Purposes Only
Drexel University Planning Process
Current State & Improvements
• Integrated Planning, Budgeting, and Forecasting solution using Oracle’s
Enterprise Performance Management (“EPM”) applications
• Modules
–
–
–
–
Hyperion Public Sector Planning & Budgeting
Hyperion Planning
Hyperion Essbase
Hyperion Strategic Finance
• Reporting Tools
– Smartview
– Hyperion Financial Reports
CONFIDENTIAL
For Discussion Purposes Only
Drexel University Planning Process
Current State & Improvements
• Operating Budget, Salary Budget, and Multi-Year Forecast integrated into a
common modeling environment
– Salary Budget Module feeds Operating Budget Module
– Budget feeds multi-year forecast
• More transparency into budget process
–
–
–
–
New Requests vs. Reallocation
New Requests further broken down by One-Time vs. Ongoing
Link Documentation to new requests
Attach comments and Supporting Detail
• More end user-friendly budget experience
– Web Based Submission forms
– Task Lists
– Security
CONFIDENTIAL
For Discussion Purposes Only
Drexel University Planning Process
Current State & Improvements
• Reporting
– Pre-built and defined reports out of Hyperion Financial Reports
– Ad-hoc reporting capabilities in Smartview
• Multi-Year Forecast (10-year Long Range Outlook)
–
–
–
–
Driver-Based Model
Integrated GAAP Financial Statements including Endowment and Debt
What-if Scenario Modeling and Sensitivities
Key Metrics (S&P, Moody’s, and Internal KPI’s)
• A custom metadata and data integration solution between Hyperion Tools
and Banner ERP system
CONFIDENTIAL
For Discussion Purposes Only
Drexel University Planning Process
Future Improvements & Vision
• Continue to standardize and streamline overall planning process
• A move towards Responsibility Center Management (RCM)
– Each college has its own P&L (Revenue, Expenses, and Margin)
CONFIDENTIAL
For Discussion Purposes Only
V. Drexel Solution Demonstration
CONFIDENTIAL
For Discussion Purposes Only
Drexel Solution Demonstration
• Banner Integration Overview
– Metadata
– Data
• Salary Budgeting Model (Hyperion Public Sector Planning and Budgeting)
– Position Budgeting
– Merit Increase
– Fringe Benefits
• Operating Budget Model (Hyperion Planning)
–
–
–
–
Task List – guide users through budget process
Web Form – for budget data submission
Management Reporting
Ad hoc reporting and analysis
• Multi-Year Forecast Model (Hyperion Strategic Finance)
–
–
–
–
–
Consolidation Structure
Reporting
Forecasting
Debt Issuance
Scenarios and Analytics
CONFIDENTIAL
For Discussion Purposes Only
Q&A
CONFIDENTIAL
For Discussion Purposes Only
Contact Information
Nicole Ferretti
Associate Vice President, Drexel University
Philadelphia, Pennsylvania I USA
Office
Email
+1.215.571.4331
[email protected]
David Felsenthal
Director, Blue Stone International, LLC
Chicago, Illinois I USA
Office
Mobile
Email
+1.866.224.2841 x107
+1.773.540.1002
[email protected]
Wayland Ng
Manager, Blue Stone International, LLC
Chicago, Illinois I USA
Office
Mobile
Email
CONFIDENTIAL
For Discussion Purposes Only
+1.866.224.2841 x112
+1.708.951.2828
[email protected]