Higher Education

Improving the resource allocation process in Higher Education

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Resource allocation in higher education is when funds are put towards the programs that assist colleges and universities in achieving their academic mission. The budget represents how a school is planning to spend funds on expenditures that contribute to the success of its strategic plan, but when schools use the same resource allocation system for years because it simplified their process, are colleges and universities truly optimizing their funds? According to the 2017 Inside Higher Ed Survey of College and University Business Officers, half of business officers said their school “has significantly modified its budget model in the last four years.” While there is no ideal model for allocating resources, colleges and universities who rely on a static process limit their ability to adapt to change. Improving the resource allocation process so that it is effective and equitable, and takes into account the school’s long-term objectives, will put schools in a better position to weather economic instability and take advantage of new opportunities as they arise.


An effective resource allocation process can result in the school sharing information across faculties and departments enabling better decision-making and a more efficient use of resources. Additional benefits of improving the resource allocation process include:


  • Facilitates two-way conversation between departments and administration.
  • Promotes a greater understanding of the school’s strategic priorities and mission.
  • Converts short and long-term goals into effective management and operational plans.
  • Results in the creation of policies and procedures that better align strategies with available resources.


Although most colleges and universities allow for some flexibility in their resource allocation decisions, the key is finding a balance between putting resources towards programs with higher enrollment revenues and programs that provide strong academic and research outcomes. This effort has led school decision-makers to centralize control over resources and favor incremental line-item budgeting as an allocation system. Incremental line-item budgeting takes the previous year’s budget and increments or decreases sums associated with particular line items of expenditures. While it may simplify the allocation process for schools, this static system doesn’t allow institutions to anticipate change or adapt to shifts in economic conditions.


Even when colleges and universities pair incremental line-item budgeting with other methods or adjustments, the process only focuses on short-term, year-to-year allocations. To optimize the decreasing amount of funding they receive, higher education schools need to create a process that takes into account the school’s long-term vision for better planning and decision-making.


To improve their resource allocation process, colleges and universities can:

  • Examine the overall mission of the school, develop a strategic plan with measurable goals and outcomes, and then determine the resources needed to achieve the plan.
  • Create a decision-making structure that involves the participation of all academic units and seeks consensus to make decisions.
  • Review all programs on a regular basis for their quality in relation to both enrollment revenues and academic and research value when aligned to the school’s mission, and the adequacy of the resources allocated to those programs.
  • Include in the allocation process a review of alternatives, such as resource substitutions.

Budgeting and allocation processes that colleges and universities have used for years will not be effective if they want to optimize the decreased amount of funding they receive. With increasing financial pressures, shifting enrollment rates, and changing student and workforce needs, colleges and universities need to modernize their resource allocation process. Improving the process will require creating a strategy that aligns with the school’s mission. By enhancing their resource allocation process, colleges and universities can find new ways of efficiently allocating funds, strengthen data-based decisions and improve communication and collaboration with faculty and staff leading to better engagement with students and other stakeholders.


A multi-user, dynamic budgeting software solution like Questica Budget Suite can help colleges and universities transition from a top-down allocation system to a more efficient and collaborative process. With financial information located in one place, schools can prepare operating, salaries and capital budgets, plus analyze, forecast and report on the budget. When you are ready to transform your higher education budgeting process, Questica can help your school align its goals and priorities with their resource allocation process and optimize funds that contribute to the success of their academic mission.


To learn how Questica Budget Suite can help your college or university improve your resource allocation process and further advance your mission, sign-up for one of our webinars.


For over 20 years, Questica been working with colleges and universities, government agencies, healthcare, K-12 schools and non-profits – to better enable data-driven budgeting and decision-making, while increasing data accuracy, saving time and improving stakeholder trust. Our customers are using our Questica Budget suite to drive budget transformation by creating a single source of data truth. Over 700 organizations across North America in 47 states and 11 provinces/territories have eliminated spreadsheets opting for smarter planning, budgeting, performance measures, management, reporting, transparency and engagement with our software solutions. To learn more about Questica and how our software solutions can help your college or university – check out our resources and news/blog sections, or request a demo today!