Financial Frailties: How Unified Communications can Solve Higher Education’s Budget Crisis

'Higher education is vital for Britain'

Lord Knight of Weymouth's words before the House of Lords in March 2023 was part of a wider discussion on the state of university finances, asking his peers the simple question 'what is going on?'. He advocated for 'innovation and change… to give confidence to the sector'; a sector that must stay operational to inject 'talent with strong cognitive and collaborative ability' into the UK's labour pool.

So, to echo Lord Knight, what is going on?

27% of publicly funded providers are now in deficit, with experts predicting in May 2024 that, by the end of 2023/24 academic year, that would rise to 40%. It's an alarming development, and with more institutions facing closure, it's integral for the sector to start exploring ways to cut operating costs and allowing university staff to improve their overall operational efficiency.

Unified communications can help to provide a clear avenue towards financial sustainability, with an all-in-one solution providing a new way for universities to operate by cutting hardware costs and streamlining communications. Technology infrastructure expenditure across UK universities has been estimated to be £1.3 billion, and with a solution like this in place, higher education institutions can find a more cost efficient way to manage their communications.

The financial field of play

Despite 3 UK universities occupying a place in the global top 10, each one faces their own set of challenges, particularly around funding and financial stability. This problem is the result of numerous factors, including:

• Capped student fees, which rose to £9250 in 2017, and their declining value in the face of rising inflation
• Declining application rates from UK-based students, with only 7% of 18-year-olds applying for an undergraduate course
• Steadily increasing operating costs, including staff wages and infrastructure maintenance, during the ongoing cost of living crisis that has left 91% of students ' either somewhat or very worried'
• A fall in the number of international students, with these fees worth £11.8bn in the 2022/23 academic year

Over 50 universities have started to conduct redundancies and course cutting to manage their finances. While older institutions and Russell Group universities can fall back on their esteemed reputation, post-1992 universities face a tougher challenge when trying to get their finances under control. While some policy experts may think that "all everyone can do now is brace", technology can give universities the platform to maximise their existing budget, manage operational costs, and make processes more streamlined and easier to maintain. One of the ways to achieve these goals is through Unified Communications as a Service (UCaaS).

A quick lesson on UCaaS

UCaaS refers to the integration of numerous communication tools, including email, instant messaging, and voice and video calls, into a single platform. These solutions are rapidly growing in popularity, with the global market set to reach $107.51 billion by 2032. Providers administer this technology through the cloud, with dedicated specialists working hard to maintain the performance of each platform.

One of the major pulls of UCaaS solutions is their cost-efficiency, which certainly looks desirable to universities struggling to stay financially stable. But how exactly do these solutions remove financial barriers and combat that looming fear of collapse and closure?

Replacing outdated systems

Many higher education institutions still rely on an outdated technology infrastructure to manage their administrative tasks, including student enrolment, finance, and maintaining student data. The average IT department could use 55% of its technology budget on maintaining such systems, diverting much-needed resources away from being able to enact digital transformation.

Back in the day, those same systems were more than capable of handling large swathes of data and keeping things ticking over. Yet the siloed nature of legacy technology means it can't match today's digital expectations, and the upkeep on using so many different services start to build up over time.

Operating digitally, the cloud eliminates the need for costly on-premise systems that require continuous hardware upgrades and constantly consume power. After moving to the cloud, nearly 80% of IT leaders reported that they're now saving money, showing how adopting a unified communication solution can really make a financial difference. Considering the estimated cost of decarbonising the sector stands at £37.1bn, it's definitely a step in the right direction.

The move to the cloud is an exciting prospect for everyone, with the removal of upfront costs and the freeing up of vital resources motivating higher education institutions to put their legacy technology out to pasture. For universities, this is just the first step on the way to reducing financial pressure through unified communications.

The power behind data-driven decisions

Tightening budgets and falling revenue means resource allocation within higher education institutions is a must. The existence of complex data sources, however, means universities are hindered in making more informed decisions and improving their basic operational capabilities. A fragmented approach to data can accumulate costs of $12.9 million, with universities struggling to bring all that data together and make sense of it.

UCaaS platforms can collect data that measures key performance metrics, such as peak usage times and which features are utilised most frequently. These insights can dictate how resources are allocated, with any redundant or legacy tools being phased out to assist with ongoing cost-cutting measures. Unnecessary expenditures can be eliminated while simultaneously improving operational efficiency.

A greater understanding of how resources and communication features are being used can give universities the ability to develop best practices right across the university. Identifying successful communication instances can create a more complete way of how best to communicate, especially with inquisitive students looking for answers and help at a moment's notice.

Despite 'over a quarter of the sector' confirming staff redundancy programmes to better manage their finances, unified communications can help leaders gain greater control over the long-term budget. These systems can provide historical data, and any trend insight is an integral feature that can help universities predict where future costs will arise. This will further improve how the overall financial strategy is planned, which will help to achieve long-term sustainability through a more constructed budgetary plan.

Data's real power lies in its ability to assist in resource allocation and in-depth budget planning. With in-depth data insights to call on, universities are one step closer to achieving financial stability.

A more efficient way to communicate

When it comes to inefficiencies in the workplace, 86% of executives highlight the lack of effective collaboration and communication. That same challenge can be attributed to higher education institutions, where streamlined processes are crucial to process student information and queries. With enrolment rates dropping rapidly, student numbers will continue to fall, especially if students aren't even getting support for applications from the start.

No students, no fees, no funding - it's as simple and terrifying as that.

Over 90% of vice-chancellors have put improving staff and student experiences at the top of their priority lists, which can't be achieved without digital transformation. Unified communications are a major step in this transition, with the consolidation of channels and tools lowering the amount spent on using and maintaining each separate system. The financial strains can be eased, while staff can benefit from spending too much time on burdensome administrative tasks.

86% of students agree that a good digital experience can build a stronger student community, showing why seamless digital experiences are a necessity. An integrated communication solution can be used for both academic and administrative purposes, ultimately providing an easier way to learn and manage their educational journey. Satisfied students are more likely to complete their course, which is crucial considering the drop out rate has slowly increased to 6 in every 100 students.

When less time is spent on administrative tasks, then university staff can place more focus on core activities and enjoy greater operational efficiency. Key decision-makers won't need to devote more resources and capital to improving that overall efficiency and take a huge step towards financial stability.

Finding your financial feet

Budgetary restrictions are a common challenge facing public sector organisations, but in higher education that challenge is a matter of importance. Technology opens the doors for universities to create financial stability and continue to provide essential educational services to the general population. With firm foundations in place, universities can build towards further success.

By opting for a unified communications solution, universities can start to alleviate their financial concerns, while also being able to communicate in a more streamlined, optimised manner. Consolidating communication channels into a single platform eliminates the need to continuously upkeep multiple avenues and cut down on any unnecessary costs. Data-driven insights can influence how best to manage resources and make all aspects of administration far easier to process. Indeed, when staff can communicate more effectively, that process can reach higher levels of productivity and combat any further questions over student and staff satisfaction.

While higher education institutions may still face an uphill struggle with their finances, providers like Gamma are dedicated in helping institutions find that financial stability. As Lord Knight of Weymouth said, this vibrant and important sector must be allowed to 'continue to pursue excellence… and that requires a solid financial foundation'.

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