Why Is AI the Best Thing to Happen for Higher Education Finance?

In recent years, the integration of artificial intelligence (AI) into various sectors has transformed operations – improving efficiency, accuracy and decision-making processes. One area that holds significant promise is AI for higher education Finance. With the ever-increasing complexities and challenges universities and colleges face, the responsible use of AI presents an opportunity to streamline operations, empower data-driven insights and enhance budgeting and planning.

Finance leaders approach the idea of integrating AI into higher education with a mix of excitement and cautious optimism. For example, over half of Finance leaders already envision AI becoming a core component of financial processes; a staggering 79% of Finance decision-makers also believe AI will increase productivity by increasing efficiency and improving accuracy in business processes. These potential benefits in higher education could reshape financial management practices and unlock innovation opportunities.

How Does AI for Higher Education Finance Add Value?

AI in Finance is not about replacing human intelligence but about enhancing it. As a result of AI automating repetitive and time-consuming tasks, Finance teams can focus on more strategic activities. For instance, AI-powered tools can automate planning, data entry and routine financial reporting – freeing up valuable time for analysis and decision-making.

Let's dive into three ways that AI for higher education Finance offers significant value:

• Streamlining financial operations
• Empowering data-driven insights
• Enhancing budgeting and planning

1. Streamlining Financial Operations

An increasing concern for many institutions is simplifying processes and reducing costs. In fact, EDUCAUSE highlights the need for institutions to take significant steps forward to reinvent university operations and greatly lower costs as a top area of focus. So how can institutions make substantial improvements?

AI is one impactful way to simplify and standardize processes, data and technologies.

Gone are the days of manual data entry, cumbersome consolidation processes and tedious spreadsheet analysis. Instead, AI's ability to automate routine financial tasks and process vast amounts of data allows for the identification of patterns and anomalous data points. This ability facilitates exception handling for Finance processes, such as planning, maintaining data quality and reporting.

As a result, Finance teams can streamline operations and focus on exceptions – rather than sifting through entire datasets. The approach ultimately saves valuable time and enhances the efficiency of financial processes.

2. Empowering Data-Driven Insights

Another top priority for higher education leaders is improving data-driven insights and analytics throughout the institution. According to a Chronicle of Higher Education survey, 97% of college administrators believe that higher education needs to better use data and analytics to make strategic decisions.

Colleges and universities generate vast amounts of information – including Finance, HR and Student data – but struggle to leverage it. By helping institutions leverage that information, AI empowers Finance teams (see Figure 1). An AI platform can bring together data and help teams gain new insights into Finance and Student outlooks.

AI algorithms can analyze an institution's data in real time, uncovering valuable insights and trends that inform strategic decision-making. With predictive analytics that forecast future financial scenarios, Finance teams can proactively plan and allocate resources effectively to create optimized student outcomes.

Harnessing the power of data-driven insights thus empowers Finance teams to make informed decisions that optimize financial performance and support institutional goals.

3. Enhancing Budgeting and Planning

AI can also provide significant enhancements to the tedious planning processes at universities and colleges. Traditionally, Finance planning methods often rely on historical data and assumptions, leading to inaccuracies and limited predictive capabilities.

AI instead enables Finance teams to move beyond historical reporting and embrace machine learning (ML). By leveraging ML algorithms, Finance can analyze historical financial data alongside external factors, such as market trends, student behavior and economic indicators.

These algorithms can identify hidden patterns, uncover non-linear relationships and generate more accurate forecasts. In essence, those trends then help institutions make informed financial decisions (see Figure 2).

For example, AI can analyze market demand, retention rates, student preferences and academic performance to model recommended tuition and fee pricing adjustments. Those capabilities maximize revenue while maintaining affordability and competitiveness. As a result, Finance can better support student needs, optimize resource allocation and mitigate financial risks.

How Should Higher-Ed Finance Leaders Look to Incorporate AI?

With operational changes on the horizon, higher education leaders must strategically plan their next steps for AI integration. The successful implementation of AI for higher education Finance requires careful planning and investment in infrastructure and training. But when Finance employs the right practical AI strategy and commitment to innovation, AI has the potential to revolutionize financial operations in higher education.

Ultimately, the right strategy paves the way for more sustainable, efficient and student-centered financial management processes.

Conclusion

AI represents an exciting shift for higher education Finance teams, offering unparalleled opportunities to streamline operations, unlock insights and enhance strategic decision-making. By embracing AI technologies, Finance teams can navigate the complexities of financial management with agility, resilience and innovation.

Learn More

Learn more about how OneStream's Finance AI uniquely empowers higher education Finance teams to enhance planning, gain new insights and streamline Finance processes.