Florida International University BeyondPossible2020 Strategic Plan Financial Base/Efficiency Committee White Paper Objective The Financial Base/Efficiency Committee was charged with analyzing the suggested implementation strategies associated with recommendations 3, 4, 5, and 8 from the iREAL white paper. The Committee was to recommend to the steering committee which strategies should be adopted for implementation as well as develop action plans to complete them. The Committee is composed of a diverse group of professionals with extensive backgrounds, representing a wide range of areas in the institution. The list of members and their respective areas as well as the summarized recommendations from the iREAL white papers are listed below. The Financial Base/Efficiency Committee Members: Chair Barbara Manzano, Academic Affairs Co-Chair Aime Martinez, Business & Finance Jose Aldrich, College of Business Jerry Cohen, Community Juan Cueto, Advancement Carlos Flores, Human Resources Jeff Gonzalez, Office of Planning and Institutional Research Deborah Hasson, College of Education Yogi Hernandez, College of Medicine/Health Care Network Cem Karayalcin, College of Arts & Sciences, Department of Economics Liane Martinez, College of Medicine Mihaela Plugaresu, School of Hospitality & Tourism Management Dileep Rao, College of Business, Department of Management and International Business Marta Torres-Berlingeri, College of Arts and Sciences iREAL Recommendations 3, 4, 5, 8 3. Grow aggressively and strategically 4. Expand financial base through organizational efficiencies, diversification of revenue streams (including increased philanthropy) and incentive-based budgeting 5. Launch a synchronized communications campaign to elevate the FIU brand 8. Strengthen reputation as critical academic partner/ solutions center for the local marketplace and beyond Background In a new era of performance funding and increased uncertainty and accountability, the University needs to prepare to be nimble and resilient in how it responds to change. The funding gap will be larger or smaller depending on:  Continuation and amount of Performance Based Funding appropriated by the Legislature  FIU's ability to earn Performance Based Funding and identify new revenue streams  Ability to increase tuition, in particular undergraduate in-state tuition 1



Ability to create and sustain a culture of philanthropy

FIU needs to refocus and restructure in order to mitigate the impact of a funding gap. The committee focused on the following topics to develop its goals and strategies: proposing alternative revenue streams that benefit the university; identifying areas that will assist in ensuring FIU achieves performance expectations; highlighting opportunities for operational efficiencies and eliminating redundancies. The committee asked tough questions: Which activities and/or services are core to the university’s mission? Where can we do more with less? How do we incentivize colleges, faculty and staff and achieve a change in behavior? Where should we make investments? The committee identified six major goals, expected to increase the university’s financial resources, enhance partnerships, provide more opportunities for students and provide the community access to quality education and solutions by 2020. Goals: 1. 2. 3. 4. 5. 6.

Expand Financial Base via Organizational Efficiencies Institute Focused FIU Branding Campaign Enhance the Comprehensive Capital Campaign Develop and Implement Incentive Based Funding Model Maximize Revenues to Support Growth Grow Student Enrollments Strategically to 65K

1. Expand Financial Base via Organizational Efficiencies To achieve FIU’s aspiration of becoming a preeminent public research institution, FIU should review its central administrative support units to ensure that these services are being delivered in the most efficient and effective manner possible. A comprehensive review of its administrative organizations compared to industry standards and current best practices would be of great benefit. In some instances, this might result in hiring a third party to service activities that are not core to the university’s mission. Administrative inefficiency extends beyond central administration. FIU aspires to have efficient and responsive operations at all organizational levels. This requires identifying and removing bureaucratic obstacles; creating clearer lines of authority to facilitate more flexible, timely, and responsible decision making; and improve focus on end-user satisfaction. The goal is for information technology to provide reliable access to relevant, real-time information from authoritative sources. Facilities should meet the research, instructional, service, and clinical needs of the FIU community. FIU must also inculcate and reward a culture of operational excellence, collaboration, responsiveness, and accountability among the University staff. Strategies to improve University operations and identify efficiencies are listed below.

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Strategies 

Cultivate a culture of continuous improvement & collaboration. Continuous improvement is a cultural value that could unify an organization as large and diverse as FIU.



Systematically evaluate each major division that provides administrative services, identify cost-savings opportunities, redesign business practices and management structures to maximize efficiency, effectiveness and implement best practices.



Leverage technology, existing systems and platforms to eliminate redundancies and repair process breakdowns. Identify synergies and develop shared services with other SUS institutions such as the Florida Consortium of Metropolitan Research Universities.



Create a climate of accountability at all levels of the organization. Identify and address problematic structural silos in order to improve the strategic management of the institution.



Reexamine the possible consolidation of financial managers throughout the University in order to improve the operational effectiveness of our business offices.



Evaluate the adoption of an e-procurement system to reduce costs via competitive pricing and volume discounts with suppliers and streamlined procurement functions.



Evaluate establishing a wireless cellular strategy.



Centralize the reservation function of event planning and execution. The central system would handle all reservations, all technology infrastructure needs, charge market fees for services to recover costs and generate surplus.



Implement innovative space utilization methodologies and concepts based on real capacity for classrooms, and standardization of administrative space, offices, conference rooms, and lounges.



Evaluate university fee structures and related costs to ensure the university remains competitive in the market.



Identify non-mission critical activities and evaluate contracting with third parties to provide those functions.



Evaluate monetization of parking and housing systems to raise the capital investment dollars necessary for the expansion of the University and its future.

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2. Institute Focused FIU Branding Campaign Branding in higher education is about who we are, and is not limited to what a particular product offers the marketplace. An educational brand is often equated to an institution's academic reputation. A university brand should be synonymous with the institution's personality, aligned with its mission, and defined by its values. Perhaps the most significant benefit of branding in higher education is the focus it brings to an institution. A values-centric approach inherent in branding provides an institution with an anchor to guide responses to constituent needs and expectations. The brand is defined by where the institution's values and the constituents' expectations intersect. It serves as a lens to strategically focus the institution in the midst of shifting internal and external pressures and opportunities. The strategies below are aimed to increase the awareness and position of the FIU brand. Strategies 

Implement synchronized, strategic and focused FIU branding campaign to increase constituent engagement. The university must create a clear, compelling, consistent and powerful identity that will give FIU a competitive advantage. The brand must speak to the qualities that set FIU apart. The result is an effective brand that makes a positive first impression and creates a clear link from FIU to Miami, Florida’s promising future and communities around the globe.



Seek to understand our constituents’ needs via surveys, focus groups, observations and a review of historical data. This information will help in understanding constituents’ behaviors and highlight their needs and expectations of the institution.



Identify market segments that are highly valued by the institution and community. Define the characteristics of each segment, including motivators and barriers and develop a plan to further institution's objectives in those markets. Determine which brand attributes can overcome those barriers and satisfy the segment’s needs.



Align branding campaign with the ongoing FIU capital campaign. Leverage the enhanced FIU brand to realize the university’s vision for philanthropic transformation.



Use relevant brand attributes to effectively position the institution against its competitors. Focus on capturing niche markets and aggressively maintain the institution’s market share.



Differentiate FIU from competitors through relevant communications. Articulate preeminent programs to build on that excellence and distinguish FIU.



Understand, define and consistently communicate the FIU brand aspirations or “brand promise”. The definition must be based on the institution’s personality and be consistent

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with institutional behavior. The brand promise must be relevant both to internal and external constituents. 

Collectively, the FIU community must define desired behaviors associated with its promise. Consider the role of all faculty, staff, and administrators as "institutional trust agents." Inculcate a culture that every encounter people have with the institution is a "moment of truth." Whether the encounter occurs in the classroom, in an administrative office, through a campus event, online, in person, or on the phone, each experience either fosters or erodes institutional trust and the brand promise. Employees need to embrace and believe in the brand promise for it to be authentically delivered through the educational experience and student services.



Operationalize the brand promise. The promise must be personified through services, business transactions, human interactions, information delivery, and learning experiences. It must be embedded in the culture and become a part of our institutional DNA. It must be viewed as a pact between the institution and those it serves—never to be broken. Branding should not be relegated to just another marketing exercise. A marketing department can execute the promotional aspect of branding but it takes the entire institution to deliver the brand promise.



Deliver the brand promise consistently. To achieve consistency, FIU must (1) clearly define the desired constituent experience and (2) ensure the employee experience is aligned with the desired constituent experience.



Continuously and strategically highlight FIU “experts” and be nimble enough to capitalize on trending causes (e.g. Dr. Marty/Ebola awareness).

3. Enhance the Comprehensive Capital Campaign FIU will continue to increase philanthropic investments toward its vision for transformation by promoting a culture of philanthropy among friends, alumni, corporations, foundations, faculty, staff, volunteer leadership, parents, organizations and students. Investments from key stakeholders in the institution’s fundraising priorities must support the achievement of performance funding metrics and the vision to be a pre-eminent research university. These investments will include a diverse array of endowed, capital and operating funds, providing critical resources for innovation across the university. The three types of philanthropic investments for capital campaigns include: 

Endowed funds provide a sustainable source of support for the university. These investments are structured so that the corpus remains intact while generating spendable earnings in perpetuity. Endowments may support: o Scholarships: Endowed scholarships generate sustainable support for students and may be based on need or merit. To ensure that endowed scholarships make an immediate impact, the university must increasingly ask for a portion of endowed investments to be allocated for immediate support as the corpus grows.

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o

o

The need to attract top students and facilitate access to an FIU degree is of the utmost importance to our academic community. Pre-eminent programs and research: As determined by FIU’s academic leadership, endowed support for our pre-eminent programs and research ensures sustainable funding for the initiatives which will globally elevate the FIU brand. Faculty and staff: Endowment opportunities which enable the university to recruit and retain faculty and staff of the highest quality include deanships, chairs, professorships, fellowships and post-doctoral support.



Capital funds support the construction and enhancement of facilities across the university. In order to remain competitive, renovations and additional construction due to new program requirements, increases in enrollment and the need to upgrade technology within buildings will require significant resources.



Operating funds provide immediate support to meet the greatest needs of the university. Investments in operating funds may include unrestricted gifts, annual gifts, sponsorships and Athletics support.

A critical component of revenue generation will be philanthropy. As philanthropic giving becomes increasingly important at public institutions around the nation, FIU must create and sustain a culture of philanthropic investments in the university as outlined by the strategies below. Strategies 

Align FIU priorities with fundraising potential through the ongoing assessment conducted by retained campaign counsel, Marts & Lundy. Base capital campaign assessment on the initial assessment conducted by Bentz Whaley Flessner in 2011 (see attachment) to determine next steps. Build upon previous data and create a formalized capital campaign plan after meeting with academic and administrative leadership across the university. Complete the readiness/planning stage of the campaign, initiated in 2011 (see attached vision) and proceed to the final two phases: Nucleus and Principal Gifts, and the Public Phase.



Ensure that colleges, schools, academic units, museums, centers and Athletics have a completed five-year fundraising plan with goals and metrics to be achieved by 2020. Create plans based on established fundraising priorities and a clear, strategically focused, compelling vision that inspires donors to invest in FIU. Identify and articulate visions for transformation that lead units across the university to pre-eminence and innovation.



Aligned with performance metrics, develop measurable goals for a substantial and strategic increase in student scholarships. Set a goal to provide x number of students with an average annual scholarship of $x.



Standardize donor relations, recognition and prospect clearance across FIU. 6



Ensure that the primary function of all volunteer boards is the ability to give and get at an impactful philanthropic level.



Engage the university in a discussion at the departmental level on the significance of creating a philanthropic culture and the long-term impact of the capital campaign on FIU.



Attract, hire and retain top qualified development professionals in the country. Evaluate a variable compensation model. Provide specialized training geared to understanding Miami and the FIU culture. Increase the number of Spanish-speaking fundraisers.



Leverage university-wide special events and tie in fundraising priorities (i.e., [email protected], football, commencement).

4. Develop and Implement Incentive Based Funding Model The future financial roadmap for the University involves decisions that are supported and guided by the University’s mission, vision, and profile. Clear communication, transparency, and understanding are vital as FIU embarks on reviewing and revising the process by which it allocates its funds. The evolving character of FIU as defined by the strategic plan will need at its core a fiscal plan that is robust, well-managed, and responsive to constantly-changing demands and challenges. The process by which the University budget is developed and implemented is a critical element of the strategic plan. The process needs to align budget priorities, recognize revenue and spending needs, and provide stability in the face of short- or long-term interruptions in revenue sources and in this new era of performance funding. Integrated planning and budgeting drive a culture of continuous improvement and adaptation. Through inclusive planning, reviewing, measuring and analyzing outcomes, FIU will be able to provide more predictability in the allocation of funding across the University. This will also allow the institution to demonstrate how the strategic actions positively impact operations and performance outcomes. A New Era of Performance Funding, Transparency and Accountability: A new era is upon us as our university governance continues to pivot around an intensified focus on accountability as demonstrated by the newly established performance funding model instituted by the Florida Board of Governors. For FIU to continue to serve students and the community as a Worlds Ahead solutions center, the institution will need to adapt quickly to the way it will be measured and funded. The current budgeting process is centralized and the colleges and units have little insight as to how their Education and General budgets derived from state appropriations and tuition 7

revenues are allocated. A new Incentive Based Funding model will allocate resources received from tuition based on achievement of enrollment targets, student performance and retention. Focus will be placed on ensuring transparency around the decision-making process that drives budget allocations. With autonomy comes accountability; university leaders must hold the individuals responsible for the management of funds accountable for ensuring the best use of the unit’s financial resources and performance. Guiding characteristics of new FIU Incentive-Based Model include: 1. Aligning resources with institutional priorities 2. Improving transparency 3. Incentivizing performance outcomes 4. Rewarding entrepreneurial efforts 5. Aligning program costs and revenues 6. Enhancing local autonomy 7. Improve the assessment of program costs 8. Promoting improved fiscal stewardship and accountability 9. Identifying and eliminating ineffective management processes Strategies 

Transition the University budgeting process for Education and General funds from the current Incremental Budgeting Model to an Incentive Based Allocation Model to align financial performance more closely with outcomes, increase financial transparency, improve efficiency, and increase financial accountability.



Establish a budget task force to make recommendations and implement an improved University budget process that is consistent with the goals of the 2020 strategic plan.



Create a centralized incentive pool by annually reallocating resources to targeted, highpriority initiatives. This will incentivize the units, faculty and staff to improve the performance metrics and outcomes. Any reallocation of funds should be directed toward initiatives that are consistent with FIU’s 2020 Strategic Plan.



Align budget allocations & performance funds to colleges based on outcomes for BOG, BOT & other institutional metrics.



Examine incentives for full-time and part-time faculty by exploring models that differentiate among teaching loads and scholarly production, increasing merit pay for faculty and staff, and for administrators, tie “at risk” pay to performance outcomes.



Invest resources to significantly improve the collection, production, analysis and dissemination of data to improve the decision-making process based on reliable data.



Invest in a university-wide budget and planning tool. It will be the medium by which the university delivers a transparent budgeting model and provide the necessary data 8

and reports to hold units accountable for financial results. The budget and planning tool will provide unit heads a consolidated view of all funding sources along with reports with real time data that will enable unit heads to better manage the unit’s funds and make adjustments accordingly. 5. Maximize Revenues to Support Growth To achieve the University’s strategic vision of being recognized as among the nation’s top public research universities, FIU must increase its financial resources by expanding traditional revenue opportunities, augmenting innovative entrepreneurial models, rethinking delivery of academic, student, and auxiliary services. Aggressive efforts to broaden and diversify revenue sources are necessary to sustain FIU’s fiscal viability and allow for strategic investments in innovative opportunities. A stronger financial portfolio provides increased accessibility and affordability for students. Good stewardship of University assets requires that the institution control its expenses to ensure that resources and assets are utilized efficiently and effectively. FIU must examine primarily the sources and uses of revenue, ways to increase revenues and reduce expenses. Tuition revenue is one of the largest sources of revenue for the institution. A thorough review of FIU’s current enrollment and the factors that affect enrollment should be evaluated. Emphasis should be placed on ways to maximize tuition revenues in order to support growth. The following are strategies that support the goal to maximize revenues to support growth. Strategies 

Increase revenues by expanding undergraduate enrollment, self-supporting and market rate programs. Emphasis should be placed on professional masters programs.



Establish innovation incubators to provide the infrastructure for students, faculty and the local community to gather and share ideas that could lead to the creation of new products or companies. Examples of various incubators are currently being developed in the College of Business, Division of Research, Arts and Sciences, Hospitality, and University Technology Services. The objective is to offer a one-stop- shop for faculty, students and alumni. The incubators will drive FIU technology transfer and economic development initiatives by providing support in the forms of mentorship, corporate connections, efforts to access capital, business training and other services necessary for successful startup companies and technology transfer initiatives.



Increase internship opportunities via connections through FIU’s alumni base and major corporations based in Florida. A central mechanism to capture and report on all internship opportunities would increase placement.



Develop an aggressive plan to grow University patents and spin offs that address industry needs.

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Increase sponsored research in strategic areas that address community needs or solve local and global issues. Opportunistic areas include the healthcare field.



Increase public private partnerships focused on enhancing the University’s mission. Examples include building new housing on the BBC campus via PPP and strengthening Royal Caribbean partnership.



Increase FIU's presence in community organizations such as the Beacon Council, Greater Miami Chamber of Commerce. These organizations provide venues to allow FIU to be present and seen as a solutions oriented organization.



Establish and carry out a process of periodic reviews for all centers, institutes, and programs to assess ongoing relevance, progress and productivity, and the need for continued institutional support.



Incentivize and streamline innovation and entrepreneurial initiatives.

6. Grow Student Enrollments Strategically to 65K FIU will evaluate expanding enrollment size to 65,000 students in a carefully targeted and delivery-specific manner. The University will develop comprehensive plans focused on maintaining quality programs while significantly increasing enrollment in strategic areas within its existing capacity. This goal emphasizes the need to address the impact of increased enrollment on academic programs and other support areas. By addressing this impact, FIU will better position itself to attract a greater number of world-class students that it desires and help meet the demand from the community and the needs of the State of Florida in the areas of strategic emphasis including healthcare and STEM areas. It is necessary for FIU leadership to identify the resources needed to support such an increase in enrollment. These crucial resources are defined and analyzed in this strategic plan via various enrollment growth scenarios and projections. In a time of state appropriation reductions, performance based funding, and a challenging operating climate, it is imperative that proper investments be made in order to achieve this aggressive enrollment growth. The University will undertake a carefully calibrated expansion with a renewed focus on student retention, student success and performance outcomes. Strategies 

Continue to grow while continuing to improve quality indicators, such as average GPA.



Grow enrollment commensurate with student demand and academic capacity, initially by adding more online, hybrid, dual enrollment, graduate, transfer, and non-resident students.



Identify existing capacity for student growth such as on the BBC campus and newly leased Broward College facility. 10



Partner with Miami Dade College and other local colleges to dual admit students and strategically increase enrollment of transfer students.



Develop additional BS/MS options for undergraduates seeking accelerated degrees, providing more in-depth knowledge and added value for their financial investment.



Increase offerings of high demand Professionals Science Masters programs.



Give special attention to expanding FIU’s enrollment area beyond the South Florida region where the University enjoys strong brand recognition. Also expand to other regions of the country and around the globe, focusing initially on targeted recruitment of international students.



Further develop FIU’s online and hybrid learning by capitalizing on the University's strong market position in online education and the institution’s experience in providing hybrid courses (in-person and online). Expand existing online programs and continuously identify and offer new online programs with high demand.



Support FIU’S historic commitment to access and academic success through offering merit-based and need-based scholarships, both endowed and non-endowed. These scholarships should attract a diverse student body of high-potential students by supporting programs such as the National Merit Scholars.



Target fundraising efforts for endowed scholarships.



Assess current tuition discount rates (waivers and scholarships) and adjust as needed to optimize net tuition revenue.



Establish minimum class sizes for both online and in-person classes.



Expand FIU’s academic reputation and market footprint through affiliations with strategic partners.

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