How much risk does your institution really face?
Does the institution face a known (or surprise) budget deficit or cash crisis? How do the component parts of the institution contribute to the financial whole? How should an institution respond when it doesn't meet its enrollment targets? Are there unanticipated risks associated with litigation or compliance? Financial, competitive and reputational resilience are the lifeblood of any institution, serving as the foundations upon which it thrives and achieves mission objectives. Some institutions are facing existential threats based on declining enrollments, reduced government funding, rising costs and looming operating deficits. But most institutions, even those in strong condition, will benefit from a thorough external review of financial performance, forecasted cash flow, competitive pressures and general risk. And even for the well-heeled, getting out in front of risk mitigates a multitude of problems, both reputational and fiscal. Finally, an institutional resilience review (IRR) contributes to the prioritization of investment going forward, highlighting areas critical to mission sustainability
Institutional Resilience Review (IRR) – the A&M approach
Pulling from decades of experience, A&M brings unparalleled financial and risk analysis to higher education clients at all points along the health spectrum. An A&M IRR provides an unvarnished perspective of financial position and clear status of institutional risks. When it comes to evaluating higher education, our approach focuses on three primary areas of analyses: financial health, competitive health and institutional risk. A&M's practitioners delve into the details of institutional financials, applying lenses of due diligence, valuation and restructuring, generating recommendations fueled by our Wall Street experience and our seasoned higher education team.
IRR — approach
Predicated on our review, we recommend near-term actions to improve cash flow and shore-up risks, along with strategic directions for enhanced financial performance and/or competitiveness.
So, what's next if something is amiss?
Based on decades of restructuring and recovery work, A&M is poised to help institutions take fast action in pursuit of preserving cash flow, streamlining operations and sustaining the mission. We are used to rolling up our sleeves and "cooperating" with our clients to maximize impact in short order. Cognizant of the culture of higher education, we collaboratively strike the right balance of urgent survival tactics and sensitive change management. Over the past few years, we have helped several prominent institutions successfully mitigate challenging situations to emerge financially and operationally sound.
From a financial standpoint, we have an in-depth understanding of the levers which institutions can pull to make real-time adjustments to cash outflows via operational, people and supplier management. We not only model the baseline, but also provide multiple forecasts extrapolating on the effects of external forces and actionable changes. In extreme situations, we also have practitioners, frameworks and relationships to facilitate mergers, acquisitions and asset sales. With respect to competitive health, our incisive analytical approach informs new ways of maximizing tuition and revenues from other sources. And, our higher-education savvy disputes and investigations team can support an institution facing litigation and compliance challenges.
Some of the steps we take in restructuring/recovery include:
Institutional Health – urgent response
Next Steps – jumpstart the IRR with a rapid diagnostic
A&M monitors the higher education sector on a constant basis. Our model tracks 30 institutional health factors spanning financial, competitive and legal/compliance risk. We stand ready to meet with you and your team to review a rapid diagnostic and discuss an IRR plan tailored to your institution.
Conviction and Commitment – how A&M is different
A&M is not a traditional strategy consulting firm or technology solution integrator. A&M's culture stems from decades of support for complex, urgent, "make or break" deals, transactions and projects. The higher education practice is driven by the intensity in our DNA to provide a differentiated, focused set of services in higher education. The core services A&M provides to the sector are:
A&M Higher Education Offerings
We partner with institutional leaders according to A&M's intensive collaboration model, providing end-to-end hands support in project planning, problem-solving, implementation and governance. A&M's practitioners have pioneered transformational changes with large and small, traditional and online, public and private, "rich and poor" institutions as both higher education executives and management consultants.
Originally published by 24 January, 2024
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