Paying for Your Vision - Integrating the Planning and Budgeting Process


Copyright 1991 CAUSE From _CAUSE/EFFECT_ Volume 14, Number 3, Fall 1991. 
Permission to copy or disseminate all or part of this material is 
granted provided that the copies are not made or distributed for 
commercial advantage, the CAUSE copyright and its dateappear, and notice 
is given that copying is by permission of CAUSE, the association for 
managing and using information resources in higher education. To 
disseminate otherwise, or to republish, requires written permission. For 
further information, contact CAUSE, 4840 Pearl East Circle, Suite 302E, 
Boulder, CO 80301, 303-449-4430, e-mail info@CAUSE.colorado.edu


                        PAYING FOR YOUR VISION--
            INTEGRATING THE PLANNING AND BUDGETING PROCESS
       by Marshall E. Drummond, Douglas Vinzant, and Wayne Praeder

************************************************************************

Marshall E. Drummond is the 25th president of Eastern Washington
University, as well as a professor of MIS. He was previously Vice
President for Administrative Services and, before that, Chief
Information Officer at Eastern.

Douglas H. Vinzant is Associate Vice President for Planning and Academic
Budgeting at Eastern Washington University, where he has played a major
role in developing and implementing Eastern's six-year planning and
budgeting process.

Wayne Praeder is Chief Information Officer at Eastern Washington
University, responsible for the planning, coordination, and delivery of
all information technology services, including computing and voice,
data, and video communications.

************************************************************************

ABSTRACT: Attempting to integrate the various planning and budgeting 
processes that normally are found on a campus is a challenging and often 
very difficult undertaking. At Eastern Washington University, strong
leadership on the part of the president and provost in creating a
planning process into which a microcomputer-based model was incorporated
has enabled the organization to take a giant step toward realizing that
goal. The computer model placed in the hands of the departmental
planners a fairly sophisticated analytic tool with which alternative
strategies could be evaluated over a multi-year timeframe. This article
describes the University's overall planning process, explains how the
computer model fits into that process, and evaluates the effectiveness
of the model's use.


"The 'new' strategic plan, and planning process, must necessarily be
'bottom-up.' Assessing the ability (and necessary skills) to execute--to
be responsive, flexible, attentive to customers--starts on the front
line. Obviously, as the process moves forward, it will involve debate
among senior officers, and compromise. But it should never lose touch
with or sight of the front line, where execution takes place."

                                           Tom Peters, Thriving on Chaos


Following a period of expansion in the 70s and early 80s, Eastern
Washington University (commonly referred to as Eastern) began to feel
the pinch of that expansion in the form of an overextended budget.
Presidents changed, and at about the same time, the State of Washington,
through the Higher Education Coordinating Board, developed a master plan
for public higher education, including the identification of long-range
program parameters for each of the state's public universities. The
result of these internal and external conditions was a great deal of
uncertainty within the campus community about what directions Eastern
would pursue and how.

To address this problem, the president and provost set out to
clarify what Eastern would try to achieve over the next several years
and to gain campus consensus on how that should be done. The vehicle
they chose to accomplish these ends was a strategic planning process.
And so, in the last several years, the administration, in consultation
with faculty, staff, and students, has rewritten its mission statement,
clarified programmatic responsibilities, and consolidated previous gains
in an effort to better prepare the University for the future.
This article provides an overview of the process used to bring
about the redirection of Eastern Washington University, including a
description of the microcomputer-based model that has been the key to
successful integration of the University's planning and budgeting
processes.

Planning and Budgeting Process

In concert with the broad directions established in the master plan
of the state's Higher Education Coordinating Board (mentioned above),
the University began to develop a statement of widely accepted and
supported goals in the fall of 1988. As a result of those efforts, three
goal categories were identified: (1) learning; (2) student development;
and (3) University management.

In addition, goal statements and critical success factors were
developed under each of these categories. Stemming from the general
direction provided by the goal statements, the provost and academic
deans led an effort to define and prioritize the areas of emphasis
within Eastern's academic programs (see sidebar). These prioritized
statements of academic program direction provided the umbrella under
which the departmental visions had to fit. This exercise was vital in
that it provided a theme for the departmental vision statements, with
the caveat that an individual department's proposed programs would be
likely to receive funding relative to the support those programs
provided for the accomplishment of the goals within the areas of
emphasis.

     Stages of development

To address the president's mandate for faculty and staff
participation in developing and implementing the University's plans, a
process was designed which can be characterized as a "bottom-up"
approach. To achieve the desired broad-based participation and
consensus, the process was designed to occur in four developmental
stages: (1) department plans; (2) college or division plans; (3) vice
presidents' plans; and (4) University-wide plans.

In this four-stage, "bottom-up" process, plans are rolled up to the
next higher level, where they become the basis for developing the
succeeding level's plans. The process continues until the final
University plans are completed and adopted by Eastern's Board of
Trustees. This approach enables all constituent groups in the campus
community to express and promote their values and priorities in shaping
the University's agenda for the planning period.

     Expected outcomes

The planning process was initiated with the expectation that a
number of products would result from its implementation. The most
tangible outcomes of the process are program plans and budgets at
departmental, college, or division level, as well as vice presidential
and University level. At each of the four developmental stages, plans
have been produced which include: vision narrative (a description of
the program as it will exist at the close of the six-year planning
period), strategies (the key actions or decision points that must be
implemented each biennium of the plan period to bring about the changes
called for in the vision narrative); and operational plans (the resource
requirements--operating and capital--necessary to implement the
strategies.

The operational plans were developed using a micro-based resource
requirements model that provides a budget view of the existing program
components within a department, and a simple way of adding new
programmatic components required to enable various plan scenarios. This
model essentially represents the annual operating and capital budgets at
the departmental level (the University's fundamental budget building
block) that are required to implement the program directions identified
in the vision narrative and strategies. This is a critical aspect of
Eastern's process, which differentiates it from most attempts to link
planning and budgeting. Rather than going through separate exercises for
planning and budgeting, we have integrated the two; the tool we have
utilized to accomplish this integration is the resource requirements
model (described below).

Too often, colleges and universities have planning processes which
are separate and distinct from the budget process. It is this separation
which encourages decision-makers to be unwilling to make hard choices in
the planning process in the same manner that they must be made in the
resource allocation process. Often, the result of this phenomenon is
that plans are adopted requiring resources far beyond those available.
As a result, when the budget process begins, the plans are set aside and
decisions are made with little or no reference to the plans.

Given the expected demographics of the latter part of the decade,
effective planning for replacement of faculty members is critical to the
viability of the University. The plans under development willenable
Eastern to evaluate where anticipated vacancies will occur and initiate
appropriate recruiting measures to replace retiring faculty.

The information about information technology and facilities derived
from the process will also be used to develop a campus technology plan
and a campus facilities master plan. These efforts are commonly not
integrated into the institution-wide planning process; they are more
likely to be operating separately, leading to decisions which are not in
agreement with one another in the choice of program direction,
technology requirements, and facilities needs. By including these key
elements in the overall planning process, Eastern hopes to achieve an
integration of program planning, information technology planning,
facilities planning, and budget development.

In addition to the tangible outcomes which the plans and budgets
represent, there have been a number of very significant intangible
outcomes of the process, including the development of a broad base of
understanding and support for the directions established for the
University and the incorporation of longer-term programmatic goals in
short-term operational decision-making processes throughout the
University. In an organization as diverse as a university, these
outcomes are significant, yet difficult to achieve.

     Department planning and budgeting

By January of 1990, the department planning process was under way.
In developing their plans and recommendations, all academic and
administrative departments went through the same eleven steps (see
Figure 1). The first step was to develop the components of the vision
narrative of the plan, e.g., analysis of events, trends, and
developments; an explicit statement of assumptions; and a description of
the program as it would exist at the close of the six-year plan period.

[FIGURE 1 NOT AVAILABLE IN ASCII TEXT VERSION]

Step two, refining the vision, was to ensure that the vision
directly addressed accomplishment of the identified University goals and
did so within the parameters established by the University planning
process assumptions.

The third step required development of strategies for each two-year
period (biennium) of the six-year plan. This step required departments
to identify the key actions or decision points that would have to be
implemented to progress towards realization of the vision.

Step four involved holding a series of workshops which provided
departments with the opportunity to discuss interdepartmental and
intradepartmental program linkages. In addition, deans and division
directors reviewed the progress of departmental plans and provided
feedback on the directions being taken by departments. The greater the
involvement of senior managers early on in the planning process, the
less need there was of substantive changes in the plans at subsequent
stages of development. These workshops were also used to introduce the
resource requirements model to the planning process participants.

The next four steps of the process required use of the micro-based
resource requirements model (described below). These steps included
definition, prioritization, and identification of resources necessary to
support new and existing departmental programs or services. Departments
were also required to link their programs to strategies by coding each
program to a specific strategy. This linkage was a critical element in
the subsequent stages of plan development as it enabled senior
management to evaluate strategies and their resource requirements across
departments.

By the end of step eight, departments had completed their plans for
resource requirements. A 100-percent-of-baseline budget assumed that the
same amount of funding they had the previous fiscal period would be
available, while a 1XX-percent-of-baseline budget assumed that funding
above the baseline would be available. Step nine of the planning process
applied only if the total fund requirement determined by the resource
requirements model exceeded 100 percent of the previous year's base
budget. If this happened, the department had to go back and rework
strategies and operational plans until the resource requirements did not
exceed the 100-percent-of-baseline budget. In all cases, departments
were encouraged to develop both baseline and in-excess-of-baseline
budgets, to allow flexibility in decision-making later in the process.

Step ten was a second series of workshops in which departments
presented their final plans including vision narrative, strategies, and
operational plans. Both the strategies and operational plans included
two scenarios--one for 100 percent and one for 1XX percent of baseline
budget. As a result of information received in the workshops,
departments made final modifications to their plans.

Step eleven was the final step in the first stage of the
University's planning development process. Departments submitted a
complete set of their plans, both in hard copy and on diskette, to their
dean or division director.

The subsequent stages of development followed essentially the same
series of steps as the ones outlined above, but were based on
compilations of the department plans. Because the president and provost
insisted on maintaining an open and participative process, there was a
great deal of dialogue between department chairs and directors and their
respective deans and vice presidents. This dialogue was encouraged
formally by scheduling meetings specifically for the purpose of feedback
on the plans as they progressed through the development process.
Additionally, when changes were made in the later stages of development,
managers were required to go back and revise the department plans
accordingly.

     Integration with information technology plan

The planning process for the use of information technology is a
stand-alone process at many colleges and universities. The drawback of
such an approach is that the requirements or needs identification
process usually is conducted by an information technology planning study
team. In an integrated campus planning process, the information on the
individual functions requirements and needs is submitted up through the
organization itself. This makes the aggregation of needs as well as the
priority-setting process much simpler.

As each department at Eastern developed its plans, information was
collected in the resource requirements model concerning their technology
and information resource requirements. Each project was entered into the
model in the priority order requested by the department. As the model
was rolled up into college or division plans, these projects were
refined and reprioritized. After the plans had been rolled up to the
vice presidential level, the computing and telecommunications-related
projects and needs were extracted and brought before the University
Computing Policy and Review Committee, which oversees all information
technology (IT) issues. It has representation from faculty,
administrators, and students. The role of IT governance in this process
is to recommend IT project priorities for the entire University based on
a total view of all the requested projects. At this point, other
technology infrastructure projects could be added if they were needed to
support or supplant other requested initiatives.

Figure 2 shows the overall flow of the information technology
planning and budgeting task at the University. The left margin
identifies the task being addressed, and the top margin identifies the
questions being answered by each activity in each task being addressed.
This overview is helpful to planners who need to know what tasks are
included in the information technology planning process, and where in
the process each of the relevant questions will be addressed.

[FIGURE 2 NOT AVAILABLE IN ASCII TEXT VERSION]

The outcome of this process is a recommended portfolio of
information technology projects in priority order. The various projects
are screened for duplication and overlap, how well they further the
overall mission and goals of the University, and how well they fit into
and promote the target information technology environment for the
institution. The portfolio of projects then becomes a tool to allocate
internal funding and to request enhanced funding from the state, and
provides a focus for the investigation and development of grant
opportunities. This portfolio also becomes a component in a separate
information technology master plan, which is a required document from
each institution in the state.

The Resource Requirements Model

The resource requirements model is composed of six different
worksheets in electronic spreadsheets which are used by department
managers to allocate resources for the department over the six years of
the planning period (see Figure 3). Although department budgeting and
planning could be completed using paper worksheets, the resource
requirements model is far superior due to its speed and accuracy; this
is particularly true when managers wish to evaluate resource
requirements of alternative strategies. The model allows the department
manager to identify annual budgetary requirements by program in each of
the following areas :

  *  Personnel
  *  Operations exceptions (non-personnel requirements)
  *  Technology and information resources requirements
  *  Facility requirements

[FIGURE 3 NOT AVAILABLE IN ASCII TEXT VERSION]

Users initiate their work with the model by opening the _program
definition_ worksheet. In this worksheet, departments name their 
programs and list them in priority order. Academic programs are also 
required to enter full-time-equivalent-students data for each of their 
programs; no program measures are required of the non-academic programs.

Department planners next proceed to the _program personnel staffing
matrix_ worksheet. From the baseline budget, salary and benefits,
position numbers, job titles and classes, names, and staff year data for
all personnel in the department are provided in the diskettes received
by the departments. Department managers are then required to allocate
each individual's costs to the programs identified in the program
definition worksheet. Any changes to the baseline in the form of
additions, deletions, or shifts between programs are also made at this
point. Standard dollar values for new positions are provided via a table
in the model which the spreadsheet accesses when a job title and class
are added.

The next step is to add the non-personnel resource requirements for
each of the programs in the _exception resource allocations_ worksheet. 
In this area, there are three separate spreadsheets--for operations,
technology and information resources, and facilities. In the operations
area, a basic level of goods and services and travel costs are provided
in the academic programs based on formulae. All other operations costs
are treated as exceptions, which have to be identified for each program.
In the service programs, all operations costs are treated as exceptions.
Under technology and information resources, items such as equipment,
computer hardware and software, and library requirements are identified
for each program. Similarly, in the facilities spreadsheet, facility
modifications required to support the programs are identified. In each
of these areas, standard values are provided to users where possible.
For example, the Facilities Planning Office provides departments with
estimates of costs for capital improvements. In the computing area, the
campus computer center provides standard values on computing resources.

The _final resource allocation projection_ worksheet provides users
with a summation of their inputs from the previous five spreadsheets for
one fiscal year. In this spreadsheet, managers can see the total
operating and capital resources required for each program for a given
fiscal year.

As described in the planning process, two different resource
requirement scenarios are developed by each department. This process is
repeated for each year of the six-year plan. For those who wish to copy
elements of one year to another, the model includes a copy feature which
enables them to do so.

Evaluation of the First Iteration of the
Integrated Process

Without question, the single most important factor in the
successful implementation of this planning and budgeting process at
Eastern was the support of the president and provost and their
commitment to involving department managers in the entire development
process from the outset. This point cannot be emphasized too strongly
for institutions considering implementation of a similar process.

It should also be recognized that this type of heavily
participatory process requires a substantial amount of time and will not
be successful unless it truly becomes a management priority which
supersedes (at times) all of the other activities for which managers are
accountable. The process is not one which can be started and finished in
three months; it will require anywhere from twelve to eighteen months to
complete the first cycle of the process due to the training and learning
curves associated with it.

As for using a computer-based model to support the planning and
budgeting process, probably the most obvious and important lesson we
learned is the need for matching user skills with the model's degree of
sophistication. The balance that must be achieved is securing the amount
and type of information necessary for decision-makers to make informed
programmatic choices, while keeping the model from becoming so elaborate
and complex that managers are unable to use it.

While the model made possible far more accurate and sophisticated
analysis of data by managers at all levels of the organization, it
required a basic understanding of microcomputer usage which was lacking
in some cases. The result was that those managers who were unfamiliar
with micro-computers had to develop their information by hand in hard
copy and then have it keyed into the model. Approximately 10 percent of
our managers followed this approach; thus, they could not use the model
to do the "if-then" type of analysis available to them through the
model. As previously explained, the data describing the historic budget
base for each department were downloaded from the mainframe accounting
system, and the cost data for planned enhancements were derived from a
series of standard costs items which were stored in a database within
the microcomputer-based model. Those unable to utilize the database had
to print out the tables and select the cost data in this manner, all of
which had to be rechecked after it was keyed into the model.

One of the difficulties of using this particular computer-based
model had to do with the limitations associated with using a two-
dimensional spreadsheet package rather than a more sophisticated package
such as relational database software. The problem once again, however,
was the development timeframe (which was very short) and user skill
level. While the spreadsheet software allowed adequate analysis at the
departmental level, as departmental plans were rolled up to division,
vice presidential, and University levels, it could only be used in a
limited manner. To address this problem, the University is using a
decision support modeling package to evaluate the data at the aggregated
levels later in the process.

In the spring of 1991, the president presented the final plans to
the University's Board of Trustees, who adopted the plan in its
entirety. The budgets developed in conjunction with the plans were
adopted by the Board shortly thereafter. These two actions signified
completion of the first cycle of the University's planning process. From
now on, every year prior to the start of a new biennium, the plans and
budgets will be revisited and adjusted, ensuring that programmatic and
budgetary decisions are consistent with the goals the University has
chosen to pursue.

Conclusion

Attempting to integrate the various planning and budgeting
processes that normally are found on a college or university campus is a
challenging and often very difficult undertaking. At Eastern Washington
University, strong leadership on the part of the president and provost
and a microcomputer-based model have enabled the organization to take a
giant step toward realizing that goal.

The model placed in the hands of the departmental planners a fairly
sophisticated analytic tool with which alternative strategies could be
evaluated over a multi-year timeframe. More importantly, by identifying
and prioritizing budgetary allocations needed to support programs in the
planning process, the model required managers to make the same types of
choices and decisions required in the budget process, thereby avoiding
the common pitfall of failing to make difficult choices in the planning
process, and then being forced to abandon the plans when the budget
process requires such decisions.

************************************************************************

Areas of Emphasis in the Planning Process

Eastern Washington University's planning process is designed to assist
in providing direction to University activities and to focus resources
on achieving the highest quality teaching, research, and service,
consistent with the state master plan. While the University mission
statement serves as the most general expression of that purpose,
Eastern's planning process moves from the generalities of the mission
statement to more specific areas of action. Since not all proposals can
be funded, nor all avenues of action supported, the University
establishes "areas of emphasis" within the planning process to allow a
consistent focus on a relatively confined set of goals. Areas of
emphasis are selected based on the following criteria:

  *  Supports or contributes to Eastern's central mission
  *  Fits with the general character of the University
  *  Fits realistically with funding bases of the University
  *  Represents an area of demand, interest, or opportunity

Within these guidelines, proposals take a variety of forms--specific
academic programs/activities, cross-disciplinary undertakings, general
academic improvements, or cross-University activities.

The University gives the selected areas of emphasis a priority
ranking to provide a standard for evaluating individual proposals.
However, individual planning units are encouraged to rank the areas
according to their importance to the unit's mission, and some funding is
expected to be available for each priority. 
Each of the five areas of emphasis selected for the current planning 
cycle represents an area of activity identified as deserving strong 
consideration and support throughout the planning and budgeting process. 
These areas are not mutually exclusive, but are closely intertwined and 
in many ways reinforce one another:

1. Reinvigorate and reform liberal arts and sciences and their role
in the University educational process.

2. Provide for the professional development of the faculty.

3. Increase the international and intercultural focus of the
curriculum/University.

4. Provide for discipline-focused enhancements.

5. Increase focus on the development of campus life in both
traditional and non-traditional settings.

These areas and their relative priority are reassessed as the process
moves through its regular activity cycles.

************************************************************************