In large public institutions, financial decisions tend to be departmentally driven, where each department orders its own equipment and determines how to finance the cost. Some lease, while others pay cash or secure other financing arrangements.
While department officials may be inclined to protect their autonomy and make quicker decisions, this fragmented approach can make it difficult for the university as a whole to capture economies of scale that would benefit everyone within the organization, and also leads to a chaotic process with limited consistency across departments.
This department-based approach had been the norm at a well-known eastern research institution. Multiple programs were in place with approximately 20 different lessors, with no consistency or overarching strategy driving any of these decisions.
The university needed a more comprehensive financial approach that would allow them to consolidate orders where possible, which could lead to significant cost savings as well as more insightful business decisions.
First American Education Finance worked with administration officials to establish a Master Lease Agreement that would help to align their needs with one strategic financial provider. The inaugural project under the new agreement was a student dorm room improvement project. With that project running smoothly, departments soon recognized the value of working within the program. Since that first project, First American has financed more than $7 million worth of upgrades for the university, including everything from dormitory furniture to software, computers, vehicles, medical equipment and more.
Within the university administration, 12 to 15 staff help to manage the projects and tie the lease agreement into the purchasing contracts. Departments come with specific requests, and purchasing officials work with the First American team, as well as department and finance leaders, to vet recommendations and incorporate the project into the lease program.
The relationship with First American has been tremendously successful in opening up lines of communication across departments and facilitating a more strategic planning process around campus projects.
As more and more projects have been completed, senior university leadership has become more involved in these ongoing conversations. Decisions are now being made at the leadership level rather than the department level, and First American is helping to bridge the gap between purchasing and financing, enabling a more big-picture view toward critical campus upgrades.
As part of that goal, a new initiative is being developed that will incorporate a campus-wide strategic technology funding program. Under this new program, departments will have the ability to refresh key software and IT devices on a regular basis, ensuring students, staff and faculty consistently have access to the best technology and allowing the university to maintain its competitive edge.