Transforming School Finance and Operations with AI: A New Era in Education Management
In this month's article, our Senior Consultant Len Archer encourages school leadership to assess the possibilities of using artificial intelligence in school operations. Furthermore, he offers his perspectives on how schools should determine where to invest to get the most of this development in technology.
The evolution of technology in our personal and professional lives, specifically the advent of computing, offers a compelling backdrop for understanding the growing impact of AI (Artificial Intelligence) on our world. In the late 1970s, as personal computing began to reshape our daily routines, I, as a newly graduated professional accountant, vividly recall the debates surrounding the role of computers. A notable controversy at that time revolved around whether calculators should be allowed during final year exams (eventually, they were permitted). Although I had learned how to prepare and maintain financial records in the BC era (Before Computers), I eagerly embraced this disruptive technology, growing alongside it over the years.
Drawing parallels between this historical journey and AI's emergence, a striking similarity becomes apparent. Just as the introduction of personal computing led people to say, "Oh, the computer did that," or "get a computer to fix that," today we often hear phrases like, "AI will solve it." However, it is essential to remember that both computers and AI are tools, and their performance hinges on our direction and utilization. While AI boasts greater "intelligence" than basic computers, it remains our responsibility to wield these tools effectively. Without a well thought out plan, neither computers nor AI can function optimally.
There are three main dynamics affecting the adoption of AI. One is cost pressure. Business managers are often looking to optimize their schools' operations as much as possible. The other is a very high standard for accuracy. You must get your payments correct, you must get your payroll correct, onboarding must be perfect. And the third thing, which accelerated during the pandemic, is that the school community want consumer grade experiences. The experiences we have in our personal lives – shopping, booking a taxi, ordering food – they want to have a similar quality of experiences in a school setting.
In any organization adopting AI it is important to have in place a set of principles to guide the approach to AI. These may include, AI is never a decision maker. It may offer recommendations, but the human is always the decision maker. Additionally, that the data AI uses is owned by the data's creator. So, implementing AI is absolutely not about letting data out into the wild or spreading it everywhere. Finally, AI must be transparent and explainable. So, if AI is making a recommendation, you can ask it why, and it shows you all the data it used and why it's making that recommendation. This is really important not only to the end user but also the program owners. A school will want to be able to monitor and watch what the AI is doing to avoid when data changes and affects the accuracy of the output. Also, the technology that underlies the AI must be secure.
In the domain of school finance and operations, AI is poised to make substantial contributions. Identifying the low-hanging fruit, where AI-assisted applications are likely to have an immediate impact, is crucial. These areas encompass:
Invoice Processing in Accounts Receivable and Payable: AI-powered systems are adept at automating the extraction and processing of invoices. This not only reduces the manual workload but also minimizes errors. The result? Faster invoice processing, translating to quicker revenue recognition and more efficient cost management.
Expense Management: AI offers streamlined workflows for expense reporting and approval, ensuring compliance with policies while reducing reimbursement delays. The automation of expense management enhances financial transparency and accountability within educational institutions.
Data Analysis: AI-driven data analysis tools excel in rapidly processing large datasets, unearthing valuable insights for informed decision-making. Educators and administrators can leverage AI to gain deeper insights into community surveys, student performance, resource allocation, and operational efficiency.
Forecasting: AI-based forecasting models improve accuracy in predicting enrollment numbers, budget requirements, and resource allocation. This enables schools to proactively plan for changing needs and allocate resources more efficiently.
Strategic Planning: AI aids in analyzing historical data and market trends, facilitating data-driven strategic planning. Educational institutions can develop long-term strategies aligned with their mission and objectives, making the planning process more informed and effective.
Auditing: AI-powered audit tools identify anomalies and irregularities in financial transactions, enhancing the efficiency and accuracy of the auditing process. Auditors can focus their efforts on high-risk areas, elevating overall audit quality.
Human Resources: Apart from the indirect impact that HR should also be leading investment in staff to be prepared for AI, within the HR function there are several applications for AI. In HR, the ability to give advice, to counsel and mediate is where HR professionals should be working and not involved in transactions. AI properly invested will start to free up the HR department's time for more high value activities.
Streamlining and Improving System Integration and Workflows within the School:
AI-driven automation targets routine administrative tasks, freeing up educators and administrators to concentrate on more strategic initiatives. Improved workflow efficiency results in significant time and cost savings. For example, the efficiency of workflow processes like leave requests, or onboarding/offboarding employees can be greatly improved in speed and efficiency. Having AI help build integration for separate systems will increase accuracy and identify reconciliation issues. For example, when the admission system enrolment number doesn't match the Finance System number. (we've all been there.) AI can help develop the processes that will make separate systems "talk" to each other.
Reflecting on the trajectory of technology in education, from the early days of personal computing to the present AI integration, one undeniable truth emerges: technology serves as a tool whose impact hinges on how effectively we employ it. Just as calculators became indispensable for accountants, AI is becoming a vital asset for educators and school administrators.
While AI undeniably possesses remarkable capabilities and is poised to revolutionize school finance and operations, it is imperative to approach it with well-defined plans and clear objectives. The low-hanging fruit for AI-assisted applications in education, as mentioned above, hold the potential to deliver immediate benefits.
The synergy between human expertise and AI capabilities will continue shaping the future of education. As we harness AI's potential in school finance and operations, it is crucial to remember that AI is not a magic solution but a powerful tool that empowers us to make data-driven decisions, streamline processes, and enhance the overall educational experience for students and staff alike. By embracing AI with a thoughtful strategy, we unlock its full potential, ushering in a new era of efficiency and innovation in education management.
SAGE consultants are experienced school administrators with expertise in school finance and operations. We have conducted school administrative process reviews which include assessing and recommending strategies to maximize automation operational efficiencies and client satisfaction.