A mid-size private university’s CIO submits the same Banner managed services renewal she has submitted for six years. This year, for the first time, the CFO sends it back with a question: why does this line item need to stay flat when the incoming class is smaller than budgeted. There is no easy answer ready, because there has never had to be one. The renewal used to move through finance committee on autopilot. It does not anymore.
That scene is playing out across higher education right now, and it is not anecdotal. The number of U.S. high school graduates is projected to peak at roughly 3.8 to 3.9 million in 2025, then decline steadily through 2041, according to WICHE’s “Knocking at the College Door” projections, covered in detail by Higher Ed Dive. WICHE puts the national drop at 13 percent from the 2025 peak through 2041, with the Northeast losing 17 percent of its graduating cohort, the Midwest 16 percent, and the West 20 percent. Only the South is projected to grow. For institutions in the hardest-hit regions, that is not a distant planning problem. It is next year’s enrollment target.
Fewer graduating seniors means fewer applicants, which means tighter tuition revenue, which means every budget line gets a second look it did not get before. IT is not exempt. EDUCAUSE’s spring 2025 QuickPoll on technology budgets and staffing found that 42 percent of higher ed IT leaders anticipated budget decreases for the 2025-2026 academic year, with a median expected cut of 8 percent. That is the environment a Banner-dependent CIO is now defending spend inside, and it is why a renewal that used to be a formality is suddenly a negotiation.
Why ERP Maintenance Looks Discretionary From the CFO’s Chair
From a spreadsheet, Banner managed services and ERP maintenance look like recurring vendor cost, similar in shape to a facilities contract or a software subscription. A CFO scanning line items under pressure to close a budget gap sees a number that has grown steadily for years and asks the obvious question: what happens if we trim it.
The answer that CIOs often give, that the system needs upkeep and the vendor relationship needs continuity, is true but weak in a budget meeting. It describes IT process, not institutional consequence. A finance committee weighing whether to protect enrollment marketing, financial aid awarding, or a faculty line against an ERP support contract will not choose the ERP contract unless someone connects it directly to the outcomes the committee already cares about.
What Banner Actually Touches
Banner is not a back-office system. It is the system of record for registration, financial aid disbursement, and the retention reporting that tells an institution which students are at risk of not returning next term. During the exact period when institutions can least afford to lose a student, these are the three functions under the most operational strain.
A registration outage during add/drop week does not just create a support ticket. It creates students who cannot finalize a schedule and quietly decide not to come back. A financial aid disbursement error at the start of a semester, when a tuition-dependent institution has the thinnest cash cushion it has had in years, is not a data problem. It is a liquidity problem. A retention report that runs late or wrong means the advising team intervenes with an at-risk student a month after the window to keep them enrolled has closed. Cutting maintenance on the system that runs these three functions to save a line item is a bet against the institution’s own survival numbers, made at the exact moment those numbers matter most.
Reframing the Conversation: Risk Mitigation, Not Discretionary IT
The fix is not a louder version of the old argument. It is a different argument, one that puts Banner spending in the same category the finance committee already uses for insurance, compliance, and cash reserves: risk mitigation tied to institutional survival metrics, not a discretionary technology cost.
That reframe holds up if the CIO can show, in the committee’s own language, what a lapse actually costs:
- What percentage of this year’s incoming class is within the margin the institution cannot afford to lose to a registration failure
- What a single day of financial aid disbursement delay does to cash flow during a tuition-dependent semester
- What a two-week lag in retention reporting costs in students who could have been saved by an earlier advising call
None of that requires new software or a bigger contract. It requires walking into the meeting with the institution’s own retention and cash-flow numbers already attached to the Banner support line, so the conversation is about risk exposure instead of vendor cost.
What Comparable Institutions Actually Spend
CIOs also need a benchmark, because “trust me, this is normal” does not survive a budget hearing. The most cited public reference point, EDUCAUSE’s Core Data Service benchmarking, has put average institutional IT spending at roughly 4.2 percent of total institutional budget, with private master’s-granting institutions and primarily undergraduate colleges running closer to 4.4 to 4.5 percent and larger doctoral institutions closer to 3.3 to 3.6 percent, according to figures cited by Inside Higher Ed. Within that IT budget, the same data shows the large majority goes to keeping existing systems running, not new projects.
The number matters less than what it does in the room. A CIO who can say “our ERP support spend sits inside the range peer institutions report, and it covers the three systems tied directly to our retention and cash-flow numbers” is not asking for trust. He is showing his work.
A Framework for the Budget Meeting
Before the next renewal conversation, a CIO defending Banner spending needs three things on paper, not in his head: the direct line between ERP uptime and the institution’s own retention, aid disbursement, and registration continuity numbers; a peer benchmark showing the spend is not out of line with comparable institutions; and a clear answer to what specifically gets thinner, not eliminated, if the budget has to move. That last point matters because a CIO who arrives only with a defense of the full number invites a committee to cut it anyway. One who arrives having already identified where the spend can flex without touching the risk-critical core keeps the decision in his hands instead of the CFO’s.
This is also where an outside read helps. STG works with institutions running Ellucian Banner to separate what is actually tied to registration, aid, and retention risk from what is legacy scope that accumulated over past renewal cycles, so the number a CIO defends is the number that actually needs defending. That is a right-sizing conversation, not a spending-more conversation, and it is the kind of diagnostic work that holds up under committee scrutiny because it starts from the institution’s own risk exposure rather than a vendor’s renewal quote.
Where to Start
If your next Banner renewal is getting questions it never used to get, the useful next step is not a longer justification memo. It is a short session where someone outside your team maps your current ERP spend against your registration, aid, and retention risk, and tells you plainly which parts of that spend are protecting the institution and which parts are just inertia. STG runs that assessment directly with CIOs preparing for budget season, and it produces the specific numbers a finance committee actually wants to see, not a general case for why IT matters.
Sources
- WICHE, “Knocking at the College Door” projections: https://www.wiche.edu/knocking/
- WICHE key findings on high school graduate projections: https://www.wiche.edu/knocking/key-findings/graduates/
- Higher Ed Dive, “The coming decline in high school graduate counts, in 5 charts”: https://www.highereddive.com/news/decline-high-school-graduates-demographic-cliff-wiche-charts/738281/
- EDUCAUSE Review, “EDUCAUSE QuickPoll Results: Technology Budgets and Staffing” (2025): https://er.educause.edu/articles/2025/4/educause-quickpoll-results-technology-budgets-and-staffing
- Inside Higher Ed, “How Much Does Higher Ed Spend on IT?”: https://www.insidehighered.com/blogs/technology-and-learning/how-much-does-higher-ed-spend-it
