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Making the grade 2011 A study of the top 10 issues facing higher education institutions

Making the grade 2011 A study of the top 10 issues facing higher education institutions. March 2012. Introduction. Responsible for the higher education and K-12 education in Canada, and co-leads the US Higher Education practice

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Making the grade 2011 A study of the top 10 issues facing higher education institutions

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  1. Making the grade 2011A study of the top 10 issues facing higher education institutions March 2012

  2. Introduction • Responsible for the higher education and K-12 education in Canada, and co-leads the US Higher Education practice • More than 100 projects with education clients in the last 12 years, including: • Queen’s University • College of the North Atlantic (NL and Qatar) • Dalhousie University • McMaster University • Memorial University • Mayo Clinic College of Medicine • University of North Carolina • Florida State University • Pennsylvania State System of Higher Education • Cornell University Louise Upton, Partner Deloitte Making the Grade 2011 - A study of the top 10 trends in higher education

  3. About Deloitte • Serving education clients for more than 50 years. • More than 200 higher education institutions in Canada and the U.S. • Recognized for quality and collaboration • Spanning business planning, process improvement and technology delivery • Author and owner of the Total Campus™ Methodology developed specifically for Higher Education transformation projects • Delivering pragmatic solutions Making the Grade 2011 - A study of the top 10 trends in higher education

  4. About ‘Making the Grade’ • Idea for the study was generated in 2010; we conducted the interviews in 2011 • 10 countries/regions were interviewed, including: • Canada - US • UK - Australia • Middle East - India • Spain - Netherlands • New Zealand - France • What are the top 10 issues facing higher education in your country? • Most countries identified the same/similar 10 issues, • with a few exceptions Making the Grade 2011 - A study of the top 10 trends in higher education

  5. “As funding dries up, some universities are heading into debt for the first time….” -Brian McKenna, Partner, Deloitte Canada Making the Grade 2011 - A study of the top 10 trends in higher education

  6. 1 Institutions are over-budget and underfundedAs funding declines, cost management is key • Global financial crisis affected schools: • Value of endowment funds decreased • Donors began to be more cautious with their money • Governments around the world are cutting dollars for higher education • Many countries/provinces/states have limited tuition increases • Governments are also taking a more hands-on approach in the funding approval process (e.g. MOU and school innovation fund in NS). Decreases in Funding • Cuts in 43 US states • Decline of 80% funding over next four years in UK • Decline in federal funding levels in Canada: • From 80% of operating revenues in early 90’s – to 57% in 2007-2008 • As operating margins shrink, higher education institutions must find new ways to cut costs without sacrificing services Making the Grade 2011 - A study of the top 10 trends in higher education

  7. 2 The rivalry intensifies Competition to attract the best students heats up ? The number of students around the world enrolled in post-secondary education is forecasted to double to 262 million by 2025* Nearly all of this growth will be in the developing world, with more than half in India and China alone. The number of students seeking study abroad could increase to 8 million – almost 3 times more than today Should you play “globally”? *As reported by the University World News Making the Grade 2011 - A study of the top 10 trends in higher education

  8. 2 The rivalry intensifies (cont’d)Competition to attract the best students heats up The top five reasons for going global* Although a global strategy makes sense for some institutions, it is not right for every school 1. Improve student preparedness 2. Internationalize the curriculum 3. Enhance the institution’s international profile 4. Diversify faculty and staff 5. Strengthen research and knowledge production According to a report by the International Association of Universities Making the Grade 2011 - A study of the top 10 trends in higher education

  9. 2 The rivalry intensifies (cont’d)Competition to attract the best students heats up “To avoid brand erosion, higher education institutions must get very clear on their strengths and weaknesses. They need to assess if they play on a global, regional, national or local stage. They need to decide if they plan to specialize in specific degrees or student segments. Rather than offering a bit of everything, organizations must identify the key areas of expertise that can best support future growth.” LoicJouenne, Partner, Deloitte France Making the Grade 2011 - A study of the top 10 trends in higher education

  10. 2 The rivalry intensifies (cont’d)Competition to attract the best students heats up Align regional offerings and meet stakeholder needs Two strategies for consideration: Articulate a global strategy to attract students and extend educational offerings Making the Grade 2011 - A study of the top 10 trends in higher education

  11. 3 Setting prioritiesThe danger of making decisions in the dark • Old habits are hard to change - tough new realities challenge democratic decision-making: Making the Grade 2011 - A study of the top 10 trends in higher education

  12. 4 Moving at the speed of cyberspace Technology upgrades are needed across the board • IT as a service on campus • Upgraded systems are still not being leveraged to their full potential • Need to embrace social media and engage students in relevant dialogues • Aging technology systems challenge institutions ability to manage rising demands from students and staff Benefits to Upgrading/Leveraging Technology • Attracts students and meets needs of disparate student groups • Supports online learning and includes remote communities • Reduces infrastructure demands and offers programs to higher volumes of students • Recruiting and retention Making the Grade 2011 - A study of the top 10 trends in higher education

  13. 4 Moving at the speed of cyberspace (con’t)Technology upgrades are needed across the board • Disruptive innovation can change the way the world learns • Reforms need to address the differences in how students learn – none have managed to do this so far • Demand for student-centric learning is on the rise – perfect opportunity for disruptive innovation • Disruptive technologies drive: • Accessibility • Affordability • Capability • Responsiveness • No need to boil the ocean – start small and go around the system Disruptive innovations in education • Online learning networks • Modular system to allow customized delivery of education to individual student learning needs • Administrators taking the view of “educating children in their district” versus responsibility for schools in a district Making the Grade 2011 - A study of the top 10 trends in higher education

  14. 5 Rethinking infrastructureA renewed focus on asset optimization • With looming financial insecurity, many institutions have adjusted their operations to: Scaling back or halting plans • Maximize existing sources of revenue (fees, parking) • Reduce costs • Slow spending and defer decisions Monetizing existing assets Disposing of surplus assets Financial Insecurity Partnering with Private Sector Deferred Maintenance Fees and Revenues Making the Grade 2011 - A study of the top 10 trends in higher education

  15. 6 Linking programs to outcomesWhere training and market demand intersect • Colleges are starting or have surpassed universities on post-graduate employment • Projected growth in jobs with vocational training • Workforce gaps and illiteracy in developing nations that lack a focus on vocational training Current Workforce Challenges Need for renewed focus on vocational training • Institutions should look to: • Continue to design programs that align with labour needs • Apply common KPIs • Be open to link outcomes to funding “Institutions must ensure their educational agendas are in sync with forecast marketplace demands.” Arsh Maini, Senior Consultant, Deloitte India Making the Grade 2011 - A study of the top 10 trends in higher education

  16. 7 The best and the brightestAttracting and retaining talented faculty • Like other organizations, performance hinges on the talent of staff • For higher education institutions, attracting and retaining the right faculty can spell the difference between success and failure Strategic priorities Potential Barriers Faculty recruiting and retention • Aging workforce • Low retirement rates • Difficulty in remaining relevant to rapidly evolving student expectations • International competition for same candidates • Competitiveness of private sector and higher-profile academic jobs Enhance teaching quality Measuring performance Making the Grade 2011 - A study of the top 10 trends in higher education

  17. 8 A sustainable futureEnhancing environmental performance • Institutions around the world are responding to (and in some cases, driving) evolving environmental awareness • Higher education institutions are seeking new and better ways to reduce, reuse and recycle • Environmental consciousness appears to cross organizational lines Energy-efficient facilities ‘Greening’ institutional policy IT energy reduction Environmental Responses ‘Green Cleaning’ and maintenance practices “Schools also need to enhance their environment-related programs to provide students with the educational credentials they need to drive this agenda in the community at large.” Michael Pentland, Associate Partner, Deloitte Canada Making the Grade 2011 - A study of the top 10 trends in higher education

  18. 9 Education for allTackling diversity, accessibility and affordability • Access to education crosses social, cultural and geographic lines • Governments struggle to educate hard-to-reach students: Potential Strategies Remote Areas Income Disparity • Online programs • Video streaming • Other forms of digital education • Financial aid programs targeted to unique student populations • Diverse faculty • Cultural diversity Disabilities Minority Groups Education for All Making the Grade 2011 - A study of the top 10 trends in higher education

  19. 10 Regulations and reportingNew responsibilities require better disclosure • Governments around the world are increasing industry oversight: Funding Constraints Regulatory Complexity Cost Containment Tighter Lending Standards Increasing need for transparency • Allocation of research funds • Student success rates • Sustainability • Outcomes • Standards • Rankings Need for information management approaches/systems Making the Grade 2011 - A study of the top 10 trends in higher education

  20. Responding to Challenges Making the Grade 2011 - A study of the top 10 trends in higher education

  21. Colleges and universities can manipulate four key drivers of educational institution value to improve performance • Wide variety of funding models, geographic reach, educational focus, student constituency and faculty talent - industry challenges affects every institution differently. • Response to industry changes must be specific to the institution, but take into account best practices and four key drivers of performance: Funding and revenue growth Operating margins Asset efficiency Expectations and strengths The ‘top line’ of institutional profitability - how much institutions receive from public and private sources, in addition to monies they collect from tuition and other income. A key driver of institutional profitability and how they can improve value captured between funding sources and their expenses. How effectively institutions use their capital assets, such as IT, facilities and fleet, and whether they can squeeze additional revenue or cost savings from existing investments. By leveraging true institutional capabilities and differentiators, institutions can compete for students at a lower cost than competitors Making the Grade 2011 - A study of the top 10 trends in higher education

  22. Many higher education institutions are seeking ways to attract additional funding and uncover new sources of revenue Funding & Revenue Growth • Incorporate an operational element into strategic planning to ensure a focus on the highest priority issues • Streamline the governance process to empower stakeholders to quickly make informed budgetary and research allocation decisions • Clearly define roles, responsibilities and accountabilities • Improve information tracking to better measure and report on program outcomes • Explore innovative public-private partnership opportunities • Enhance institutional brands in an effort to attract additional private investment • Leverage social media and other online forms of ongoing communication to establish and maintain relationships with students, parents and alumni • Improve tracking of research dollars • Consider globalization strategies Making the Grade 2011 - A study of the top 10 trends in higher education

  23. Higher education institutions must continue reducing their costs to widen operating margins Operating Margins • Implement and/or leverage technologies designed to streamline core business processes, such as: • Student services • Finance • Administration • Human resources and • Procurement • Engage in more sophisticated planning and forecasting • Pinpoint opportunities to share services and outsource non-core functions • Eliminate program redundancies and inefficient processes. Making the Grade 2011 - A study of the top 10 trends in higher education

  24. Higher education institutions can also optimize the use of existing assets to improve performance Asset Efficiency • Engage in talent management strategies to attract and retain the highest calibrefaculty • Streamline procurement and sourcing to optimize the supply chain • Review regional delivery models to eliminate program duplication and pursue consolidation where it makes sense • Extend access to programs through distance learning and online education • Identify and target optimal student populations • Engage in sustainability initiatives to improve energy utilization, reduce waste and identify ancillary opportunities to cut costs and improve performance • Rationalize IT and real estate portfolios. Making the Grade 2011 - A study of the top 10 trends in higher education

  25. Higher education institutions can also enhance institutional brands to build on existing strengths Expectations & Strengths • Improve information management and data analytics to identify areas of competitive differentiation • Solicit opinions from outside the education sector • Leverage technological innovation to better engage students and improve services • Revisit existing strategies and processes with an eye towards identifying areas for improvement • Benchmark against competitive institutions • Share best practices Making the Grade 2011 - A study of the top 10 trends in higher education

  26. Closing Remarks • Innovation in the higher education sector is limited only by the imagination • Institutions must step up and find new ways to meet the changing needs of their stakeholders, despite limited funding Innovate and evolve, do more with less, and ensure individuals contribute to global competitiveness Making the Grade 2011 - A study of the top 10 trends in higher education

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