At An Unprecedented Time for Higher Education, Software Companies are Failing the Industry

A look into the digital challenges facing higher education and what institutions can do about them

In 2017, digital disruption has dramatically impacted every business to one degree or another, but this is just the beginning. It’s expected that this disruption will accelerate for every industry and company across the globe including higher education. For centuries, the higher education business model withstood technology advances and maintained stability; however, this time is different.

Why? Because the full suite of software solutions needed to operate an institution are already one of the most complex digital ecosystems regardless of the size of the school, from a small 500 student institution to a 50,000 student institution. This complexity is possibly only rivaled by health care, and for those who lead the institutions and manage these systems hearing that the future will continue to increase (a) technology and tool choices, (b) student expectations for deeper and more advanced digital services, and (c) recruiting and retention risks without modern digital experiences is an exasperating thought.

I recently spoke to a CIO of a tuition-driven institution who shared that he has at least 32 different enterprise systems and another ~50 smaller support systems, and this is for a 13,000 student institution. This translates into managing and building relationships with ~30 different software vendors who all have competing priorities, incentives, and sales messages. Imagine how difficult and costly it is to not only keep these systems up and running with the latest upgrades, etc. but also provide a coherent and advanced digital experience for students and faculty.

A recently published report by the New Media Consortium, NMC Horizon Report: 2017 Higher Education Edition¹ identifies the trends and technologies that will define the future of higher education. Simply put, for institutions to survive in the digital world, they will need to (a) embrace new technologies and capabilities quickly and efficiently and (b) re-invent themselves and how they operate. For a risk-adverse culture, the thought of technology restructuring all aspects of the business model is frightening. The report goes on to highlight that the “entire academic experience needs to become more personalized, experiential, outcomes-focused, technology-rich, and data-driven, with pedagogies rooted in the learning sciences and geared toward 100 percent proficiency.”

This digital disruption is not only dramatically changing all aspects of higher education but every company and every industry. McKinsey & Company published a well-researched and detailed report² that makes the case that now is the time for companies to embrace emerging digital technologies and to re-invent all aspects of their business model; however, as pervasive as digital technologies might appear, the majority of companies and industries have just started considering and acting on how this will impact their sales, marketing, operations, IT, decision-making, and customer engagement. The most important consideration is to begin now and be as fearless and comprehensive as possible.

“bold, tightly integrated digital strategies will be the biggest differentiator between companies that win and companies that don’t, and the biggest payouts will go to those that initiate digital disruptions. Fast-followers with operational excellence and superior organizational health won’t be far behind.” -McKinsey Quarterly, February 2017

In the past, most higher education IT departments looked to their strategic partners/vendors like Ellucian, Blackboard, Desire2Learn, Instructure, Jenzabar, Campus Management, and others to lead them into the future; however, two major trends have impacted this dynamic and relationship. First, IT department budgets have seen significant cuts and consistent pressure over the past 10 years although new software vendors, technologies, integrations, and business models continue to increase the technology ecosystem and complexity. With less staff, more vendors and more technologies/capabilities being added to an already complicated ecosystem, the IT department does not have the time to engage with the market or find one go-to software vendor to properly guide institutions into the digital future.

The IT departments are doing all they can to keep the institution running, but the IT staff do not have any time to envision a comprehensive digital strategy and vision. The typical dynamic that I’ve witnessed is one that resembles constant reactionary, i.e. trouble-ticketing, behaviors – jumping from one major issue or challenge to the next with very little time to plan and strategize about the future digital direction an institution desires to go.

This type of reactionary operations reality is not an indictment on the talent or the capability of those in that department. In fact, most of the IT staff are doing amazing work with little support, staff or funding (or appreciation). Most IT departments have the necessary skill-sets to install, maintain, integrate and upgrade systems, but to strategize, prioritize, invest, and envision the digital future based on end-user expectations and business requirements require a very different set of experiences and skills.

The largest obstacle in becoming a truly “digital first” institution is the culture and relationship between technology and the business. This relationship is rarely integrated and treated as an equal partnership. More specifically, business and academic leadership make technology purchases without engaging IT, draft requirements disconnected from the larger technology ecosystem, and place last minute demands on the department and expect them to react immediately and support accordingly. I learned a lesson a long time ago… when everything is an emergency, nothing is. This lack of alignment and clear prioritization is no way to operate an institution or a business in the face of incredible disruption and competition.

Equally concerning is the fact that the same digital disruption forces impacting institutions are also impacting software companies. Every higher education software company is experiencing the same digital disruption, and this market reality is causing major strategic and attention shifts away from external, market-leading investments to internal reinvention priorities that are necessary for the business to survive in the future. As an example, my previous company, Ellucian³, has been focused on moving Banner^TM (a student information system that delivers a full range of functions from strategic management to records processing) from an on-premise solution to one that is rooted in the cloud.

This is not simply a technology exercise for Ellucian, but one that also has dramatic economic and revenue implications for the company as well as institutions. Moving from on-premise to the cloud means that the license model moves from a perpetual/annual maintenance revenue stream to an annual subscription model. This is a major and necessary undertaking and causes my ex-colleagues to laser focus on this task so the company can thrive in the future digital landscape. The budget and staffing dynamic impacting institutional IT departments are also affecting higher education software companies. Strategizing, planning and investing in future innovations and marketing-leading solutions require dedicated and experienced staff, and given the digital disruption, companies are prioritizing their own business health first.

Large, global software companies like Microsoft, SalesForce, and Google continue to invest in building leading capabilities and experiences; however, their strategy and execution plan is to invest and build out platforms versus industry-specific solutions. The challenge for financially-strapped institutions is that implementing a platform requires investment in new skills and development, at least partially, to make the technology work for their students, faculty and staff. A platform is a powerful solution but one that requires at least a small degree of modification to support end-user requirements, business models, and institutional uniqueness.

In addition, the expectations of prospects and students continue to increase. Keep in mind that most students (16-22) spend an average of +8 hours a day on a digital device and when they engage with an institution, the experience is typically frustrating and time consuming⁴. This dynamic is the root of the challenge for institutions and, more specifically, where software companies are failing them.

What’s An Institution To Do?

As everyday consumers, it’s evident that technology and digital tools have become ubiquitous in all aspects of our lives, but, for higher education institutions, these tools and capabilities can be ineffective or risky when they are not integrated into the full student life-cycle in meaningful ways. It is common that the recruiting systems (typically CRM systems like SalesForce) have a very modern and seamless experience for the prospect; however, when a prospect becomes an accepted student, they typically move from a modern sales experience to an older, less advanced experience like the student information system and the teaching and learning system. This drop-off in experience causes major dissatisfaction and frustration with the newest of students.

In many cases, this digital experience is starting to cause major business challenges with recruiting and retention. Too often, the internal conclusion for this negative prospect-to-student experience is wrongly placed on the technology, the IT staff, or, in some cases, the end-users themselves. However, the root cause is that there are two different departments responsible for recruiting and student experience/on-boarding. The IT staff, in most cases, must service and respond to both requests equally and are not empowered to invest, unify, and prioritize the prospect-to-student digital experience.

“In order to develop a digital culture that allows you to effectively implement your digital channels, there are going to be lots of change projects and lots of IT projects. Universally, companies (institutions) have always been bad at two things: change and IT. This is why organizations really fail at digital.” –Building Digital Culture by Daniel Rowles & Thomas Brown 2017 ⁵

The single, most important job of an institution is to prepare its students for the workforce – a workforce that demands digitally-savvy employees who can work with different devices and technologies to engage with customers, partners, colleagues, etc. Leadership is responsible to set this vision for the institution and should see the vision reflected in the digital experience. Just using technology and digital tools is not good enough; the entire institution from faculty to staff to students must be able to seamlessly move from tool to tool, system to system, and in context while driving towards intended results.

This seamless experience requires a singular vision, priority and plan – one that is owned by one group; however, for most institutions, silos are pervasive and many business leaders are not willing to take ownership for technology or consider it central to their future plans. As an example, I witness annual department and institutional business plans being drafted with little to no involvement from other executives and technology leadership. This is not a winning formula.  How can institutions say that they are graduating prepared students without considering the digital strategy for their business?

If digital disruption is expected to accelerate, every investment needs to be reviewed through the lens of technology on the impact to user experience, how the data is shared between systems, what integrations are required, what is the impact to the ecosystem⁶, what is the return on investment, and how does this affect future digital plans, etc. Incorporating technology into every business plan is a necessary step, but the expertise and understanding in answering those questions require a skill-set and experience that other companies and industries are already incorporating into their organizational structure. Without expanding the skill-sets of the leadership team to include digital business leadership and to organize effectively to empower this new role, institutions will continue to have a fragmented digital strategy, and although some things might improve, the institution will continue to struggle in recruiting prospects, retaining students, and energizing alumni in the face of greater competition.

Strategy and Organization

Institutions should consider creating a new role on the senior executive staff and embed it within the business leadership. Someone who understands all parts of the institutional business challenges, requirements, goals, etc. and can focus on aligning those to the most impactful and important technology investments and priorities for the institution. This role reports to the President/CEO and partners with every division/department/school and the CIO/IT department to develop and draft a coherent and unified digital strategy vision, a digital investment plan, and a priority roadmap and development/execution proposal. The CIO’s role is to focus on prioritizing and overseeing technical operations and infrastructure projects across the institution whereas this new role focuses on the future digital state, investments and necessary changes required to deliver a market-leading experience for the business, prospects, students, alumni, and faculty.

Institutions can no longer look to software companies to provide thought-leadership and direction for their digital strategy. These software companies are experiencing their own digital disruptions and focusing most of their energy in how to survive in this rapidly changing landscape. Institutions need to take intellectual and visionary ownership of the systems and look to build a bold, comprehensive digital strategy.

An example of how institutions can take control of their digital experience is to invest in integrated mobile and portal frameworks that would unify the experience for all end-users. There are several good options in the marketplace (Ellucian Mobile & Modo Labs for mobile and Microsoft Office365 for Portal) that envelops the entire ecosystem⁶ of solutions and unifies the user experience for all end-users. An important note on this, institutions need to evaluate frameworks and not point-solutions (point solutions do a very specific job and normally only focus on a couple of integrations). This is just one example of a vision, strategy and plan an institution can take to bring control to a disjointed and frustrating digital experience.

Execution and Organization

Digital leadership, strategy and vision are critical pieces to solving an institution’s technology competitive and software experience challenges; however, those are only half of the solution, and without embracing execution changes, strategy and vision alone would continue to keep an institution in a depreciating digital state. You can have the best strategy but without the ability to effectively execute and deliver, an institution will continue to fall farther and farther behind.

“Execution is a specific set of behaviors and techniques that companies need to master in order to have competitive advantage. It’s a discipline of its own.”  -Ram Charan and Larry Bossidy, Execution⁷

IT departments are a service organization that attends to the demands and requests of business and academic leadership, who, in many cases, have competing and overlapping priorities. The IT department is the execution arm of the digital strategy and is a group who does not have veto power or decision-making authority over the requests and demands.

Placing digital leadership on the business executive team is necessary but it’s incomplete. Institutions need to take a deep look at how the IT department is organized and how they prioritize and execute on the institutional and departmental needs. Without a change in the execution organization, i.e. IT, the institution might be clear on the strategy, but the quality of the deliverables, cost, and timing will continue to fall below expectations. Again, this has to do with the organization and process followed to work the problem and deliver solutions.

The most popular and well-established development methodology is Agile; however, what most development organizations practice today is what’s considered waterfall or some limited form of Agile. The major differences between waterfall and agile have to do with transparency, confidence, quality, value realization, and risk. Waterfall methodology made sense for big mainframe systems, but in today’s fast-paced, digital world, bringing solutions to market quickly provides more flexibility, lower risk, immediate value realization, and more transparency. A lot of the historic frustrations with IT are directly related to the methodology being used. Agile methodology has been so successful in delivering higher quality and value to market quickly that it’s being adopted in all areas of business including marketing, support and sales.⁸ Forbes even published a recent article⁹ about Agile moving from IT/development into the rest of the business.

Adopting agile within your IT/development organization is a great start to improve execution, but a major gap remains between the business leadership and IT. A unified digital vision and priorities are at an executive level, but developers need a more specific and detailed understanding of the priorities, features, and user stories to clearly understand what they should develop and why. Depending on the size of the institution and IT staff, there are multiple, well-established processes and agile frameworks, e.g. Scaled Agile, to use to produce a much more effective and responsive development/IT organization; however, it is imperative that the whole institution (executive leadership, IT, support, marketing, recruiting, student support, etc.) commit to a framework. The institution will fail if this falls to IT to own and operate – it truly takes the entire organization to commit to being a digital leader.

The key to future success is how do you properly scale the agile methodology and framework to align your business leadership and institutional priorities and what changes are required to implement it across the institution. This is an extremely important and deep topic that warrants its own article; however, I want to provide acknowledgement on how critical execution and organizational structure are to technology strategy, and based on my first-hand experience, digital success requires institutions to fully embrace and commit to both – strategy and execution.

Wrap-Up

Understanding digital trends and triangulating where the institution should go and why is going to take a new way of thinking and a modification to the organizational structure. Schools can start small and build this over time, but institutions need to begin now because “consumer technologies, digital strategies, enabling technologies, internet technologies, learning technologies, social media technologies, and visualization technologies — [are] all positioned to impact higher education over the next five years,¹” and it’s no longer good enough for schools to rely on technology companies to lead them through this disruption. It’s time for institutions to strategically embrace technology to not only thrive in the future but to better serve their students and prepare them for a deeply interconnected, borderless, global, and accelerating digital world.

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I welcome any feedback – Twitter: @waynebovier This article/whitepaper are based on my personal experiences and views and that I understand and fully acknowledge that there may be examples and situations that differ.

-Wayne

References (and great articles/books to read)

1. Adams Becker, S., Cummins, M., Davis, A., Freeman, A., Hall Giesinger, C., and Ananthanarayanan, V. (2017). NMC Horizon Report: 2017 Higher Education Edition. Austin, Texas: The New Media Consortium.
   Overview: http://www.nmc.org/publication/nmc-horizon-report-2017-higher-education-edition/
   PDF: http://cdn.nmc.org/media/2017-nmc-horizon-report-he-EN.pdf
2. Bughin, J., LaBerge, L., and Mellbye, A. The case for digital reinvention. McKinsey Quarterly, February 2017. http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/the-case-for-digital-reinvention
3. Ellucian is the world’s leading provider of software and services to higher education institutions. http://www.ellucian.com/
4. Kulman, R. How Much Time Do Kids Spend With Technology? Learning Works for Kids, July 13, 2015. http://learningworksforkids.com/2015/07/how-much-time-do-kids-spend-with-technology/
5. Rowles, D., and Brown, T. Building Digital Culture: A Practical Guide to Business Success in a Constantly Changing World. Kogan Page, Limited, 2017. https://books.google.com/books/about/Building_Digital_Culture.html?id=ZsbZjwEACAAJ
6. Definition of Higher Education Ecosystem. The core systems and processes needed to run an institution include the following:
   • Learning Management Systems (Blackboard, D2L, Instructure, etc.)Student Information Systems (Banner, Colleague, Jenzabar, Workday, etc.)
   • Customer Resource Management (SalesForce, Microsoft Dynamics, etc.)
   • Human Resources (PeopleSoft, Workday, etc.)
   • Finance (PeopleSoft, Workday, etc.)
   • Analytics and Business Intelligence
   • Integration Technologies
   • User Interfaces – Portal and Mobile Applications (Modo Labs)
   • Maintenance and patch updates
   • IT Support
7. Bossidy, L., Charan, R., Burck, C. Execution: The Discipline of Getting Things Done. Crown Publishing Group, 2009. https://books.google.com/books/about/Execution.html?id=07jVCQAAQBAJ
8. Rigby, D. K., Sutherland, J., and Takeuchi, H. Embracing Agile. Harvard Business Review, May 2016. https://hbr.org/2016/05/embracing-agile
9. Bloomberg, J. Digital Transformation Requires Enterprisewide Agile Transformation. Forbes, February 26, 2017. https://www.forbes.com/sites/jasonbloomberg/2017/02/26/digital-transformation-requires-enterprisewide-agile-transformation/amp/
10. Ed Tech 101: Investors And Corporate Execs Sound Off On Ed Tech Disruption. CB Insights, June 7, 2016. https://www.cbinsights.com/blog/ed-tech-vc-ceo-commentary/
11. Gelernter, D. A High-Tech Rebirth From Higher Ed’s Ruins. Wall Street Journal, Jan. 22, 2017. http://www.wsj.com/articles/a-high-tech-rebirth-from-higher-eds-ruins-1485123354

About

Wayne C. Bovier is CEO of HIGHER DIGITAL^TM, LLC., a strategic and transformational consulting company specializing in digital products and organizational execution. Prior to founding HIGHER DIGITAL^TM, Wayne has spent the last 9 years working in global higher education. Most recently, Wayne led the digital transformation for Laureate Education and led a team responsible for software product management, enterprise architecture, user experience, development automation, and agile strategy and transformation for the Global Products and Services division.

Prior to Laureate, Wayne served as Vice President, Product Management for Ellucian where he provided strategic and executive leadership for Ellucian’s Mobile, Portal, Analytics, Document Management, and Teaching & Learning businesses and solutions that spanned three educational ERPs and had a global footprint in 40 countries, with more than 2,400 institutions and 20+ million students, faculty, and staff.  Wayne also served as the director of international product strategy at Blackboard, the global leader in learning management systems for higher education, K-12, and professional education.

Wayne is a Silicon Valley start-up veteran and brings a level of passion, entrepreneurial spirit, and vision to everything he does. He is a graduate of Dickinson College and the University of North Carolina at Chapel Hill.