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

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Presentation on theme: "Making the grade 2011 A study of the top 10 issues facing higher education institutions March 2012."— Presentation transcript:

1 Making the grade 2011 A 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 A study of the top 10 trends in higher education2

3 About Deloitte 3Making the Grade A study of the top 10 trends in higher education 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

4 About ‘Making the Grade’ Idea for the study was generated in 2010; we conducted the interviews in 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 A study of the top 10 trends in higher education4

5 “As funding dries up, some universities are heading into debt for the first time….” - Brian McKenna, Partner, Deloitte Canada Making the Grade A study of the top 10 trends in higher education5

6 Institutions are over-budget and underfunded As 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). As operating margins shrink, higher education institutions must find new ways to cut costs without sacrificing services Making the Grade A study of the top 10 trends in higher education6 1 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 Decreases in Funding

7 Making the Grade A study of the top 10 trends in higher education7 The rivalry intensifies Competition to attract the best students heats up 2 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

8 Although a global strategy makes sense for some institutions, it is not right for every school The top five reasons for going global* 8 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 The rivalry intensifies (cont’d) Competition to attract the best students heats up 2 Making the Grade A study of the top 10 trends in higher education According to a report by the International Association of Universities

9 Making the Grade A study of the top 10 trends in higher education9 The rivalry intensifies (cont’d) Competition to attract the best students heats up 2 “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.” Loic Jouenne, Partner, Deloitte France

10 Align regional offerings and meet stakeholder needs Making the Grade A study of the top 10 trends in higher education10 The rivalry intensifies (cont’d) Competition to attract the best students heats up 2 Articulate a global strategy to attract students and extend educational offerings Two strategies for consideration:

11 Setting priorities The danger of making decisions in the dark Old habits are hard to change - tough new realities challenge democratic decision-making: Making the Grade A study of the top 10 trends in higher education11 3 Challenges Internal environment is often not conducive to stark business approaches Consensus decision-making Slow to react Need for innovation, difficulty implementing it Complex governance structures Top-down accountability is problematic Conflicting stakeholder demands Potential Solutions Incorporate operational aspects into strategic planning Invest in data mining, financial analysis and IT systems to develop optimal service delivery models Rationalize redundant programs and discontinue costly ones Update curricula and align with market needs Enhance core competencies – look at options to outsource others Consider shared services and consolidation

12 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 Making the Grade A study of the top 10 trends in higher education12 4 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 Aging technology systems challenge institutions ability to manage rising demands from students and staff

13 Moving at the speed of cyberspace (con’t) Technology upgrades are needed across the board Disruptive innovation can change the way the world learns Making the Grade A study of the top 10 trends in higher education13 4 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

14 Rethinking infrastructure A renewed focus on asset optimization With looming financial insecurity, many institutions have adjusted their operations to: Making the Grade A study of the top 10 trends in higher education14 5 Monetizing existing assets Disposing of surplus assets Partnering with Private Sector Deferred Maintenance Financial Insecurity Fees and Revenues Scaling back or halting plans o Maximize existing sources of revenue (fees, parking) o Reduce costs o Slow spending and defer decisions

15 Linking programs to outcomes Where 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 Making the Grade A study of the top 10 trends in higher education15 6 Current Workforce Challenges “Institutions must ensure their educational agendas are in sync with forecast marketplace demands.” Arsh Maini, Senior Consultant, Deloitte India Institutions should look to: ‒ Continue to design programs that align with labour needs ‒ Apply common KPIs ‒ Be open to link outcomes to funding Need for renewed focus on vocational training

16 The best and the brightest Attracting and retaining talented faculty Making the Grade A study of the top 10 trends in higher education16 7 Faculty recruiting and retention Enhance teaching quality Measuring performance Strategic priorities 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 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 Potential Barriers

17 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 Making the Grade A study of the top 10 trends in higher education17 A sustainable future Enhancing environmental performance 8 Energy-efficient facilities IT energy reduction ‘Green Cleaning’ and maintenance practices ‘Greening’ institutional policy Environmental Responses “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

18 Education for all Tackling diversity, accessibility and affordability Access to education crosses social, cultural and geographic lines Governments struggle to educate hard-to-reach students: Making the Grade A study of the top 10 trends in higher education18 9 Income Disparity Disabilities Minority Groups Remote Areas Online programs Video streaming Other forms of digital education Financial aid programs targeted to unique student populations Diverse faculty Cultural diversity Education for All Potential Strategies

19 Regulations and reporting New responsibilities require better disclosure Governments around the world are increasing industry oversight: Making the Grade A study of the top 10 trends in higher education19 10 Allocation of research funds Student success rates Sustainability Outcomes Standards Rankings Increasing need for transparency Tighter Lending Standards Regulatory Complexity Cost Containment Funding Constraints Need for information management approaches/systems

20 Responding to Challenges 20Making the Grade 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 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. Operating margins A key driver of institutional profitability and how they can improve value captured between funding sources and their expenses. Asset efficiency 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. Expectations and strengths By leveraging true institutional capabilities and differentiators, institutions can compete for students at a lower cost than competitors 21Making the Grade 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 22Making the Grade A study of the top 10 trends in higher education 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

23 Higher education institutions must continue reducing their costs to widen operating margins 23Making the Grade A study of the top 10 trends in higher education 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.

24 Higher education institutions can also optimize the use of existing assets to improve performance 24Making the Grade A study of the top 10 trends in higher education Asset Efficiency Engage in talent management strategies to attract and retain the highest calibre faculty 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.

25 Higher education institutions can also enhance institutional brands to build on existing strengths 25Making the Grade A study of the top 10 trends in higher education 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

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 Making the Grade A study of the top 10 trends in higher education26 Innovate and evolve, do more with less, and ensure individuals contribute to global competitiveness

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