College with unstable finances? Investing in tech could help, reports say
Colleges facing an unstable financial future should up their technology investments to improve data insights, improve student and employee IT experiences and introduce tighter privacy and security protections to protect student data, according to reports published last week by the consulting firms Deloitte and EY.
Deloitte’s 2023 report on higher education trends said that college enrollment in the U.S. has reached its peak, necessitating change if institutions want to continue to grow even as the high school population shrinks. EY’s report also called on institutions to make big changes if they want to achieve financial sustainability, counter rising costs and overcome shrinking student enrollment.
While the outlook for the higher education sector is tough, both reports said institutions have a lot of opportunity to find niches and excel, ensuring their continued success. EY’s report warned, however, that failure to invest in the right places carries high stakes.
Making the right calls
“The technology agenda in higher education is as large as it is in any sector, encompassing digital channels, integrating and protecting data, and transforming middle and back-office operations,” the EY report reads. “The impact on financial sustainability is very material: get this right and you drive flexibility of delivery, improve your student experience and improve efficiency. Get it wrong, and you’re investing in technology with limited return, distracting staff and students with change that isn’t helping them learn, teach or research.”
To make good decisions, colleges need to base their investments on good data, the EY report said. Some decisions may be tough — and big technology investments can be costly — but “much of this spend will pay back by reducing existing technology spend, cutting people-related costs as processes streamline and in improved student attraction and retention thanks to a superior campus and online experience,” the report reads.
Demonstrating with data
Deloitte’s report also called on the importance of having good data, but to demonstrate the value of a college degree in a political environmental that is critical of higher education institutions.
“To succeed in this new era of higher education, institutions should more effectively measure outcomes that matter to parents, employers, and students pre- and post-graduation to make a clear case for the value of higher education, and specifically, for their institutions and programs,” the Deloitte report reads.
As state governments increasingly call for studies on the value of college degrees, colleges should not only engage in these conversations but try to lead them, the report said.
“Higher ed has got to figure out a way to speak with one voice on this topic,” Cole Clark, managing director of higher education at Deloitte, said in an interview.
Trust in higher education institutions is low, but data on the value of the degree in terms of lifetime earning potential, as well as non-economic terms such as quality of life and mental health, can help attract not only high school students, but the millions of learners with some college credit but no degree, Clark told EdScoop.
“Places like Western Governors University, where I serve on the board of trustees, are aggressively addressing that market,” Clark said.
Southern New Hampshire University, Arizona State University, Purdue University, Penn State and others have also succeeded in attracting adult learners by investing in the technology systems to support highly curated, high-touch programs that are accessible anytime, anywhere, he said.
Investing in better IT experiences
While student-facing IT systems are important, the Deloitte report says, so are retaining staff and creating a pipeline to train new administrative leaders. The report says institutions “need to start designing an employee experience that matches the time, effort, and energy that they have put into the student experience.” The report also says institutions seize all opportunities to “use technology or outsourcing to reduce work that is not core to the mission.”
By helping staff and administrators focus on work that matters, employee turnover at institutions can be reduced, giving college presidents and their senior leadership teams the stability to pursue long-term transformation strategies, Cole said.
“One area we didn’t get into as deeply in the report as I would have hoped is just how difficult it is for a president to gain any real traction, given the average tenure of today’s presidency is around five to six years. That’s just not enough time to make meaningful change,” Clark said.
Risk management, particularly the protection of student data, is another area that both reports highlighted as increasingly important for college leaders to think about when considering their institutions’ long-term financial sustainability. It’s not enough to “invest in a lot of fancy technology to build a moat around all of your assets,” Clark said, institutions also need a “strong sense of how you will recover” when something bad happens.
“Cybersecurity is as much a culture and people challenge in a higher ed setting as it is a technology challenge,” he said.