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Today’s economic, social, and environmental challenges are unprecedented. Skills required today – and tomorrow – for leadership and change are arguably in short supply from higher education institutions. We are at a crossroads in Higher Education today. Yet with challenge, comes opportunity: we have the chance to transform our institutions to better prepare our students and create a better future for all of us.

Let’s consider a few of today’s primary challenges:

  • Bifurcation: mirroring the socioeconomic climate in the U.S., higher education is increasing morphing into a top – and -bottom tier model. There is a degree of hegemony here: exclusive top tier schools largely pull students from top tier private preparatory schools; 14% of all top tier students are children of top tier alumni. Bottom tier schools are more technical focused, heavily on-line oriented, and suited to today’s average American student (age 26, with a domestic partner, and working 30 hours per week).

  • Supply exceeding Demand: the birth rate decline during the great recession (2008-13), coupled with expansion of many college programs in the same period has led to a glut of available supply – leading to academic mergers and bankruptcies. Wheelock College merging with Boston University, university systems in WI, CT, and GA combining programs and campuses are examples of this trend. Clayton Christensen (Harvard University) has predicted that half of all institutions will go bankrupt or close in the next decade

  • Spiraling Costs: State provided funding has declined by 16% (2008-17), while tuition costs have increased from roughly 50% - 75% in the same period.

  • Questioning the Value of Education: obtaining a portfolio of skills training from both institutional learning and real-world experience is emerging in many cases preferred to the traditional BA/BS path. While it remains true that college graduates earn 67% more over their careers than high school grads, approximately half of college grads out of school for 5 years or less are in jobs requiring high school diplomas.

Gloom and Doom?

Much like commercial sector approaches, buckling down into a back-to-basics operational excellence focused program can help address these issues. We are talking about starting with the fundamentals, and then evolving and maturing business processes by incorporating additional smart technologies when ready:

  1. Optimize: implementing a stable and scalable digital core to make processes more transparent and integrated.

  2. Extend: processes by connecting them to the real world using advanced technologies, including IoT, ML, RPA, conversational bots, etc.

  3. Transform: use a constant stream of data enabling new service-driven business models.

Step 1 - paying attention to the key businesses processes and streamlining to best practices wherever possible - sounds old school, but academic testimonials bear this out.

  • Purdue University: Embarked on an operational improvement program focused on finance, providing real-time, centralized information, and health care. They have frozen tuition since 2012; the savings from their operational efforts have contributed to their ability to do so. They eliminated 600,000 forms used annually, and cut 30,000 spreadsheets.

  • TED University: deployed more than 20 apps in less than four months to serve students and faculty members, with immediate access to academic and administrative services from any mobile device using a responsive, user-centric, and simple interface.

  • Tecnologico de Monterrey: with 150,000 students across 31 campuses in Mexico, understood improving employee efficiency was directly linked to student success and conducted an entire HR transformation resulting in improved staff and faculty retention and student success.


I welcome your feedback and the opportunity to share SAP’s solutions for Higher Education. Carol.mackenzie@sap.com