4 keys to survival in a rapidly changing ed-tech market

Connor Gray, chief strategy officer at Campus Management, shares four strategies for ed-tech leaders to adapt to new innovation

HR-PI-institutions(Editor’s note: This article is part of “Industry Insights,” a new column in which ed-tech executives offer advice and opinions for campus leaders to consider.)

When Borders Books opened in Ann Arbor, Mich., more than 40 years ago, the company was ahead of its time. The Borders brothers had created an inventory system that tailored each store’s offerings to its community. As recently as 2010, the company boasted 511 superstores in the U.S.

What a difference a year can make. When Borders liquidated its remaining stores in 2011, among the reasons cited for its demise was the company’s failure to foresee the rise of eBooks.

While the quality of higher education in the United States is the envy of the world, colleges and universities are approaching a critical inflection point in the way they do business. As with the bookstore industry, adapting to new innovation, technology, and delivery models will be critical to survival.

In my conversations with dozens of institutions within higher education, I’m hearing about similar challenges across multiple fronts. Greater competition, lower enrollment numbers, reduced funding, and changing demographics are impacting almost every institution. At the same time, we’re all trying to improve student outcomes (Borders was under no pressure to increase literacy while trying to survive market forces).

Higher education is not just sitting back, however. Most, if not all, colleges and universities are offering online education and services of some kind to attract more students and keep them enrolled. Still, offering online academics may not be the “eBooks” equivalent or panacea for higher education.

One of our most successful clients, an early adopter of online and emerging technologies as its model, has seen tremendous growth in its online programs, tripling enrollment year over year, but admits to feeling greater headwinds as more online programs come aboard. While the pool of applicants for this institution has remained fixed in the past several years, the number of online programs competing for those students has increased.

Today, it’s a basic supply-and-demand issue. You may still be able to squeeze out your enrollment numbers by offering online programs, but you may be lowering your prices and digging deeper into a degraded pool of students to hit those numbers. You’re achieving your recruiting goals, but now your revenue and retention rates are shrinking.

While the issues and dynamics of adapting to change are complex and often unique to each institution, some remedies may be found in an honest assessment of your current technology.

(Next page: Four strategies to help campus leaders adapt to change)

Go beyond “traditional” online academics

You may be offering online programs, but most student information systems, whether homegrown or a factory built, are still built around the traditional academic schedule. Can your student information system go beyond semesters and quarters to allow for flexible terms and emerging models? Or are your online programs simply the web version of your ground school, adhering to the same academic calendar and timelines for completion?

One way to differentiate from many existing online programs is to free students from the traditional academic calendar. Offering a combination of traditional, online, flexible terms and financial aid packaging that complements those terms is a transformational opportunity that can make your institution more competitive, even if the pool of students remains fixed or decreases.

Offer support for emerging models                                        

The next wave coming in higher education is likely to be competency-based education. Credit hours may still be the prevailing standard, but with President Obama’s endorsement of competency-based education and its focus on “performance and results” rather than chair time, it’s definitely one of the latest examples of how the higher education model is evolving…and rapidly.

The plus side of competency-based education is that you’re offering students an accelerated program that gives them credit for knowledge and skills gained through experience. Instead of a CFO with 20 years of real-world experience being forced to take introductory courses in pursuit of an MBA at some other institution, he or she is assessed for credit based on the expected learning outcomes for that course. Another benefit of this new model is that you reduce overhead for faculty and administrative staff.

The down side is that few competency-based programs have been approved for Title IV funding so far. Whether you choose to offer this option now or in the future, the system you have now should be flexible enough to accommodate it. It may be a trend today, but it reflects the desire of students to find faster and more economical alternatives to traditional education and the need for schools to run a more efficient organization given the downward pressure on enrollment and revenues.

Enable change

Whether it’s competency-based education or a light-bulb idea of your own, your technology system should allow you to quickly implement those ideas into your business processes.

For example, Campus Management is currently building a configuration for a client that wants to perform multiple disbursements of financial aid per student. Instead of a student receiving a lump sum at the beginning of the term, the school wants to release money a little at a time. This way, the school is protected if a student drops out two days or two weeks into the course. In the past, the student may have spent the entire leftover stipend after tuition and fees were paid, turning administrators into a collections department for the return of those funds. This new feature not only protects the school, but encourages students to stay in school and continue their studies.

Facilitate Retention Strategies

Increasing retention and compliance around student outcomes starts with higher quality in-bound students. That same university mentioned above looks at data from current students to build predictive models on what attributes to look for in prospective students. What’s more, it uses the same predictive algorithms as well as internal data on how employees and faculty are managing student expectations and outcomes to ensure continued success and retention.

This has saved the institution valuable time and contributed to student success. Over the past five years, that same college system has seen retention increase dramatically. It’s a level of success that would not be possible without an open system that provides greater visibility across departments and disparate systems.

Other institutions can achieve similar results, but most of the student information systems I have seen in higher education are designed for a bygone era. They don’t have the underlying infrastructure to respond to the market. Ovum, the industry analyst, talks about how colleges and universities today need to move from a tactical to a more transformational model to survive the current environment.

What the future holds no one really knows. But having an agile DNA from a technology perspective will be a key factor in whether an institution adapts to change, limps along, or becomes the next Borders Books.

Connor Gray is chief strategy officer at Campus Management.

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