Skip to main content

Speeding Up On Curves

| June 2, 2015

by Jim Bruce

No, today’s Tuesday Reading is not bad driving advice!  The curves here are those Brad Wheeler, Vice President for Information Technology and Chief Information Officer for Indiana University and a professor of information systems in IU’s Kelly School of Business, is speaking of in his January/February 2014 EDUCAUSE Review essay “Speeding Up On Curves” which is our reading today.  (The article was also recommended reading for attendees at last week’s 2015 MOR Leaders Conference where Wheeler was a keynote speaker.)
The curves are those that help us understand:

  1. The financing of higher education
  2. The increasing digitization of education and research.

Everyone who has recently gone to college, paid tuition and fees for a student, or followed tuition announcements knows that the net cost of higher education is going up.  Tuition at private universities has increased at about three times the Consumer Price Index for several decades now, and at a similar rate for state colleges and universities for about a decade.  On a personal note, I began college in 1954 at Lamar State College in Beaumont, Texas.  My tuition for that fall was $45.00.  (That’s right, forty-five dollars.)  If you were to be a freshman (Texas Resident) at Lamar this coming fall, your tuition would be $3,680 (still a bargain compared to many other colleges and universities) but 82 times the tuition I paid.  This multiplier of 82 is two to eight times larger than other price increase multipliers I have identified for the same period.
So, the point is that tuition is increasing at a rate much higher than any other expense and along with decreases in available student aid is making it much more difficult for students and their families to afford college. 
How long can this situation continue to persist?  Professor Wheeler, in his essay, writes:  “The conclusion is that IU, along with other colleges and universities, must align its cost structure to what some have labeled ‘The New Normal’ even as it must compete more vigorously for great faculty, students, and research funding.”
He goes on to note that at a 2013 meeting of the research university CIOs, some pondered what it would look like to reduce the cost of administration by 50% and put those monies into the core institutional mission – scholarships, learning spaces, online learning, and research?  Someone else there suggested a perhaps more reasonable goal of reducing the gross cost by 20%.
The point is clear – college and university costs must come more inline with their income or these institutions will inevitably go out of business.
Professor Wheeler’s second curve focuses on the digitization of education and research.  He notes that in industry after industry going digital drives costs down as volume goes up.  He goes on to say that “As education – whether residential, blended, or fully online – goes increasingly digital, three components will most likely favor scale beyond any of our individual institutions:  content, distribution platforms, and analytics.”

Digital content, he notes, with its intensive creative digital experiences, measurement, and adaptation to an individual’s rate of learning, is expensive.  That suggests broad use will be required to achieve economies of scale and lower costs to the student.  Distribution platforms will likely become the way educational experiences, courses, and degrees are provided to on- and off-campus students.  Will these systems follow the software industry pattern of mergers and acquisitions and high switching costs between them.  Or, will other patterns arise?
As to analytics, every keystroke or click of an online engagement when correlated with other data on the student may provide the basis for greater insights into his or her academic work and progress towards goals.  Will learning science develop to the extent that it will enable better learning experiences for the student?
The big question is what will the curves for content, distribution platforms and analytics be.  Will this be a technology bust or will it be different?  If costs and performance are really improved, what will be the benefits and threats to colleges and universities?  What are the strategic threats if others bundle content, platforms, and analytics in ways that change or undermine the current value of educational offerings?

It’s easy to read this commentary and Professor Wheeler’s essay and say, “far above my pay-grade.”  I’d like to argue, Not so!  First, I’d argue, it is a call to be more effective in your work looking for ways to get better value from your and your group’s efforts.  And, second, I believe that this is an urgent call for everyone who does not have strong relationships with faculty and research staff to begin to build those relationships.  You want to make sure that your work has a strong positive connection to the teaching and research activities of your university.  You want to have a role in bending the curves in a direction that favors the mission of higher education.
Have a great week.  .  .  .     jim