Today’s Tuesday Reading is from Brian McDonald, Founder of MOR Associates. Brian may be reached at [email protected] or via LinkedIn.
Higher education is operating in a period of sustained financial constraint. For many institutions, this pressure is not cyclical, but structural. It is driven by enrollment declines for some, escalating compliance needs, growing security risks, reductions in federal funding for many, and growing expectations for digital services.
How to Respond Is a Strategic Choice
Too often, the response to financial pressure at a university has been tactical rather than strategic: incremental budget reductions, deferred investments, and localized cost cutting that slowly erode capability. The tactical approach risks creating a downward spiral. As capacity is reduced and systems age, risk increases, service quality declines, and the institution’s ability to innovate weakens.
The question facing university leaders is not simply how to spend less, but how to spend differently. How to spend more intentionally. How to leverage the total spend, as opposed to the way a decentralized organizational model may duplicate or fragment spending.
As one example, many consultants reviewing higher education institutions will point out a distributed procurement process is, by design, inefficient and wasteful. This process evolved over time due to the cultural value placed on local autonomy. Yet, the university as a whole is losing out on bulk purchases and on selected vendors that have been approved for quality and pricing.
The current moment presents an opportunity to rethink how information technology and other services are designed, governed, and delivered across the institution. Financial constraints can create the context in which leaders can confront long-standing structural inefficiencies that were accepted due to political, cultural, and historical reasons.
Adjusting total IT spend to support university IT for strategic leverage requires a shift in mindset. Rather than managing individual budgets, the objective is to create an integrated institutional capability. The goal is not to centralize for its own sake, but rather to align and improve services while reducing unnecessary spending, complexity, and risk.
Whether it is called Edge-Leverage-Trust, Core-Common-Unique, or goes by another name, certain capabilities create greater value when they are enterprise-wide.
Indiana University developed the edge-leverage-trust model over fifteen years ago as a framework for determining commodity services that could be leveraged for scale and efficiency, and what services may be unique, such as specialized academic applications. The University of Iowa and other schools adopted the core, common, and unique framework as a way to decide which services were in common, or core, while recognizing the unique ones reside in the local units.
Certain IT capabilities are inherently enterprise-wide. Cybersecurity, identity and access management, data protection, core infrastructure, and regulatory compliance are areas where fragmentation increases exposure and cost. No university benefits from managing these functions inconsistently across organizational boundaries. Quite to the contrary, many universities have experienced troublesome and costly incidents or breaches.
Security, after one incident and then another, has emerged as a defining challenge. Threats are growing in sophistication, regulatory expectations are increasing, and reputational risk is high. A decentralized approach to security seems empowering locally, but institutionally, it is not acceptable in this environment. Treating security as a shared enterprise responsibility is not a loss of autonomy; it is a recognition of reality.
Centralizing or standardizing these capabilities enables institutions to achieve economies of scale, deepen expertise, and invest in resilience. Just as importantly, it frees local IT capacity to focus on work that differentiates the institution.
Federated Models Work When Mission Drives Differentiation
Evolving IT design and university IT for strategic leverage does not imply uniformity. Universities are engines of discovery and learning, and their technology environments must support experimentation, disciplinary diversity, and rapid innovation. Research computing, specialized academic applications, and pedagogical tools often require proximity to faculty and deep domain knowledge.
The strategic choice is not to eliminate local decision-making, but to redefine it. A federated model, where local units retain control within clearly articulated enterprise guardrails provides flexibility while ensuring alignment with institutional standards for security, data stewardship, and interoperability. Local discretion becomes intentional rather than an artifact of historical evolution.
Turning Constraint into Advantage
The most important leadership insight in this moment is that financial pressure does not have to result in a downward spiral. With intentional design, it can drive modernization, risk reduction, and stronger alignment between technology and mission.
Institutions that use this moment to leverage their total IT spend, rather than simply reduce it, will emerge more resilient, more secure, and better positioned to support teaching, research, and student success. The real risk is not in change, but in allowing financial constraints to set the cost cutting strategy. Instead, financial constraints can inspire leaders to develop a more integrated model, working with the stakeholders to improve the enterprise services while optimizing the total spend.
How is your institution shifting university IT for strategic leverage?
Last week, we asked how you plan to start to further embrace your individual role in your team:
- 25% said think big picture
- 22% said stay curious
- 21% said measure your impact
- 19% said communicate clearly
- 13% said speak up
There are many ways we can contribute to our team. Being strategic was the top response, which is something important to keep in mind when facing financial constraints as well.