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• Cognizant 20-20 Insights

Transformation Strategies for
Higher Education
As digital technology reshapes the fundamentals of the highereducation industry, the basic tenets of teaching and learning that have
endured for centuries are being turned on their heads — compelling
institutions in this sector to adopt a new playbook to remain relevant.
Executive Summary

Business Megatrends

Now more than ever, understanding the intricacies of technology transformation is critical to
staying relevant in the higher education environment. The technology landscape has changed
dramatically over the past 15 years, along with
the baseline expectations of the modern learner.
Understandably, higher-education institutions
are pressured to meet these new requirements —
from personalized and affordable learning, to
social media-based learning tools, mobile apps
and 24/7 availability of administrative services.

Changing customer demographics, behaviors and
expectations. Revenue pressure. Increasing sensitivities surrounding the return on investment
for dollars spent on higher education. All are
driving a fundamental transformation across the
education ecosystem (See Figure 1, next page).

The successful adoption and implementation of
these technologies and their underlying infrastructure can be a daunting and complex effort
encompassing a comprehensive evaluation of
strategies, human resources, processes and technologies.
This white paper explores the business and
technology drivers causing change within higher
education, describes the new playbook for transformational initiatives and reveals success factors
critical to a meaningful business transformation
effort.

cognizant 20-20 insights | november 2013

The Student as a Savvy Customer
Today’s higher-education customer relies on
university Web sites, student satisfaction ratings
(as reflected on social media sites) and university
ranking guides when making decisions on where
to study. Millenials who have grown up on
Facebook, Twitter and YouTube are far less likely
to be excited about reading a 500-page textbook
or traveling miles to listen to a lecture than
previous generations.
Interacting with these students requires managing
more communication channels than ever before.
Decisions about when and how often to interact
with prospective students, what content to communicate and what media channels to leverage for
delivery are critical components of an effective
enrollment strategy.
The Education Ecosystem
Consumers

Digitizers

Administration

• Pre-K and K-12.
• Colleges and Universities.
• Professional, Voluntary

Alliances

Education Providers

Faculty and Staff

and Involuntary Institutes.

• Penn State, Harvard,

Education
Publishers

Content Creators

ip

• Textbook Publishers.
• Journals and

Content Aggregators

Course Content.

• Skillsoft, Oracle, etc.

until the
ion

Education
Ecosystem

ra
tio
n

po

Content Creators

• Coaching and Training

Professional
Associations

• External Certifying
• Education

Examiners

University Press,
ETS, etc.

ip

Agencies.

• Testing Agencies.
• Assessment providers.
• Cambridge

sh

Co
r

Training, Testing
and Assessment

ion
lat
Re

Content Distribution

a
Coll

Institutes.

Magazines.

Printers

tion

bora

• Curriculum Designers.
• McGraw-Hill,
Pearson, Macmillan,
HMH, etc.

Distribution modes

• VSat services.
• Virtual Smart Classrooms.
• Internet and Mobile

t mile
las

ersh

Ince
pt

Apollo Group, etc.

Part
n

Technology Providers

Auditors

Associations.

• E.g. CFA Institute,
Study Group.

Certificates

Specialization

Figure 1

Personalized, Affordable and
Outcome-Based Learning
Higher education customers now expect affordability as well as more services. Likewise, many
institutions are driven by tuition income —
and better student services cost more money.
Today’s university leaders seek an appropriate
balance between these opposing forces. The
reduction in entry barriers has resulted in new
players entering the market with affordable and
innovative learning solutions.
For example, massive open
Monolithic and online courses (MOOCs) address
linear pedagogical a growing customer segment
a cost-effective
models will soon be looking for with a degree or way
of learning,
cera thing of the past. tification not necessarily being
the end objective. Outcomebased and adaptive learning processes bring
personalized learning experiences attuned to
the distinct learning capabilities of individuals.
This often results in improved learning outcomes.
Monolithic and linear pedagogical models will
soon be a thing of the past.
Increased Public Scrutiny
External higher-education constituents (tax
payers, students and their families, government
regulators and industry analysts, etc.) are
increasingly monitoring tuition levels, academic

cognizant 20-20 insights

outcomes and process efficiency within the higher-education industry. Since individuals seeking
higher education often require tax payer-funded
grant aid such as Pell, and loan/self-help like Ford
Direct Loans, the general public is more interested
in the economic impact of higher education on
students. As a result, all levels of government
are making adjustments to age-old reporting
requirements — and creating new challenges for
university leadership.
Tuition and fees at public universities have surged
almost 130% over the last 20 years — while middle
class incomes have stagnated.1 With the costs
of higher education increasing faster than the
median income levels of most families in the U.S.,
there is growing concern among students about
carrying hefty loans when starting their careers —
particularly amid a shaky global economy. Hence,
customers are expected to look for avenues that
offer a greater return on investment for their
higher-education needs.
External Funding Levels
Over the last three decades, the amount of
state funding for higher education has steadily
decreased. This has resulted in institutions
seeking new funding sources such as research
and philanthropy. However, the area of highest
growth has been tuition. More than 40 U.S. states

2
reported a budget deficit for the 2012 fiscal
year2 (CNN 2013). As states look to balance their
budgets, education funding levels will be carefully
scrutinized.
Universities will likely continue to be challenged
by the uncertainty around funding sources, with
the burden of higher education increasingly
falling on the shoulders of students and their
families.
Outsourcing Contextual Services
As budgets tighten, universities are re-evaluating what student services can be provided costeffectively. In past years, higher education has
outsourced bookstores, dining services and plant
operations to optimize costs. More recently, institutions have outsourced e-mail services to Google
and Microsoft. Other services ripe for outsourcing
include:

•	 Curriculum development: New programs that
meet market demand need to be developed
quickly. Full-time faculty generally have several
responsibilities, and are not always able to
contribute sufficient time to curriculum development or help implement a new program in a
timely manner.

•	 IT support desk: Today, students want to learn
anytime/anywhere — placing an additional
burden on IT support teams.

•	 Institutional research: In addition to the fact

that campuses have many more reporting
requirements, gathering information from a
multitude of databases is a challenging task.

•	 Business

intelligence (decision support):
A single version of the truth is essential for
effective decision making. Implementing a data
warehouse makes this possible, and is critical
for supporting the strategic planning process.

•	 Project

management: In addition to the
everyday support that is provided by the IT
team, other projects such as database, Web
site and server upgrades need to be taken
care of. External project managers have
access to the right people with the appropriate
domain knowledge to efficiently execute these
functions.

Achieving Academic Excellence in
an Adverse Economy
Changing expectations from millennial customers, competition from niche players, funding pressures and increased scrutiny from various stake-

cognizant 20-20 insights

holders notwithstanding, institutions of higher
education are still expected to be centers of excellence — attracting the best brains from student
and teacher communities, fostering research and
innovation, and opening the doors for successful careers. Degrees from ultra-elite institutions
(MIT, Harvard, etc.) are expected to continue to
be in high demand, given their high recall values
and exceptional lifelong networking reach. This
may not be the case with institutions just below
that level.
As online and distance learning programs
become more popular, they will need to operate
in an environment of diminished budgets and
cost pressures. Technology budgets are likely to
remain flat, and institutions will look for ways to
be effective and grow in the midst of tight cost
constraints.

Technology Megatrends
The business changes described in the previous
section have propelled technology innovation
and disruptions. In addition, like almost every
other industry, the SMAC StackTM (comprising
social, mobile, analytics and cloud technologies)
is disrupting the way higher education players
engage their customers and partners and run
their businesses.
The Impact of Mobile Apps
Smartphone adoption has reached nearly 45%
for American adults and 66% for those in the
18 to 29 age bracket. Learners are increasingly choosing to consume media through
these devices.3 IOS and Android smartphone
adoption rates have surpassed that of any
customer technology in history, including social
networking.4 With the increasing availability of
network infrastructures and the growing number
of smartphone and tablet users, the mobile app
market is becoming an important part of higher
education.
Mobile apps are being used by higher education
institutions to allow students greater access to
administrative functions such as registration,
financial aid and student billing. Mobile apps are
also being used for teaching and learning. The
Apple Store, for example, has over 20,000 education-focused applications. While not all of these
are targeted at the higher education audience,
the number of applications will continue to grow,
and the available features for augmenting the
learning process will improve.5

3
Digital Delivery
The college textbook market is making the
transition to digital delivery. According to the
Book Industry Study Group (BISG), students still
show a preference for the printed text, but that
number is trending downward. The group’s 2012
study revealed that 60% of students prefer the
printed text, down from 72% in 2011. Tablet use
for reading digital textbooks increased from 26%
in 2011 to 37% in 2012.6
Students are increasingly motivated to use
digital textbooks because of their convenience
(carrying a “reader” rather than multiple physical
textbooks), interactivity (highlighting of relevant
content and “linked” definitions for words in the
text), and the potential cost savings.
Social Media and Customer
Relationship Management
Engaging the modern student requires managing
several communication channels, with social
media being an increasingly important one.
According to a recent Nielsen Media report,
social networks and blogs now account for nearly
25% of total time spent on the Internet. Recruitment efforts within higher education use social
media extensively to connect with and research
potential prospects.7

The modern learner, whether a millenial or an
adult, has high expectations in terms of service.
Many learners manage difficult schedules that
require that they be able to accomplish their
learning anytime and anywhere. Some campuses
refer to CRM more generically as the “student
portal” or “global home,” since it serves as a
single online location for the student to connect
with various learning tools and administrative
functions.
CRM can be purchased as a single application.
However, it is often integrated with the student
information system (SIS). Access to the appropriate resources is enabled by assigning the student
login the appropriate “role.” When the student
enters her login and password (authentication),
the associated roles for the student determine
what resources are available through a Web
portal (authorization).
Business Intelligence
Understanding the marketplace and assessing
the learning process have never been more
critical for higher education institutions. Competition to recruit the right student has increased,
the recruited student expects better services, and
the larger community (e.g., taxpayers) expects to
see appropriate educational outcomes.

New Technologies Changing the Learning Environment

odels

Delivery M

• Blended
• Traditional
• Flipped
• Online

e Ideas

Innovativ

• MOOCs
• School as a Service
• Adaptive Learning
• eTextbooks
• Social
• Mobility
• Tablets
• Smartphones
• Analytics
• Cloud Solutions

Figure 2

cognizant 20-20 insights

4

rs

nable

Tec

gy E
hnolo
Popular higher education terms that can be
associated with BI are “assessment” and “learning
analytics.” These terms are generally related to
the concept of measuring student learning or
learning outcomes. With the advent of big data,8
more information is available for analysis than
ever before — from learning patterns and student
preferences, to public opinion and feedback.
Regional accreditation agencies, faculty and
university presidents are very interested in
gleaning insights and making more informed
decisions from this information.

emerging economies with massive knowledgehungry populations like China, India and Brazil
are a vast new market, youth in the developed
world are also looking to develop skills that will
help them compete in the global economy. The
growing revenue potential of this new market
could very well end up compensating for (or
even surpassing) that of the traditional “oncampus” customer base.

•	 Enable teacher and student success: Leading

colleges and universities can identify key areas
of learning, use their best professors to create
online lectures and use them as part of online
learning programs, hence taking the expertise
of their best teaching
minds to a vastly greater The old mindset of
audience. The old mindset
learning scarcity —
of learning scarcity —
limiting the audience limiting the audience
for their best professors for their best
and classrooms — must
professors and
give way to a more open
approach of taking the classrooms — must
best teachers to students give way to a more
across the globe, using
open approach of
technology as a tool.

As a result of the aforementioned business and
technology megatrends, the components of
the higher education business model — tuition
and net revenue models, marketing, enrollment
strategy and content distribution — will evolve
drastically. Not only are core business processes
being altered by technological advances, but the
ways in which individuals use technology to learn
are shifting as well. Effective sharing, collaboration, virtualization and innovation are emerging
as essential ingredients of the physical or virtual
classroom (see Figure 2, previous page).

The Playbook for Transformation
Based on our deep understanding of the higher
education marketplace and our work with several
industry-leading organizations, we believe that
the following elements should form the crux
of any transformational strategy for higher
education institutions.

•	 Build scale on the cloud:

Building scale has been
a traditional challenge
for institutions of higher
learning, be it creating
the physical infrastructure for accommodating more students, or the
technical infrastructure for managing learning
platforms and administrative activities. By
hosting learning programs and solutions on
the cloud, the problem of building scale can be
managed and resolved effectively. Cloud-based
national or global content delivery platforms
can offer economies of scale, reduce operational overheads and offload work that adds little
or no value. In this way, the organization can
focus on its core objective of providing better
learning outcomes to students.

•	 Rethink your positioning: Today’s customers

expect continuous engagement, with the
most up-to-date information in their areas of
learning across a variety of digital platforms.
As customer expectations and technology
paradigms change, organizations operating in
the higher education industry need to evaluate
if they should think of themselves as media
and information services players as well. Many
of the business and technology imperatives
for media and information services organizations, such as data as a service (DaaS),
freemium payments,10 smart content,11 big data
and analytics, and rich media12 are increasingly
applicable to the higher education segment.

•	 Convert

learning data into insights and
foresights: Online learning platforms provide
an unprecedented opportunity to capture
information about the learning preferences
and patterns, areas of expertise and core skill
sets of students. This rich information can be
used to fine-tune and customize the learning
process for each student, either through
automated learning algorithms or teacher
intervention. This information can also be used

•	 Make

the world your campus: Aided by
technology, institutions of higher education
now have the opportunity to take their
courses to an exponentially greater number
of customers across the globe, who they
would never be able to reach otherwise. While

cognizant 20-20 insights

taking the best
teachers to students
across the globe, using
technology as a tool.

5
to cross-sell more products and services. On
the other end of the spectrum, insights into the
unique skills of their customers could prove to
be invaluable to potential recruiters. Analytics
can open a host of hitherto unknown possibilities of monetization.

•	 Explore affiliated services: In order to main-

tain a persistent connection with customers
beyond their core learning outcomes, higher
education players should explore the associated services they can offer. Options such as
curriculum design, placement and career services, corporate training services, enrollment
and admissions services can be explored.

•	 Leverage cost benefits in operations: While

colleges and universities might regard the
reduction in enrollment of their full-time
on-campus courses as a hit on their revenue,
the resulting reduction in infrastructure
costs like real estate, power, staff salaries
and physical security can ease the pain of
decreased government funding to some
extent. Universities and colleges should look
to run a tighter ship by shaving administrative costs, eliminating high-cost, low-demand
programs, reconsidering course durations and
credit requirements, and reducing energy consumption, for example. Online courses do not
have the same overhead costs as classroom
programs. Partnering with online education
service providers and MOOCs can help further
lower the cost of online course development.13

•	 Train teachers and plan for change: The use

of technology can be overwhelming for many
teachers, including the best and most loved
by students. Institutions, as well as others in
the educational ecosystem, must carefully
develop the benefits they want to target and
tailor appropriate roles for technology. With
a plethora of technology options available to
teachers, selecting the right tools can be the
difference between a successful — or unsuccessful — online program. In today’s digital
ecosystem, the packaging and mode of delivery
of content is as critical to success as the content
itself. Institutions of higher learning should
carefully evaluate the technology enablers that
are best suited for their subject area, student
preferences and teacher competencies. Simply
“throwing” technology at this challenge can
actually create worse outcomes for students,
teachers, institutions — and budgets.

cognizant 20-20 insights

A Business Transformation Framework
To formulate the right strategy for a transformative effort within a rapidly changing environment, it is crucial that a robust and welldefined framework is in place. Such a framework
must evaluate an organization across internal
and external variables, along a holistic set of
parameters. Our Cognizant Value Discovery
Assessment (CVDA)14 is a proprietary tool and
framework that informs, transforms and communicates an organization’s strategy. The
CVDA’s value is in its ability to deliver a relative
diagnosis of the current and planned strategies,
and prioritize the areas of change and focus that
the organization should pursue. CVDA evaluates
the current and future enterprise transformation
strategies against the top four levers that deliver
value in higher education:

•	 Efficiency: Optimizing the cost structure of the
institution, streamlining processes, reducing
waste and understanding what programs
produce the most value.

•	 Effectiveness:

Improving productivity and
operational performance in areas such as
quality control, student satisfaction and quicker
response to market changes (program development to meet student needs and interests).

•	 Virtualization:

Sharing learning processes,
knowledge and technology both within and
outside the institution in a collaborative and
flexible manner.

•	 Innovation:

Fostering the capacity to create
new programs and student services that will
result in new revenue streams.

In the information, media and entertainment
space, we have used the CVDA framework
(see Figure 3, next page) to define long-term
business transformation strategies for a global
publisher of higher education content and a
leading U.S. performing rights organization. We
charted variables such as the strength of the
organization’s core business, customer focus,
revenue diversification, digital strategy, data and
analytics, technology footprint, management of
costs, strategic partnerships and globalization
initiatives across the four CVDA dimensions.
A mapping of the CVDA “diamond” for the client
organization against CVDA diamonds of competitors and industry (created through in-depth
primary and secondary research) reflected the

6
areas of focus that should define their business
strategies, and the consequent future state
of their systems and processes. Based on our
experience, we believe that this framework can be
used as effective tool for defining the transformation roadmap for players in the higher education
sector.

an institution may have to migrate course
curriculum for online delivery.

•	 Accelerate time to market: Many institutions

are steeped in history, and have traditionally been slow to adapt to changing market
dynamics. In today’s environment, business
model lifecycles can be short. To contend with
change, these organizations must find ways to
quickly embrace newer business and operating
models, and offer new services with greater
revenue potential. Delays in initiating or implementing new initiatives can cause an organization to miss the next big wave.

Critical Success Factors
The success or failure of any business transformation effort largely depends on a few key variables.
We believe that players in the higher education
market need to keep the following factors in mind
during their transformation journey.

•	 Agility and Flexibility: With the technology
landscape changing at the speed of thought,
organizations must be flexible in their
approaches to meeting customer needs.
To support business transformation, an
organization may need to nurture a set of
capabilities it does not currently possess.
For example, a higher education institution
may need to transfer student experiences,
learning workflows and engagement to mobile
platforms. In order to provide the flexible
schedules that the modern learner needs,

•	 Improve customer connections: If an organi-

zation does not know what its customers are
thinking on a real-time basis, it will gradually
lose the ability to invest and monetize relevant
content and opportunities. Tools that mine conversations on popular social media platforms
and analyze user sentiment can be used to feel
the pulse of the customer. This is especially
relevant in higher education, since the overwhelming majority of customers come from
the age group that is most active on social
media.

Cognizant Value Discovery Assessment Framework
• Improved capital productivity/utilization.
• Developing offerings through strategic

Virtualization

partnerships and joint ventures.

• Cloud offerings.

Effectiveness

Innovation

• Productivity/quality

• Innovation.
• Revenue enhancements.
• New business models

improvement.
• Enhancement/expansion
of existing capabilities and
business models.

and capabilities.

Efficiency

• Cost reduction and control.
• Lowering effort while
improving output.

Figure 3

cognizant 20-20 insights

7
•	 Partnerships:

As technology shifts force
higher education players to enter uncharted
waters, the importance of key partnerships in
areas such such as IT infrastructure, MOOCs,
learning management systems, semantic
search and content enrichment is increasing.
Partners can feed off one another’s expertise
and take more compelling learning solutions
and services to customers.

Looking Ahead
Higher education institutions will continue to
face major challenges from new competitors,
changing customer behavior and an unfavorable
regulatory environment. A prospective learner’s
ecosystem will also continue to change, as will
their expectations for appropriate and effective
learning services. The variable that can and
should be managed is how quickly your institution
can adapt to meet the market’s needs.

Footnotes
1	

Surging college costs price out middle class. http://money.cnn.com/2011/06/13/news/economy/college_
tuition_middle_class/index.htm.

2	

CNN. State Budget Deficits. April 11, 2013. http://www.cnn.com/interactive/2011/02/politics/table.state.
budgets/ (accessed April 11, 2013.

3	

Rainie, Lee. “Smartphone Ownership Update: September 2012.” Pew Internet & American Life Project.
September 11, 2012. http://pewinternet.org/Reports/2012/Smartphone-Update-Sept-2012/Findings.aspx
(accessed March 26, 2013).

4	

Farago, Peter. “The Flurry Blog.” August 27, 2012. http://blog.flurry.com/bid/88867/iOS-and-AndroidAdoption-Explodes-Internationally (accessed March 27, 2013).

5	

Lytle, Ryan. “5 Apps College Students Should Use This School Year.” September 21, 2012.
http://www.usnews.com/education/best-colleges/articles/2012/09/21/5-apps-college-students-shoulduse-this-school-year (accessed March 26, 2013).

6	

Book Industry Standard Group (BISG) press release. January 25, 2013.
http://www.bisg.org/news-5-815-press-releasestudent-response-to-digital-textbooks-climbs-says-newbisg-study.php (accessed March 26, 2013).

7	

Nora Ganim Barnes and Ava M. Lescault. Social Media Adoption Soars as Higher-Ed Experiments and
Reevaluates Its Use of New Communications Tools. 2010. http://www.umassd.edu/cmr/studiesandresearch/socialmediaadoptionsoars/ (accessed March 26, 2013).

8	

Big Data is the term for a collection of data sets so large and complex that it becomes difficult to process
using on-hand database management tools or traditional data processing applications.
http://en.wikipedia.org/wiki/Big_data.

9	

Data as a Service is based on the concept that the product, data in this case, can be provided on demand
to the user regardless of geographic or organizational separation of provider and consumer.
http://en.wikipedia.org/wiki/Data_as_a_service.

10	

Freemium is a business model by which a proprietary product or service is provided free of charge, but
money (premium) is charged for advanced features, functionality, or virtual goods. http://en.wikipedia.
org/wiki/Freemium.

11	

Smart Content is information, typically originating in unstructured formats, that is findable, reusable,
more profitable (however measured) for the producer, and more useful for the consumer. Six Definitions
of Smart Content http://www.informationweek.com/software/business-intelligence/six-definitions-ofsmart-content/228901459.

12	

Rich media refers to products and services on digital computer-based systems which respond to the
user’s actions by presenting content such as text, graphics, animation, video, audio, games, etc.
http://en.wikipedia.org/wiki/Interactive_media.

13	

How Online Education Saves Everyone Money. http://www.nationaljournal.com/next-economy/solutionsbank/how-online-education-saves-everyone-money-20130425.

14	

A New Value Creation Model. http://www.cognizant.com/InsightsWhitepapers/A-New-Value-CreationModel.pdf.

cognizant 20-20 insights

8
About the Authors
PK Prasanna is an Assistant Vice President in Cognizant Business Consulting’s Information Media &
Entertainment Practice. A a transformational business leader, his expertise in digital technology strategy,
innovative product development and market insight have built new revenue streams and market advantage
in consulting and industry. Additional areas of expertise include digital media, cloud computing, mobility
and data analytics with complement of Wharton MBA. PK can be reached at PK.Prasanna@cognizant.com.
Shubham Choudhury is a Senior Consultant in Cognizant Business Consulting’s Information Media &
Entertainment Practice. He has eight-plus years of business consulting experience across education, information, publishing, advertising, market research and entertainment industries in multiple geographies.
His areas of expertise include solution envisioning, portfolio analysis, process consulting and business
development. A certified scrum master (CSM), he also holds an MBA from NITIE, Mumbai, India, and
bachelor of engineering degree in computer sciences from BIT, Durg, India. Shubham can be reached at
Shubham.Choudhury@cognizant.com.

Acknowledgment
The authors would like to recognize the contributions of Philip Guth, a higher education industry expert,
to the white paper.

About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in
Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry
and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50
delivery centers worldwide and approximately 164,300 employees as of June 30, 2013, Cognizant is a member of the
NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing
and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.

World Headquarters

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Email: inquiry@cognizant.com

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Email: infouk@cognizant.com

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©
­­ Copyright 2013, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is
subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.

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Transformation Strategies for Higher Education

  • 1. • Cognizant 20-20 Insights Transformation Strategies for Higher Education As digital technology reshapes the fundamentals of the highereducation industry, the basic tenets of teaching and learning that have endured for centuries are being turned on their heads — compelling institutions in this sector to adopt a new playbook to remain relevant. Executive Summary Business Megatrends Now more than ever, understanding the intricacies of technology transformation is critical to staying relevant in the higher education environment. The technology landscape has changed dramatically over the past 15 years, along with the baseline expectations of the modern learner. Understandably, higher-education institutions are pressured to meet these new requirements — from personalized and affordable learning, to social media-based learning tools, mobile apps and 24/7 availability of administrative services. Changing customer demographics, behaviors and expectations. Revenue pressure. Increasing sensitivities surrounding the return on investment for dollars spent on higher education. All are driving a fundamental transformation across the education ecosystem (See Figure 1, next page). The successful adoption and implementation of these technologies and their underlying infrastructure can be a daunting and complex effort encompassing a comprehensive evaluation of strategies, human resources, processes and technologies. This white paper explores the business and technology drivers causing change within higher education, describes the new playbook for transformational initiatives and reveals success factors critical to a meaningful business transformation effort. cognizant 20-20 insights | november 2013 The Student as a Savvy Customer Today’s higher-education customer relies on university Web sites, student satisfaction ratings (as reflected on social media sites) and university ranking guides when making decisions on where to study. Millenials who have grown up on Facebook, Twitter and YouTube are far less likely to be excited about reading a 500-page textbook or traveling miles to listen to a lecture than previous generations. Interacting with these students requires managing more communication channels than ever before. Decisions about when and how often to interact with prospective students, what content to communicate and what media channels to leverage for delivery are critical components of an effective enrollment strategy.
  • 2. The Education Ecosystem Consumers Digitizers Administration • Pre-K and K-12. • Colleges and Universities. • Professional, Voluntary Alliances Education Providers Faculty and Staff and Involuntary Institutes. • Penn State, Harvard, Education Publishers Content Creators ip • Textbook Publishers. • Journals and Content Aggregators Course Content. • Skillsoft, Oracle, etc. until the ion Education Ecosystem ra tio n po Content Creators • Coaching and Training Professional Associations • External Certifying • Education Examiners University Press, ETS, etc. ip Agencies. • Testing Agencies. • Assessment providers. • Cambridge sh Co r Training, Testing and Assessment ion lat Re Content Distribution a Coll Institutes. Magazines. Printers tion bora • Curriculum Designers. • McGraw-Hill, Pearson, Macmillan, HMH, etc. Distribution modes • VSat services. • Virtual Smart Classrooms. • Internet and Mobile t mile las ersh Ince pt Apollo Group, etc. Part n Technology Providers Auditors Associations. • E.g. CFA Institute, Study Group. Certificates Specialization Figure 1 Personalized, Affordable and Outcome-Based Learning Higher education customers now expect affordability as well as more services. Likewise, many institutions are driven by tuition income — and better student services cost more money. Today’s university leaders seek an appropriate balance between these opposing forces. The reduction in entry barriers has resulted in new players entering the market with affordable and innovative learning solutions. For example, massive open Monolithic and online courses (MOOCs) address linear pedagogical a growing customer segment a cost-effective models will soon be looking for with a degree or way of learning, cera thing of the past. tification not necessarily being the end objective. Outcomebased and adaptive learning processes bring personalized learning experiences attuned to the distinct learning capabilities of individuals. This often results in improved learning outcomes. Monolithic and linear pedagogical models will soon be a thing of the past. Increased Public Scrutiny External higher-education constituents (tax payers, students and their families, government regulators and industry analysts, etc.) are increasingly monitoring tuition levels, academic cognizant 20-20 insights outcomes and process efficiency within the higher-education industry. Since individuals seeking higher education often require tax payer-funded grant aid such as Pell, and loan/self-help like Ford Direct Loans, the general public is more interested in the economic impact of higher education on students. As a result, all levels of government are making adjustments to age-old reporting requirements — and creating new challenges for university leadership. Tuition and fees at public universities have surged almost 130% over the last 20 years — while middle class incomes have stagnated.1 With the costs of higher education increasing faster than the median income levels of most families in the U.S., there is growing concern among students about carrying hefty loans when starting their careers — particularly amid a shaky global economy. Hence, customers are expected to look for avenues that offer a greater return on investment for their higher-education needs. External Funding Levels Over the last three decades, the amount of state funding for higher education has steadily decreased. This has resulted in institutions seeking new funding sources such as research and philanthropy. However, the area of highest growth has been tuition. More than 40 U.S. states 2
  • 3. reported a budget deficit for the 2012 fiscal year2 (CNN 2013). As states look to balance their budgets, education funding levels will be carefully scrutinized. Universities will likely continue to be challenged by the uncertainty around funding sources, with the burden of higher education increasingly falling on the shoulders of students and their families. Outsourcing Contextual Services As budgets tighten, universities are re-evaluating what student services can be provided costeffectively. In past years, higher education has outsourced bookstores, dining services and plant operations to optimize costs. More recently, institutions have outsourced e-mail services to Google and Microsoft. Other services ripe for outsourcing include: • Curriculum development: New programs that meet market demand need to be developed quickly. Full-time faculty generally have several responsibilities, and are not always able to contribute sufficient time to curriculum development or help implement a new program in a timely manner. • IT support desk: Today, students want to learn anytime/anywhere — placing an additional burden on IT support teams. • Institutional research: In addition to the fact that campuses have many more reporting requirements, gathering information from a multitude of databases is a challenging task. • Business intelligence (decision support): A single version of the truth is essential for effective decision making. Implementing a data warehouse makes this possible, and is critical for supporting the strategic planning process. • Project management: In addition to the everyday support that is provided by the IT team, other projects such as database, Web site and server upgrades need to be taken care of. External project managers have access to the right people with the appropriate domain knowledge to efficiently execute these functions. Achieving Academic Excellence in an Adverse Economy Changing expectations from millennial customers, competition from niche players, funding pressures and increased scrutiny from various stake- cognizant 20-20 insights holders notwithstanding, institutions of higher education are still expected to be centers of excellence — attracting the best brains from student and teacher communities, fostering research and innovation, and opening the doors for successful careers. Degrees from ultra-elite institutions (MIT, Harvard, etc.) are expected to continue to be in high demand, given their high recall values and exceptional lifelong networking reach. This may not be the case with institutions just below that level. As online and distance learning programs become more popular, they will need to operate in an environment of diminished budgets and cost pressures. Technology budgets are likely to remain flat, and institutions will look for ways to be effective and grow in the midst of tight cost constraints. Technology Megatrends The business changes described in the previous section have propelled technology innovation and disruptions. In addition, like almost every other industry, the SMAC StackTM (comprising social, mobile, analytics and cloud technologies) is disrupting the way higher education players engage their customers and partners and run their businesses. The Impact of Mobile Apps Smartphone adoption has reached nearly 45% for American adults and 66% for those in the 18 to 29 age bracket. Learners are increasingly choosing to consume media through these devices.3 IOS and Android smartphone adoption rates have surpassed that of any customer technology in history, including social networking.4 With the increasing availability of network infrastructures and the growing number of smartphone and tablet users, the mobile app market is becoming an important part of higher education. Mobile apps are being used by higher education institutions to allow students greater access to administrative functions such as registration, financial aid and student billing. Mobile apps are also being used for teaching and learning. The Apple Store, for example, has over 20,000 education-focused applications. While not all of these are targeted at the higher education audience, the number of applications will continue to grow, and the available features for augmenting the learning process will improve.5 3
  • 4. Digital Delivery The college textbook market is making the transition to digital delivery. According to the Book Industry Study Group (BISG), students still show a preference for the printed text, but that number is trending downward. The group’s 2012 study revealed that 60% of students prefer the printed text, down from 72% in 2011. Tablet use for reading digital textbooks increased from 26% in 2011 to 37% in 2012.6 Students are increasingly motivated to use digital textbooks because of their convenience (carrying a “reader” rather than multiple physical textbooks), interactivity (highlighting of relevant content and “linked” definitions for words in the text), and the potential cost savings. Social Media and Customer Relationship Management Engaging the modern student requires managing several communication channels, with social media being an increasingly important one. According to a recent Nielsen Media report, social networks and blogs now account for nearly 25% of total time spent on the Internet. Recruitment efforts within higher education use social media extensively to connect with and research potential prospects.7 The modern learner, whether a millenial or an adult, has high expectations in terms of service. Many learners manage difficult schedules that require that they be able to accomplish their learning anytime and anywhere. Some campuses refer to CRM more generically as the “student portal” or “global home,” since it serves as a single online location for the student to connect with various learning tools and administrative functions. CRM can be purchased as a single application. However, it is often integrated with the student information system (SIS). Access to the appropriate resources is enabled by assigning the student login the appropriate “role.” When the student enters her login and password (authentication), the associated roles for the student determine what resources are available through a Web portal (authorization). Business Intelligence Understanding the marketplace and assessing the learning process have never been more critical for higher education institutions. Competition to recruit the right student has increased, the recruited student expects better services, and the larger community (e.g., taxpayers) expects to see appropriate educational outcomes. New Technologies Changing the Learning Environment odels Delivery M • Blended • Traditional • Flipped • Online e Ideas Innovativ • MOOCs • School as a Service • Adaptive Learning • eTextbooks • Social • Mobility • Tablets • Smartphones • Analytics • Cloud Solutions Figure 2 cognizant 20-20 insights 4 rs nable Tec gy E hnolo
  • 5. Popular higher education terms that can be associated with BI are “assessment” and “learning analytics.” These terms are generally related to the concept of measuring student learning or learning outcomes. With the advent of big data,8 more information is available for analysis than ever before — from learning patterns and student preferences, to public opinion and feedback. Regional accreditation agencies, faculty and university presidents are very interested in gleaning insights and making more informed decisions from this information. emerging economies with massive knowledgehungry populations like China, India and Brazil are a vast new market, youth in the developed world are also looking to develop skills that will help them compete in the global economy. The growing revenue potential of this new market could very well end up compensating for (or even surpassing) that of the traditional “oncampus” customer base. • Enable teacher and student success: Leading colleges and universities can identify key areas of learning, use their best professors to create online lectures and use them as part of online learning programs, hence taking the expertise of their best teaching minds to a vastly greater The old mindset of audience. The old mindset learning scarcity — of learning scarcity — limiting the audience limiting the audience for their best professors for their best and classrooms — must professors and give way to a more open approach of taking the classrooms — must best teachers to students give way to a more across the globe, using open approach of technology as a tool. As a result of the aforementioned business and technology megatrends, the components of the higher education business model — tuition and net revenue models, marketing, enrollment strategy and content distribution — will evolve drastically. Not only are core business processes being altered by technological advances, but the ways in which individuals use technology to learn are shifting as well. Effective sharing, collaboration, virtualization and innovation are emerging as essential ingredients of the physical or virtual classroom (see Figure 2, previous page). The Playbook for Transformation Based on our deep understanding of the higher education marketplace and our work with several industry-leading organizations, we believe that the following elements should form the crux of any transformational strategy for higher education institutions. • Build scale on the cloud: Building scale has been a traditional challenge for institutions of higher learning, be it creating the physical infrastructure for accommodating more students, or the technical infrastructure for managing learning platforms and administrative activities. By hosting learning programs and solutions on the cloud, the problem of building scale can be managed and resolved effectively. Cloud-based national or global content delivery platforms can offer economies of scale, reduce operational overheads and offload work that adds little or no value. In this way, the organization can focus on its core objective of providing better learning outcomes to students. • Rethink your positioning: Today’s customers expect continuous engagement, with the most up-to-date information in their areas of learning across a variety of digital platforms. As customer expectations and technology paradigms change, organizations operating in the higher education industry need to evaluate if they should think of themselves as media and information services players as well. Many of the business and technology imperatives for media and information services organizations, such as data as a service (DaaS), freemium payments,10 smart content,11 big data and analytics, and rich media12 are increasingly applicable to the higher education segment. • Convert learning data into insights and foresights: Online learning platforms provide an unprecedented opportunity to capture information about the learning preferences and patterns, areas of expertise and core skill sets of students. This rich information can be used to fine-tune and customize the learning process for each student, either through automated learning algorithms or teacher intervention. This information can also be used • Make the world your campus: Aided by technology, institutions of higher education now have the opportunity to take their courses to an exponentially greater number of customers across the globe, who they would never be able to reach otherwise. While cognizant 20-20 insights taking the best teachers to students across the globe, using technology as a tool. 5
  • 6. to cross-sell more products and services. On the other end of the spectrum, insights into the unique skills of their customers could prove to be invaluable to potential recruiters. Analytics can open a host of hitherto unknown possibilities of monetization. • Explore affiliated services: In order to main- tain a persistent connection with customers beyond their core learning outcomes, higher education players should explore the associated services they can offer. Options such as curriculum design, placement and career services, corporate training services, enrollment and admissions services can be explored. • Leverage cost benefits in operations: While colleges and universities might regard the reduction in enrollment of their full-time on-campus courses as a hit on their revenue, the resulting reduction in infrastructure costs like real estate, power, staff salaries and physical security can ease the pain of decreased government funding to some extent. Universities and colleges should look to run a tighter ship by shaving administrative costs, eliminating high-cost, low-demand programs, reconsidering course durations and credit requirements, and reducing energy consumption, for example. Online courses do not have the same overhead costs as classroom programs. Partnering with online education service providers and MOOCs can help further lower the cost of online course development.13 • Train teachers and plan for change: The use of technology can be overwhelming for many teachers, including the best and most loved by students. Institutions, as well as others in the educational ecosystem, must carefully develop the benefits they want to target and tailor appropriate roles for technology. With a plethora of technology options available to teachers, selecting the right tools can be the difference between a successful — or unsuccessful — online program. In today’s digital ecosystem, the packaging and mode of delivery of content is as critical to success as the content itself. Institutions of higher learning should carefully evaluate the technology enablers that are best suited for their subject area, student preferences and teacher competencies. Simply “throwing” technology at this challenge can actually create worse outcomes for students, teachers, institutions — and budgets. cognizant 20-20 insights A Business Transformation Framework To formulate the right strategy for a transformative effort within a rapidly changing environment, it is crucial that a robust and welldefined framework is in place. Such a framework must evaluate an organization across internal and external variables, along a holistic set of parameters. Our Cognizant Value Discovery Assessment (CVDA)14 is a proprietary tool and framework that informs, transforms and communicates an organization’s strategy. The CVDA’s value is in its ability to deliver a relative diagnosis of the current and planned strategies, and prioritize the areas of change and focus that the organization should pursue. CVDA evaluates the current and future enterprise transformation strategies against the top four levers that deliver value in higher education: • Efficiency: Optimizing the cost structure of the institution, streamlining processes, reducing waste and understanding what programs produce the most value. • Effectiveness: Improving productivity and operational performance in areas such as quality control, student satisfaction and quicker response to market changes (program development to meet student needs and interests). • Virtualization: Sharing learning processes, knowledge and technology both within and outside the institution in a collaborative and flexible manner. • Innovation: Fostering the capacity to create new programs and student services that will result in new revenue streams. In the information, media and entertainment space, we have used the CVDA framework (see Figure 3, next page) to define long-term business transformation strategies for a global publisher of higher education content and a leading U.S. performing rights organization. We charted variables such as the strength of the organization’s core business, customer focus, revenue diversification, digital strategy, data and analytics, technology footprint, management of costs, strategic partnerships and globalization initiatives across the four CVDA dimensions. A mapping of the CVDA “diamond” for the client organization against CVDA diamonds of competitors and industry (created through in-depth primary and secondary research) reflected the 6
  • 7. areas of focus that should define their business strategies, and the consequent future state of their systems and processes. Based on our experience, we believe that this framework can be used as effective tool for defining the transformation roadmap for players in the higher education sector. an institution may have to migrate course curriculum for online delivery. • Accelerate time to market: Many institutions are steeped in history, and have traditionally been slow to adapt to changing market dynamics. In today’s environment, business model lifecycles can be short. To contend with change, these organizations must find ways to quickly embrace newer business and operating models, and offer new services with greater revenue potential. Delays in initiating or implementing new initiatives can cause an organization to miss the next big wave. Critical Success Factors The success or failure of any business transformation effort largely depends on a few key variables. We believe that players in the higher education market need to keep the following factors in mind during their transformation journey. • Agility and Flexibility: With the technology landscape changing at the speed of thought, organizations must be flexible in their approaches to meeting customer needs. To support business transformation, an organization may need to nurture a set of capabilities it does not currently possess. For example, a higher education institution may need to transfer student experiences, learning workflows and engagement to mobile platforms. In order to provide the flexible schedules that the modern learner needs, • Improve customer connections: If an organi- zation does not know what its customers are thinking on a real-time basis, it will gradually lose the ability to invest and monetize relevant content and opportunities. Tools that mine conversations on popular social media platforms and analyze user sentiment can be used to feel the pulse of the customer. This is especially relevant in higher education, since the overwhelming majority of customers come from the age group that is most active on social media. Cognizant Value Discovery Assessment Framework • Improved capital productivity/utilization. • Developing offerings through strategic Virtualization partnerships and joint ventures. • Cloud offerings. Effectiveness Innovation • Productivity/quality • Innovation. • Revenue enhancements. • New business models improvement. • Enhancement/expansion of existing capabilities and business models. and capabilities. Efficiency • Cost reduction and control. • Lowering effort while improving output. Figure 3 cognizant 20-20 insights 7
  • 8. • Partnerships: As technology shifts force higher education players to enter uncharted waters, the importance of key partnerships in areas such such as IT infrastructure, MOOCs, learning management systems, semantic search and content enrichment is increasing. Partners can feed off one another’s expertise and take more compelling learning solutions and services to customers. Looking Ahead Higher education institutions will continue to face major challenges from new competitors, changing customer behavior and an unfavorable regulatory environment. A prospective learner’s ecosystem will also continue to change, as will their expectations for appropriate and effective learning services. The variable that can and should be managed is how quickly your institution can adapt to meet the market’s needs. Footnotes 1 Surging college costs price out middle class. http://money.cnn.com/2011/06/13/news/economy/college_ tuition_middle_class/index.htm. 2 CNN. State Budget Deficits. April 11, 2013. http://www.cnn.com/interactive/2011/02/politics/table.state. budgets/ (accessed April 11, 2013. 3 Rainie, Lee. “Smartphone Ownership Update: September 2012.” Pew Internet & American Life Project. September 11, 2012. http://pewinternet.org/Reports/2012/Smartphone-Update-Sept-2012/Findings.aspx (accessed March 26, 2013). 4 Farago, Peter. “The Flurry Blog.” August 27, 2012. http://blog.flurry.com/bid/88867/iOS-and-AndroidAdoption-Explodes-Internationally (accessed March 27, 2013). 5 Lytle, Ryan. “5 Apps College Students Should Use This School Year.” September 21, 2012. http://www.usnews.com/education/best-colleges/articles/2012/09/21/5-apps-college-students-shoulduse-this-school-year (accessed March 26, 2013). 6 Book Industry Standard Group (BISG) press release. January 25, 2013. http://www.bisg.org/news-5-815-press-releasestudent-response-to-digital-textbooks-climbs-says-newbisg-study.php (accessed March 26, 2013). 7 Nora Ganim Barnes and Ava M. Lescault. Social Media Adoption Soars as Higher-Ed Experiments and Reevaluates Its Use of New Communications Tools. 2010. http://www.umassd.edu/cmr/studiesandresearch/socialmediaadoptionsoars/ (accessed March 26, 2013). 8 Big Data is the term for a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications. http://en.wikipedia.org/wiki/Big_data. 9 Data as a Service is based on the concept that the product, data in this case, can be provided on demand to the user regardless of geographic or organizational separation of provider and consumer. http://en.wikipedia.org/wiki/Data_as_a_service. 10 Freemium is a business model by which a proprietary product or service is provided free of charge, but money (premium) is charged for advanced features, functionality, or virtual goods. http://en.wikipedia. org/wiki/Freemium. 11 Smart Content is information, typically originating in unstructured formats, that is findable, reusable, more profitable (however measured) for the producer, and more useful for the consumer. Six Definitions of Smart Content http://www.informationweek.com/software/business-intelligence/six-definitions-ofsmart-content/228901459. 12 Rich media refers to products and services on digital computer-based systems which respond to the user’s actions by presenting content such as text, graphics, animation, video, audio, games, etc. http://en.wikipedia.org/wiki/Interactive_media. 13 How Online Education Saves Everyone Money. http://www.nationaljournal.com/next-economy/solutionsbank/how-online-education-saves-everyone-money-20130425. 14 A New Value Creation Model. http://www.cognizant.com/InsightsWhitepapers/A-New-Value-CreationModel.pdf. cognizant 20-20 insights 8
  • 9. About the Authors PK Prasanna is an Assistant Vice President in Cognizant Business Consulting’s Information Media & Entertainment Practice. A a transformational business leader, his expertise in digital technology strategy, innovative product development and market insight have built new revenue streams and market advantage in consulting and industry. Additional areas of expertise include digital media, cloud computing, mobility and data analytics with complement of Wharton MBA. PK can be reached at PK.Prasanna@cognizant.com. Shubham Choudhury is a Senior Consultant in Cognizant Business Consulting’s Information Media & Entertainment Practice. He has eight-plus years of business consulting experience across education, information, publishing, advertising, market research and entertainment industries in multiple geographies. His areas of expertise include solution envisioning, portfolio analysis, process consulting and business development. A certified scrum master (CSM), he also holds an MBA from NITIE, Mumbai, India, and bachelor of engineering degree in computer sciences from BIT, Durg, India. Shubham can be reached at Shubham.Choudhury@cognizant.com. Acknowledgment The authors would like to recognize the contributions of Philip Guth, a higher education industry expert, to the white paper. About Cognizant Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide and approximately 164,300 employees as of June 30, 2013, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. Teaneck, NJ 07666 USA Phone: +1 201 801 0233 Fax: +1 201 801 0243 Toll Free: +1 888 937 3277 Email: inquiry@cognizant.com 1 Kingdom Street Paddington Central London W2 6BD Phone: +44 (0) 20 7297 7600 Fax: +44 (0) 20 7121 0102 Email: infouk@cognizant.com #5/535, Old Mahabalipuram Road Okkiyam Pettai, Thoraipakkam Chennai, 600 096 India Phone: +91 (0) 44 4209 6000 Fax: +91 (0) 44 4209 6060 Email: inquiryindia@cognizant.com © ­­ Copyright 2013, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.