The Learning Cloud

Academic process redesign and outsourcing

It's always nice to read about a friend and his interesting accomplishments.  I had just that pleasure yesterday when I picked up USA Today in an airport and read about Burck Smith and his company, SmarThinking, in the article linked here and excerpted below.

Overseas tutors help U.S. students online (USA Today, Aug. 29, 2005)

Overseas tutors are taking flight. Better technology, rising numbers of struggling schools and millions of dollars in new federal aid for tutoring are making "education process outsourcing" a reality. Several companies are considering "offshoring" their tutoring services to countries like India. Read more at http://www.usatoday.com/tech/news/techinnovations/2005-08-29-overseas-tutors_x.htm.

Alliance for Higher Education Competitiveness

The Alliance for Higher Education Competitiveness (A-HEC) is headed by Rob Abel, a friend and former associate of mine in what is now SunGard Collegis. Rob founded A-HEC a little over a year ago and has since organized and reported the results of a number of research projects designed to identify effective practices in online academic programming and related topics that recognize the key role of online learning in improving institutional performance. A-HEC has been quite successful in terms of its research agenda and in attracting corporate sponsors and higher ed subscribers/members. You'll find a number of useful interviews, articles, and research reports on the A-HEC site, along with occasional opportunities for colleges and universities to participate in research studies. You may also want to subscribe to A-HEC’s posting and news updates, if you find its focus of interest to you.  I should reveal that I'm one of the founding members of the A-HEC board.

National Center for Academic Transformation

My friend and colleague, Dr. Carol Twigg, is the founder and CEO of the National Center for Academic Transformation.  She and her colleagues at NCAT worked with 30 colleges and universities to pioneer what I refer to frequently in this blog as the "common course redesign strategy."  The NCAT site has a wealth of resources and ideas for those wishing to improve learning outcomes while simultaneously reducing direct instructional expenses where it counts most -- in high-enrollment courses that are common to most colleges and universities. You can also subscribe to an informative e-bulletin from NCAT.  I should disclose that I'm one of the founding members of the NCAT board.

Unit costs count!

If unit costs (per-student-FTE costs) matter in higher ed, then IT matters, because IT is the only tool available for systematically reducing unit costs – through increased IT-driven productivity. Unit costs are beginning to matter, as the linked article points out, because price (tuition) matters as an issue of public policy -- and to students and their families

See Kaitlin Bell (Boston Globe Correspondent), US bid to keep tabs on tuition irks colleges: Schools object to proposal to rank their cost increases, August 16, 2005

Catch 22: IP Pressure vs. Revenue / Cost Pressure

Leaders who would like to embrace and improve institutional performance often report being trapped in a "catch-22" situation. They are being asked by policy makers to improve the academic aspects of institutional performance, a task they believe will require additional expenditures and, therefore, additional revenues. Yet, the same policy makers are asking higher education leaders to hold the line on tuition increases, and are also reducing public funding for higher education relative to other tax-supported needs. Catch 22!! The catch-22 reaction is only heightened by a broader revenue/cost pressure that is being increased simultaneously with the pressure to improve institutional academic performance—the full squeeze of the opposing pressures of the catch-22 leadership vise. This aggregate revenue/cost pressure has multiple pressures points, a differentiating subset of which applies to any institution:

• Revenue pressures arising from an increasing flux in traditional revenue sources, such as the
  • declining percentages of state allocations to higher education relative to state allocations to other needs, such as health care, public schools, and incarceration
  • declining percentages of institutional revenues coming to institutions, directly or through their students, from state and federal subsidies and grant programs;
  • increasing tuition inelasticity resulting from competition from peer and for-profit institutions; and
  • increasing and, for many institutions, risky reliance on gifts, grants, and contracts (relative to public funding).

• Cost pressures, such as
  • funding more and larger need-based grants from internal non-public resources; and
  • escalating (competitive) tuition discounting for less needy, but highly qualified students.

The reason for introducing revenue/cost pressure is to assuage both the potential reaction that I'm unfamiliar with the apparent catch-22 nature of emerging policy expectations and, more importantly, the perception that public policy is being amended on an uninformed catch-22 basis to destroy an ideal, generation-spanning social compact between the public and higher education. The social compact of the last half century, after all, placed little to no emphasis on expense accountability. In contrast, today’s policy makers are aware of the role of technology-enabled innovation in reducing unit costs while increasing competitiveness throughout the services economy, and they are bringing that awareness as an expectation to the evolving social compact with higher education. It is technology—more accurately, technology-enabled competitive innovation as practiced throughout the economy—that takes the catch-22 out of the discussion of the evolving social compact and fairly places expense accountability and the affordability of access among the four other institutional performance obligations (described in an earlier posting) that are not directly financial in nature—each of which would nevertheless benefit from the wise use of technology.

Performance obligations & indicators

Institutional Performance Obligation	Attendant Performance Indicators
Learning accountability:  Account quantitatively for the quality of learning outcomes, where possible through comparative benchmarking across time of ·    retention, persistence, and graduation rates (expected versus actual rates) among comparable institutions, and ·    broadly accepted independent learning assessments in the large-enrollment courses commonly taught at almost all comparable institutions.	·    Participation in the Collegiate Learning Assessment, the National Survey of Student Engagement, or the Community College Survey of Student Engagement ·    Independent outcomes assessment of developmental courses, college-level basic skills courses—in math, Spanish, writing, etc.—and the five highest-enrollment introductory-level disciplinary & professional courses ·    Expected rate vs. actual rate for key indicators such as retention, persistence, and graduation
Program accountability:  Account for any mission obligations to respond rapidly to economic development priorities and workforce/professional education priorities by redesigning or developing academic programs to address these priorities.	·    Percentage of annual student FTE increase directly attributable to programs created or redesigned to meet identified economic development or workforce needs—for teachers, nurses, biotech workers, etc ·    Percentage of annual increase in non-credit enrollments directly attributable to programs created or redesigned to meet identified economic development or workforce needs—for teachers, nurses, biotech workers, etc. ·    Percentage of all degrees awarded that are directly attributable to programs created or redesigned to meet identified economic development or workforce needs—for teachers, nurses, biotech workers, etc.
Expense accountability:  Account for the direct expense of instruction and other key lines of service—IT services, registrarial services, financial services, and so on—using per-student FTE, per-enrollment, or other appropriate unit measures of direct expenses.	·    Per-enrollment direct instructional expenses and average ratio of enrollments to instructional personnel for development courses, college-level basic skills courses—in math, Spanish, writing, etc.—and the five highest-enrollment introductory disciplinary & professional courses ·    Per-student-FTE central IT expense and  IT personnel (full-time & part-time) expense ·    Similar unit expenses metrics in other lines of service ·    Percentage of change in the annual ratio of student FTEs to administrative FTEs
Affordability of access:  Maintain affordable access to academic programs (within mission responsibilities) by limiting the rate of any annual tuition and fee increases to the Consumer Price Index.	·    Ratio of the annual rate of change in undergraduate tuition/fees to the annual Consumer Price Index ·    Ratio of per-FTE revenues from tuition/fees and subsidies/grants to per FTE direct operational expenses
Convenience of access:  Provide flexible, integrated access to academic programs and comprehensive support services—flex programs and services—by combining online (asynchronous) self-service course and service options with as-wanted expert help via walk-in service centers and a 24x7x365 call center.	·    Percentage of all degree programs which can be delivered asynchronously except for required clinical or lab work ·    Percentage of all non-credit programs which can be delivered asynchronously except for required clinical or lab work ·    Annual inventory of services accessible asynchronously via a web portal
Capacity for access:  Adjust institutional capacity after projecting demand for access to pre-requisite and priority courses, academic programs, and other services that are critical to mission fulfillment.	·    Percentage of qualified applicants refused admission or admitted with delay ·    Annual percentage change in total credit hours and in total non-credit enrollments ·    Total first-term enrollments (credit & non-credit) ·    Ratio of total first-term credit hours to total first-term instructional personnel FTEs and of total first-term non-credit enrollments to total first-term instructional personnel FTEs ·    Ratio of total annual enrollments to total seating capacity of the classroom plant

Mine is not a lone voice!

Larry R. Faulkner, who has announced his intention to step down from the presidency of the University of Texas at Austin, is a leader who understands the institutional performance imperative. In February 2005, at the 87th Annual Meeting of the American Council on Education, Faulkner urged nonprofit colleges and universities to move from a defensive to a proactive position in responding to the rush of outcome-oriented institutional performance expectations coming from employers and the public and, even more urgently, from the federal, state, and institutional policymakers who govern, regulate, or help fund higher education and its students. He noted: "At the typical flagship public institution in America, the academic cost of attendance (mandatory tuition and fees) is now in the range of $5,000 to $7,500, or about 11 to 17 percent of median family income. Those figures are up from 1 to 5 percent in the 1960’s. If the trends of the past fifteen to twenty years continue, the share would rise to something like 30 percent of median family income by 2020." Connecting price to unit cost via this access-compromising trend, Faulkner added: "We must address costs. More specifically, we must mount serious, effective efforts to limit the rate of growth in the educational cost per student. It is in the range of 4.5 percent per year, a substantially inflationary figure, but more important, a figure significantly larger than the long-term growth rate of the economy." Faulkner recognizes that "serious initiative" will be required to reduce unit costs and stabilize prices (tuition) in the interest of access, accountability, and competitiveness.

Gone is the day when the sole indicator of institutional performance was a mission-reflecting combination of student aptitude, faculty credentials, library holdings, anecdotal evidence of an enriched socio-intellectual environment, modernized facilities for teaching and learning, and low student/faculty ratios. The new day requires strategies for identifying, prioritizing, and proactively meeting the critical performance expectations pressuring nonprofit higher education. Many institutions are now expected to be accountable for learning outcomes, existing programs versus needed programs, and per-student-FTE expenses while also providing affordable, convenient, and high-capacity access. These six expectations are arguably mission obligations—which, in some combination and through nuanced emphasis and applicability, can reflect differences in institutional context, mission, and governance. They are categorized and briefly explained in a previous post, Six Institutional Performance Obligations. They reflect policymakers’ convictions that nonprofit higher education is obliged to monitor, improve, and report performance on an ongoing basis as part of its evolving social compact with the public.

Example of Improving IP

From time to time, I'll post an example of improving institutional performance.  I'll typically describe a real example but in hypothetical terms -- in order to avoid any unintentional misrepresentation on my part or any accusations of misrepresentation by the "real" institution.  So ...

Consider a community college or public university that is having to cap enrollments in a significant number of required and other high-demand (high-enrollment) courses due to constraints on both physical classroom facilities and faculty teaching loads. Assume also that these courses have a high attrition rate which is contributing to retention issues. The problem has two performance components: capacity for access and learning accountability.  An innovative solution, however, can achieve performance improvements in all six of the performance categories above described in a previous post, Six institutional performance obligations. The common course redesign strategy and the flex program and service redesign strategy can be applied to the over-enrolled, high-demand courses in question to help simultaneously improve learning outcomes, reduce attrition, increase the student/faculty ratio, and reduce contact hours (more online or hybrid course delivery). Such a solution would then address each of the six performance obligation by improving learning accountability (improved learning, lower attrition, higher retention), program accountability (increased access to courses required by all or many programs), expense accountability (lower direct per-enrollment expenses through increased student/faculty ratio), affordability of access (tuition rate stabilized or reduced by the decreased expense of high-enrollment courses), convenience of access (the convenience and flexibility of online or hybrid courses), and the capacity for access (increased classroom capacity through online or hybrid courses and increased faculty capacity through increased student/faculty ratios).

"Flatten" your thinking!

Do yourself a favor by reading a recently published best selling book. In The Word Is Flat:  A Brief History of the Twenty-First Century (New York: Farrar, Straus, and Giroux, 2005), New York Times columnist Thomas Friedman describes ten flattening forces that have complementarily converged to create a "new global playing field for multiple forms of collaboration."  The ten IT-driven flattening forces are:

1. the fall of the Berlin Wall,
2. the Netscape IPO,
3. work flow software,
4. open sourcing,
5. outsourcing,
6. offshoring,
7. supply-chaining,
8. insourcing,
9. in-forming, and
10. the "steroids" of emerging "digital, mobile, personal, and virtual technologies." 

But even the complementary convergence of the ten IT-driven flatteners was not enough to bring what Friedman historically labels "Globalization 3.0" to the "tipping point" that is now enabling "breathtaking increases in global productivity."  Friedman proclaims:

Introducing technology alone is never enough.  The big spurts in productivity come when a new technology is combined with new ways of doing business.

The "new ways of doing business" in higher education are the IT-enabled common course redesign strategy and the flex program and service redesign strategy that I've frequently referenced in this blog and described in Improving Institutional Performance:  The necessary role of IT-enabled innovation.  Higher education with its highly vertical value chain would do well, in my opinion, to consider the advantages that Friedman attributes to outsourcing and insourcing, paying special attention to his example of why and how so many small-to-medium-size businesses are insourcing expertise from UPS to improve their performance and to focus on their core products or services.

IT-enabled innovations make IT more valuable, and new and better IT makes new innovations more possible.  But there is always a time lag between new technologies and the new innovations they enable.  The full impact of Globalization 3.0 depends over time on replacing traditional vertical command-and-control service and management models / processes with new one that are less about command and control and more about connecting and collaborating horizontally. So Globalization 3.0 is a work in progress hurtling us toward the "triple convergence" described by Friedman as follows:

It is this triple convergence—of new players, on a new playing field, developing new processes and habits for horizontal collaboration—that I believe is the most important force shaping global economics and politics in the early twenty-first century.  Giving so many people access to all these tools of collaboration, along with the ability through search engines and the Web to access billions of pages of raw information, ensures that the next generation of innovations will come from all over Planet Flat.  The scale of the global community that is soon going to be able to participate in all sorts of discovery and innovation is something the world has simply never seen before.

NCAHE: "How to improve performance is not so obvious." Say what?

The National Commission on Accountability in Higher Education (NCAHE) recently called attention to its final report, Accountability for Better Results:  A National Imperative for Higher Education, by proclaiming:  "Improved accountability for better results is imperative, but how to improve accountability in higher education is not so obvious."  Why did the NCAHE so carefully and persuasively argue the case for accountability as an imperative if it didn't intend to recommend and highlight proven strategies for improving accountability? 

In any case, I disagree with the NCAHE that how to improve accountability in higher education is not so obvious!  To improve accountability, higher education can use technology to redesign academic and administrative service processes for measurably improved effectiveness, flexibility, and efficiency.  The common course redesign strategy and the flex program and service redesign strategy are described and their performance-improvement effectiveness documented in Improving Institutional Performance:  The necessary role of IT-enabled innovation.

To put the issue in larger context, consider the role played by innovative, IT-enabled production and service process redesign in the recent and well documented increase in productivity in the national / global economy (Vikas Bajaj, Reprogrammed:  Blazing gain in productivity means some jobs are no longer needed, Dallas Morning News, Oct. 10, 2004, 1D).  The same strategy can be used in higher education to improve productivity -- another word for accountability and institutional performance. 

About the same time that the NCAHE issued its report in March of 2005, New York Times columnist Thomas L. Friedman published his latest book, The World Is Flat:  A Brief History of the Twenty-First Century (New York: Farrar, Straus, and Giroux, 2005).  Friedman makes abundantly clear the role of technology in the innovative collaboration and sourcing models that are changing the responsibilities of governments, commercial and noncommercial organizations, and the individuals who lead and who work for these governments and organizations.  Higher education needs to harness Friedman's "flattening" forces and the new "horizontal," collaborative value chains that are replacing traditional values chains -- none more traditional than the vertical value chain employed by higher education.