Digital Economy Dispatch #110 -- Universities Offer a Lesson in Digital Transformation

Digital Economy Dispatch #110 — Universities Offer a Lesson in Digital Tranformation18th December 2022

I find walking across the campus of a university brings me such a special feeling. And it is something I have missed over the past few years. I changed roles to work at a university located a long way from home thinking that today’s digital connectivity would minimize the negative effects. As a result, and compounded by the massive impact of the pandemic, my trips to campus have been few and far between. As long as I can send email and jump on a Teams call, what does it matter that I very rarely visit colleagues in their offices, have informal discussion over lunch, walk between the buildings and see others busy with their tasks, or interact with students on a daily basis?

But I now wonder if I have this all wrong. I have been experiencing a growing sense of isolation and disconnection from the rest of the team. Something that I see surfacing in the way I now approach tasks, my attitude to work, and the strained online conversations that are becoming more frequent. Such feelings are widely reported and surveys estimate that as many as 7 out of 10 people are experiencing similar effects of isolation and disconnection.

Furthermore, an increasing focus on accelerating digital technology rollout at workplaces such as universities appears to be adding to the tensions. Expectations for the speed and impact of digital updates have been rising even as organizations have struggled to reset priorities and redefine working practices. In adapting and recovering from the pandemic we have all been hoping that we’d be relieved of many of the mundane, repetitive tasks through faster decision making and more efficient processes. Often the experience on the ground is otherwise. In practice, progress is often obscured by confused strategies, inconsistent priorities, shortages of resources, and skills gaps.

As I made a brief return to the university campus recently, I considered the implications of these effects. Is this another indicator of the failure of digital transformation in the workplace? What has been the focus for digital transformation in places like universities, and why has that not addressed these issues?

The Changing Context for Universities

In many ways, universities offer a useful and informative illustration of the complex state of digital transformation today. The challenges they face result from a move to new ways of working in a context in which the adoption of digital technology has revolutionized the environment in which they operate and reshaped the expectations of society about their role and value.

Much of the challenge in digital transformation is a consequence of its disruptive nature and the impact that this has on those it effects. No surprise then, that looking at the digital adoption journey at institutions such as universities can be both instructive and bewildering at the same time. On the positive side, a wide range of individual successes can readily be found in areas such as student administration, campus facilities management, class timetabling, recruitment, maintenance and operational planning, and so on. Areas where additional focus and investment brings quick wins through digitizing information sharing and speeding up access to shared data by opening up digital channels.

Yet, these steps forward are often surrounded with significant concerns about broader changes to ways of working. Engage in discussions on any new digital initiative on campus and you will immediately be faced with questions on the role of automation in teaching and learning, appropriate ways to align efficiency of delivery with quality, and disagreements about changing expectations on the impact of universities and the activities they perform. The path forward for digitally transforming universities can seem as uncertain today as it has ever been.

The University Challenge

These are complex and important debates taking place in many sectors being affected by digital transformation. They should not be ignored nor overly simplified. However, in institutions such as universities and other public bodies, I believe that there are 2 particular areas where it is important to focus additional attention to understand the current pace of digital transformation and how it can be accelerated. The first is clarifying the financial elements of the business model for universities. The second is aligning the conflict in perspectives on the role that universities play in today’s society.

Follow the money

Coming from a background of 25 years working in commercial companies, I was shocked to return to a university setting to find out how few people had knowledge or interest in the business model of the university. I would ask my new colleagues about the income and profit margins generated from courses they taught and receive blank stares. In being assigned to a team writing a bid for major research funding, my request to see the details of the bid budget and for a recent win/loss profile caused confusion and hostility. On persisting I received a firm rebuff: “That’s not how we do things round here!”.

Funding for universities, similar to other public bodies and institutions, is a complex affair. Yet, at its most fundamental, they are organizational structures in which the people working require a basic understanding of the business model being executed: Value propositions, money in, money out, cashflow, and costs for delivering of products and services. Without concern for this reality, debates about the impact of digital technology on performance, priorities for future digital strategies, and the effects of digital adoption in the workplace become disconnected from reality. This becomes, as it were, an academic discussion.

Such concerns were highlighted recently in the responses to UK government indications that it was about to limit foreign students coming to the UK to study. Immediately universities protested that this would make them insolvent. Yet, little data was offered to support this. Eventually, a variety of financial summaries were offered which caused significant discussion about how universities view their finances.

Based on TRAC data, they show that in 2020/21 UK universities had a deficit of almost £4B supporting their research, and a further £300M supporting home students. These are balanced by a surplus of over £2B each from overseas students and private donations. Yet even this basic information is disputed. In the twitter storm that followed, you get a sense of feelings surrounding this data and the emotion it generated from a variety of people in the university sector.

In my experience, internal discussions within universities often exhibit similar characteristics.  Discussions about the pace and priorities of digital transformation efforts lack a shared understanding on the key business model elements that form an important basis for decision making. While clearly not the only consideration, without more attention to these issues, debates about the right way forward too frequently remain unresolved and measurements of progress become difficult to pin down. Few people agree on the numbers. Many more simply don’t care.

We are who we are

This absence of context may also be derived from a much deeper challenge faced by public sector organizations such as universities. In another misplaced experiment a little while after returning to work in the university sector, I placed a large piece of paper on the noticeboard with the words: “A university’s primary role is to be a successful business producing educational products to compete in the Higher Education Sector”. The effect was dramatic. I received howls of protest and significant aggression from several colleagues. I was even accused of being “unsound” (the academic equivalent of a death threat!).

The vocal response to this statement stems from the complex role played by universities and other public institutions. This is evident in many areas in which it operates and is especially clear in discussions addressing digital strategy directions. At least three distinct perspectives emerge:

1. Universities are education and research product providers. For many in administrative and management roles, the key concern for running a university is to be able to operate as an effective business. This means that they view the priority for digital transformation to be delivering efficiency improvements, automating common processes, and differentiating products to be competitive in a crowded market.

2. Universities are knowledge service providers. Academics and researchers are driven by the importance of the insights they produce and their ability to communicate them to their colleagues, students, and other stakeholders. Digital transformation of universities must always be in support of these goals and requires careful consideration to ensure it does not impinge on these purposes.

3. Universities are hubs for innovation and impact. Increasingly, external funders such as governments and businesses emphasize the position and impact of universities in their local communities, and highlight their importance as drivers for change nationally and internationally. The role of digital transformation is often seen as an essential element in supporting local companies to adopt digital technologies for growth, creating new businesses as spin outs from the research being carried out, and establishing the UK as an attractive home for corporate investment, venture capital, and talented individuals from around the world.

Each of these perspectives is valuable. Yet, coordinating these disparate views presents a major challenge to universities. Inevitably, there are wide gaps at times between these ways to see the world. As a result, decision making on digital priorities is fraught with endless debates about how to balance concerns and make progress in such a complex environment. Consequently, to some observers progress moving forward on digital strategies can be painfully slow in comparison to other sectors and industries. Building consensus is important in these institutions and is essential for their success. Explicit, open discussion to align different needs is critical.

Into the Storm

Navigating your digital transformation journey inevitably involves balance and compromise across the needs of many different stakeholders. Nowhere is this more evident than in public institutions such as universities. They face important considerations as they deliver 3 different kinds of value to stakeholders: Product, Service, and Outcome. The digital transformation journeys taking place in universities are important illustrations of the opportunities and challenges faced by all organizations as they adopt digital ways of working.