Canadian higher education sector faces critical technolo
Canadian higher education sector faces critical challenges, as
institutions around the world head into debt for first time; Deloitte
unveils top 10 most pressing issues facing post-secondary educational
institutions TORONTO, April 19, 2011 - Spending on Canadian higher education is
coming under increasing pressure. As nations around the world work to
recover from the global financial crisis, they are tightening their
budgets, leaving fewer funds available to the educational sector. As
well, market weakness has reduced the value of many of the endowments
educational institutions rely on and private donations have declined.
Yet at the same time, the costs of doing business are on the rise.
According to a new report by Deloitte, as financial conditions
deteriorate, Canadian tertiary institutions can no longer maintain the
status quo, but must radically transform the way they do business in
order to survive economic hardships and meet the educational needs of
the future. "As funding dries up, some universities are heading into debt for the
first time," says Louise Upton, Canadian Higher Education Leader,
Deloitte Canada. "This is constraining dollars for classroom delivery
and research, creating tension among different departments for scarce
financial resources." According to the report, Making the Grade: A study of the top 10
issues facing higher education institutions, Canadian colleges and
universities, along with their international counterparts, are facing
competitive pressures as they confront shrinking resources and
increased business demands. For starters, deferred maintenance is
catching up with campuses with aging infrastructure badly in need of
upgrades. The costs of attracting and retaining high-calibre faculty
are on the rise as staff retire in increasing numbers. Furthermore,
colleges and universities are under ever more scrutiny and compelled
to invest in systems that provide the highest levels of transparency
and accountability. "The business landscape has changed and Canadian educational
institutions are now finding that they must meet a host of costly
demands just to stay competitive," says Upton. "In addition to
developing and maintaining state-of-the-art campuses, competing
internationally to attract top students and professors, and meeting
new transparency requirements, the new generation of students now
expects user-friendly, self-service administrative options as well as
access to the latest technologies." "However, these unprecedented and combined challenges create a unique
opportunity for transformation. Educational institutions willing to
think laterally can position themselves to outperform into the
future," Upton explains further. "To succeed, Canadian higher
education institutions must take a good, hard look at their organizing
principles. Ultimately, the most successful players will be those who
remain open to fundamental changes in management practices and support
their decision-making with a sound, forward-looking business case." The top 10 issues Canadian higher education institutions will face in
the coming year To help higher education institutions take a forward-looking approach
to their strategic planning in the face of these new challenges,
Deloitte Canada, in consultation with Deloitte education practitioners
from around the world, has identified the top 10 issues that will
prove the most pressing in the coming year: 1. Over budget and under-funded: As funding declines, cost
management is key - When the global financial crisis hit, the
education sector was disproportionately affected. Private schools, as
well as public institutions that rely on private investment, saw the
value of their endowment funds fall as declining markets took their
toll. This affected many private donors as well, who lost either the
ability or will to invest significant sums within the industry. At the
same time, regulations limiting tuition fee increases are making it
harder for many institutions to establish their own pricing and
restricting them from delivering on their mandates. Most notably,
however, government budget challenges are leading to reductions in
higher education spending around the world. In Canada in particular,
the proportion of federal funding to the sector fell from 80% of
universities´ operating revenues in 1990-91 to 57% in 2007-08. Beyond
simply cutting budget allocations, governments are also taking a more
hands-on approach in the funding approval process. Rather than
providing funding upon student enrolment, governments like Canada´s
are examining linking funding to the number of students retained to
graduation. Therefore, as operating margins shrink, higher education
institutions must find new ways to cut costs without sacrificing
services. 2. The rivalry intensifies: Competition to attract the best
students heats up - Top-tier institutions rarely have difficulty
attracting students, but the same cannot be said of most second- and
third-tier schools. The economic climate is partly to blame, as
students shy away from higher-tuition private and market-funded
institutions. However, other factors are also at play. Demographic
trends in many developed nations have resulted in declining enrolment
in elementary schools, which will ultimately affect enrolment levels
at higher education institutions. International competition also plays
a role by siphoning off the best students of many countries. As the
rivalry intensifies, higher education institutions must find ways to
gain a competitive advantage by differentiating themselves in an
effort to attract top students as well as research dollars and top
faculty. "To avoid brand erosion, higher education institutions must
get very clear on their strengths and weaknesses," explains Upton.
"They need to assess if they play on a global, regional, national or
local stage. They need to decide if they plan to specialize in
specific degrees or student segments. Rather than offering a bit of
everything, organizations must identify the key areas of expertise
that can best support future growth." 3. Setting priorities: The danger of making decisions in the
dark - Educational institutions operate in environments that are
frequently not conducive to stark business approaches. In the area of
budgeting, decisions are often made democratically as opposed to
strategically. Extra money frequently goes to the stakeholders who
bring it in, rather than being deployed to the areas of greatest need.
Institutions are slow to phase out programs that no longer meet
evolving student needs or to introduce new programs that lack a proven
track record. As well, high degrees of organizational fragmentation
and decentralization also prevent various departments from working
together towards common goals or to realize improved operational
efficiencies. To succeed into the future, institutions must invest in
data mining, financial analysis and IT systems that can help them
identify optimal service delivery models and ensure they align to
student needs. As well, they must rationalize redundant programs,
evaluate the continued relevance of costly ones and ensure their
curricula keep pace with market changes. And they must look for ways
to enhance their core competencies and outsource the rest. 4. Moving at the speed of cyberspace: Technology upgrades are
needed across the board - While stakeholders across the campuses all
have different needs, they expect access to equivalent levels of
service. For faculty, this translates into a need to access critical
information seamlessly. For students, it manifests in the growing
expectation for integrated services, such as one-stop enrolment,
web-based interaction and the ability to access educational support
online. Although higher education institutions understand these
requirements, aging technology systems make it exceptionally difficult
to deliver on these promises. In many cases, back-office systems used
to manage student information, finances and HR are outdated, hampering
organizational ability to streamline the student enrolment process,
realize cost efficiencies or hire staff-and even schools that have
invested in new technology in recent years often are not leveraging
its full capacity. Moreover, schools that have not yet embraced online
forms of communication -including Facebook and Twitter -are losing a
critical opportunity to build student loyalty and cement long-term
relationships. Finally, in addition to system upgrades, higher
education institutions must also respond to the growing demand for
web-based training. Beyond lowering the costs of delivering education,
reducing infrastructure demands and offering programs to higher
volumes of students, this type of online education could have positive
implications for declining enrolment. 5. Rethinking infrastructure: A renewed focus on asset
optimization - When endowments seemed endless and financial security
assured, many institutions committed significant resources to
expanding their campuses. Yet much has changed since the economy
shifted. As the value of endowments declined, institutions were forced
to scale back on their capital expansion plans or halt them entirely.
Schools that already built new facilities are now struggling to pay
ongoing operating and maintenance costs. And even those that did not
build are grappling with the consequences of deferred maintenance,
particularly as their facilities, technology, equipment and campuses
continue to age. As Upton states, "In the wake of the global financial
crisis, higher education institutions must explore new ways to reduce
their infrastructure costs. This involves more than addressing their
deferred maintenance fees or converting properties to multiple uses.
It requires a wholesale assessment of how they can use their assets
more effectively." 6. Linking programs to outcomes: Where training and market
demand intersect - In countries around the world, there has long been
a distinction between university education and vocational training.
Yet, despite their reputational challenges, vocational schools may be
trumping universities in one of the most critical performance metrics:
post-graduate employment. This means higher education institutions
must take steps to design programs that align with marketplace demands
and employer needs. It also means they must engage in more focused
research and analysis in an effort to correlate their educational
offerings with their students´ ability to secure gainful employment.
As students and parents increasingly come to assess degrees based on
the economic value they confer, institutions will need a way to
demonstrate the practical outcomes of the programs they offer. 7. The best and the brightest: Attracting and retaining talented
faculty - Despite the critical role of faculty, many higher education
institutions lack a solid strategy for attracting and retaining
talent, measuring performance and enhancing teaching quality. Given
these trends, higher education institutions may find themselves facing
a critical talent gap in the near future, and must develop focused
talent management strategies designed to help them become employers of
choice within the sector at large. 8. A sustainable future: Enhancing environmental performance -
Public scrutiny, media attention, regulatory mandates and ongoing
student demands continue to exert pressure on organizations to improve
their environmental performance. This is starkly highlighted by the
release of the annual College Sustainability Report Card, published by
the Sustainable Endowments Institute. After assessing 322 U.S. and
Canadian universities and colleges, the Report Card "grades" each
school´s sustainability practices. The comprehensive report reviews
performance across 52 indicators in nine categories: Across
organizational lines. Institutions that earn top marks must generally
do more than reduce their carbon emissions and improve energy
efficiency. They also need to examine a range of non-traditional
practices, such as managing a campus garden or farm, introducing
trayless dining, composting organic waste, incenting students to
reduce water and electricity use, introducing bicycle-sharing programs
and constructing green buildings. 9. Education for all: Tackling diversity, accessibility and
affordability - While very few issues cross social, cultural and
geographic lines, access to education is one of them. In countries
around the world, governments and citizens grapple with the challenge
of educating hard-to-reach students, particularly those who struggle
with income disparity, have an illness or disability, live in remote
communities or are members of disenfranchised ethnic groups. For
instance, the Association of Universities and Colleges of Canada views
increased Aboriginal access, participation and success in higher
education as a national priority. However, in most cases, universities
and colleges are not equipped to resolve these issues on their own and
government assistance and regulation tend to go a long way towards
making education more accessible. While simple solutions may not
exist, access to education remains a critical issue that should impel
institutions to design programs that best meet their unique
constituencies. 10. Regulations and reporting: New responsibilities require better
disclosure - In the wake of the international market meltdown,
governments around the world have been stepping up industry oversight
by flexing their regulatory muscles. In light of these new
responsibilities, many institutions find themselves struggling to
comply with an increasingly complex disclosure environment. However,
to meet growing expectations in this area, institutions will need to
do more than simply comply with the letter of the law. If they hope to
differentiate themselves in an increasingly crowded marketplace, they
will need to invest in more sophisticated information systems that
allow them to track and report their performance across the criteria
of greatest interest to each of their stakeholders. Obtain a copy of the report For a more detailed discussion of the issues facing higher education
institutions in the coming year and potential response strategies, the
full report is available at www.deloitte.com/ca/higher-education. About Deloitte Deloitte, one of Canada's leading professional services firms,
provides audit, tax, consulting, and financial advisory services
through more than 7,600 people in 57 offices. Deloitte operates in
Québec as Samson Bélair/Deloitte & Touche s.e.n.c.r.l. Deloitte &
Touche LLP, an Ontario Limited Liability Partnership, is the Canadian
member firm of Deloitte Touche Tohmatsu Limited. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a
UK private company limited by guarantee, and its network of member
firms, each of which is a legally separate and independent entity.
Please see www.deloitte.com/about for a detailed description of the
legal structure of Deloitte Touche Tohmatsu Limited and its member
firms. - 30 -
------- End of forwarded message -------
Thank you,
Dave
institutions around the world head into debt for first time; Deloitte
unveils top 10 most pressing issues facing post-secondary educational
institutions TORONTO, April 19, 2011 - Spending on Canadian higher education is
coming under increasing pressure. As nations around the world work to
recover from the global financial crisis, they are tightening their
budgets, leaving fewer funds available to the educational sector. As
well, market weakness has reduced the value of many of the endowments
educational institutions rely on and private donations have declined.
Yet at the same time, the costs of doing business are on the rise.
According to a new report by Deloitte, as financial conditions
deteriorate, Canadian tertiary institutions can no longer maintain the
status quo, but must radically transform the way they do business in
order to survive economic hardships and meet the educational needs of
the future. "As funding dries up, some universities are heading into debt for the
first time," says Louise Upton, Canadian Higher Education Leader,
Deloitte Canada. "This is constraining dollars for classroom delivery
and research, creating tension among different departments for scarce
financial resources." According to the report, Making the Grade: A study of the top 10
issues facing higher education institutions, Canadian colleges and
universities, along with their international counterparts, are facing
competitive pressures as they confront shrinking resources and
increased business demands. For starters, deferred maintenance is
catching up with campuses with aging infrastructure badly in need of
upgrades. The costs of attracting and retaining high-calibre faculty
are on the rise as staff retire in increasing numbers. Furthermore,
colleges and universities are under ever more scrutiny and compelled
to invest in systems that provide the highest levels of transparency
and accountability. "The business landscape has changed and Canadian educational
institutions are now finding that they must meet a host of costly
demands just to stay competitive," says Upton. "In addition to
developing and maintaining state-of-the-art campuses, competing
internationally to attract top students and professors, and meeting
new transparency requirements, the new generation of students now
expects user-friendly, self-service administrative options as well as
access to the latest technologies." "However, these unprecedented and combined challenges create a unique
opportunity for transformation. Educational institutions willing to
think laterally can position themselves to outperform into the
future," Upton explains further. "To succeed, Canadian higher
education institutions must take a good, hard look at their organizing
principles. Ultimately, the most successful players will be those who
remain open to fundamental changes in management practices and support
their decision-making with a sound, forward-looking business case." The top 10 issues Canadian higher education institutions will face in
the coming year To help higher education institutions take a forward-looking approach
to their strategic planning in the face of these new challenges,
Deloitte Canada, in consultation with Deloitte education practitioners
from around the world, has identified the top 10 issues that will
prove the most pressing in the coming year: 1. Over budget and under-funded: As funding declines, cost
management is key - When the global financial crisis hit, the
education sector was disproportionately affected. Private schools, as
well as public institutions that rely on private investment, saw the
value of their endowment funds fall as declining markets took their
toll. This affected many private donors as well, who lost either the
ability or will to invest significant sums within the industry. At the
same time, regulations limiting tuition fee increases are making it
harder for many institutions to establish their own pricing and
restricting them from delivering on their mandates. Most notably,
however, government budget challenges are leading to reductions in
higher education spending around the world. In Canada in particular,
the proportion of federal funding to the sector fell from 80% of
universities´ operating revenues in 1990-91 to 57% in 2007-08. Beyond
simply cutting budget allocations, governments are also taking a more
hands-on approach in the funding approval process. Rather than
providing funding upon student enrolment, governments like Canada´s
are examining linking funding to the number of students retained to
graduation. Therefore, as operating margins shrink, higher education
institutions must find new ways to cut costs without sacrificing
services. 2. The rivalry intensifies: Competition to attract the best
students heats up - Top-tier institutions rarely have difficulty
attracting students, but the same cannot be said of most second- and
third-tier schools. The economic climate is partly to blame, as
students shy away from higher-tuition private and market-funded
institutions. However, other factors are also at play. Demographic
trends in many developed nations have resulted in declining enrolment
in elementary schools, which will ultimately affect enrolment levels
at higher education institutions. International competition also plays
a role by siphoning off the best students of many countries. As the
rivalry intensifies, higher education institutions must find ways to
gain a competitive advantage by differentiating themselves in an
effort to attract top students as well as research dollars and top
faculty. "To avoid brand erosion, higher education institutions must
get very clear on their strengths and weaknesses," explains Upton.
"They need to assess if they play on a global, regional, national or
local stage. They need to decide if they plan to specialize in
specific degrees or student segments. Rather than offering a bit of
everything, organizations must identify the key areas of expertise
that can best support future growth." 3. Setting priorities: The danger of making decisions in the
dark - Educational institutions operate in environments that are
frequently not conducive to stark business approaches. In the area of
budgeting, decisions are often made democratically as opposed to
strategically. Extra money frequently goes to the stakeholders who
bring it in, rather than being deployed to the areas of greatest need.
Institutions are slow to phase out programs that no longer meet
evolving student needs or to introduce new programs that lack a proven
track record. As well, high degrees of organizational fragmentation
and decentralization also prevent various departments from working
together towards common goals or to realize improved operational
efficiencies. To succeed into the future, institutions must invest in
data mining, financial analysis and IT systems that can help them
identify optimal service delivery models and ensure they align to
student needs. As well, they must rationalize redundant programs,
evaluate the continued relevance of costly ones and ensure their
curricula keep pace with market changes. And they must look for ways
to enhance their core competencies and outsource the rest. 4. Moving at the speed of cyberspace: Technology upgrades are
needed across the board - While stakeholders across the campuses all
have different needs, they expect access to equivalent levels of
service. For faculty, this translates into a need to access critical
information seamlessly. For students, it manifests in the growing
expectation for integrated services, such as one-stop enrolment,
web-based interaction and the ability to access educational support
online. Although higher education institutions understand these
requirements, aging technology systems make it exceptionally difficult
to deliver on these promises. In many cases, back-office systems used
to manage student information, finances and HR are outdated, hampering
organizational ability to streamline the student enrolment process,
realize cost efficiencies or hire staff-and even schools that have
invested in new technology in recent years often are not leveraging
its full capacity. Moreover, schools that have not yet embraced online
forms of communication -including Facebook and Twitter -are losing a
critical opportunity to build student loyalty and cement long-term
relationships. Finally, in addition to system upgrades, higher
education institutions must also respond to the growing demand for
web-based training. Beyond lowering the costs of delivering education,
reducing infrastructure demands and offering programs to higher
volumes of students, this type of online education could have positive
implications for declining enrolment. 5. Rethinking infrastructure: A renewed focus on asset
optimization - When endowments seemed endless and financial security
assured, many institutions committed significant resources to
expanding their campuses. Yet much has changed since the economy
shifted. As the value of endowments declined, institutions were forced
to scale back on their capital expansion plans or halt them entirely.
Schools that already built new facilities are now struggling to pay
ongoing operating and maintenance costs. And even those that did not
build are grappling with the consequences of deferred maintenance,
particularly as their facilities, technology, equipment and campuses
continue to age. As Upton states, "In the wake of the global financial
crisis, higher education institutions must explore new ways to reduce
their infrastructure costs. This involves more than addressing their
deferred maintenance fees or converting properties to multiple uses.
It requires a wholesale assessment of how they can use their assets
more effectively." 6. Linking programs to outcomes: Where training and market
demand intersect - In countries around the world, there has long been
a distinction between university education and vocational training.
Yet, despite their reputational challenges, vocational schools may be
trumping universities in one of the most critical performance metrics:
post-graduate employment. This means higher education institutions
must take steps to design programs that align with marketplace demands
and employer needs. It also means they must engage in more focused
research and analysis in an effort to correlate their educational
offerings with their students´ ability to secure gainful employment.
As students and parents increasingly come to assess degrees based on
the economic value they confer, institutions will need a way to
demonstrate the practical outcomes of the programs they offer. 7. The best and the brightest: Attracting and retaining talented
faculty - Despite the critical role of faculty, many higher education
institutions lack a solid strategy for attracting and retaining
talent, measuring performance and enhancing teaching quality. Given
these trends, higher education institutions may find themselves facing
a critical talent gap in the near future, and must develop focused
talent management strategies designed to help them become employers of
choice within the sector at large. 8. A sustainable future: Enhancing environmental performance -
Public scrutiny, media attention, regulatory mandates and ongoing
student demands continue to exert pressure on organizations to improve
their environmental performance. This is starkly highlighted by the
release of the annual College Sustainability Report Card, published by
the Sustainable Endowments Institute. After assessing 322 U.S. and
Canadian universities and colleges, the Report Card "grades" each
school´s sustainability practices. The comprehensive report reviews
performance across 52 indicators in nine categories: Across
organizational lines. Institutions that earn top marks must generally
do more than reduce their carbon emissions and improve energy
efficiency. They also need to examine a range of non-traditional
practices, such as managing a campus garden or farm, introducing
trayless dining, composting organic waste, incenting students to
reduce water and electricity use, introducing bicycle-sharing programs
and constructing green buildings. 9. Education for all: Tackling diversity, accessibility and
affordability - While very few issues cross social, cultural and
geographic lines, access to education is one of them. In countries
around the world, governments and citizens grapple with the challenge
of educating hard-to-reach students, particularly those who struggle
with income disparity, have an illness or disability, live in remote
communities or are members of disenfranchised ethnic groups. For
instance, the Association of Universities and Colleges of Canada views
increased Aboriginal access, participation and success in higher
education as a national priority. However, in most cases, universities
and colleges are not equipped to resolve these issues on their own and
government assistance and regulation tend to go a long way towards
making education more accessible. While simple solutions may not
exist, access to education remains a critical issue that should impel
institutions to design programs that best meet their unique
constituencies. 10. Regulations and reporting: New responsibilities require better
disclosure - In the wake of the international market meltdown,
governments around the world have been stepping up industry oversight
by flexing their regulatory muscles. In light of these new
responsibilities, many institutions find themselves struggling to
comply with an increasingly complex disclosure environment. However,
to meet growing expectations in this area, institutions will need to
do more than simply comply with the letter of the law. If they hope to
differentiate themselves in an increasingly crowded marketplace, they
will need to invest in more sophisticated information systems that
allow them to track and report their performance across the criteria
of greatest interest to each of their stakeholders. Obtain a copy of the report For a more detailed discussion of the issues facing higher education
institutions in the coming year and potential response strategies, the
full report is available at www.deloitte.com/ca/higher-education. About Deloitte Deloitte, one of Canada's leading professional services firms,
provides audit, tax, consulting, and financial advisory services
through more than 7,600 people in 57 offices. Deloitte operates in
Québec as Samson Bélair/Deloitte & Touche s.e.n.c.r.l. Deloitte &
Touche LLP, an Ontario Limited Liability Partnership, is the Canadian
member firm of Deloitte Touche Tohmatsu Limited. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a
UK private company limited by guarantee, and its network of member
firms, each of which is a legally separate and independent entity.
Please see www.deloitte.com/about for a detailed description of the
legal structure of Deloitte Touche Tohmatsu Limited and its member
firms. - 30 -
------- End of forwarded message -------
Thank you,
Dave
