Institutional Intelligence

Applying business intelligence principles to higher education

Higher education, generally among the leaders in technology adoption, is late to embrace data warehousing and business intelligence (BI). Fewer than 100 universities, colleges, and community colleges in the United States have recognized data warehousing programs. This represents an adoption rate of less than 3 percent for a discipline well into its second decade of mainstream practice.

Does BI not work for higher education? Or does it simply not apply? The answer to each of these questions must be a resounding "No!" The principles of BI do apply, and the capabilities of BI are critical to institutional success. The importance and the value of data warehousing and BI are recognized by leading institutions such as the University of Illinois, Northwestern University, Rensselaer Polytechnic Institute, University of Texas at Austin, and California State University.

The Need for Institutional Intelligence

The need for data integration, institutional metrics, and higher education analytics is apparent and unarguable. Debra Friedman, dean of the College of Public Programs at Arizona State University, describes the need for institutional intelligence as "the capacity of an institution to carry out analyses on questions of strategic import under continuously changing conditions." BI principles apply throughout the strategy, planning, management, and operation of a college or university. Every institution must address all of the typical business management disciplines: financial management, operations management, human resources, and the like. But institutions of higher education are more complex than most businesses. While encompassing all of the traditional aspects of business, they must also measure and manage uniquely academic issues and processes such as admissions, financial aid, academic advising. Many colleges and universities oversee resources and activities similar to those of a municipal government, with campus police, fire and safety, traffic management, parking services, etc. Add to this the similarities with the hospitality industry--residence halls, dining services, meeting facilities, etc.--and the complexity is magnified.

Also consider the dimension of regulatory compliance. Environmental, privacy and security, workforce regulations, accessibility, diversity, collective bargaining agreements, grants and contracts, and more make up the landscape of institutional compliance considerations. Although the Sarbanes-Oxley Act of 2002 (SOX) does not apply to higher education and other public or not-for-profit entities, the National Association of College and University Business Officers (NACUBO) has issued guidelines related to the issues raised by SOX. Though not directly impacted by Sarbanes-Oxley, institutions must still attend to issues such as auditor independence, corporate responsibility, enhanced financial disclosures, accountability, and certification of financial results.

Beyond these general needs that apply to virtually every institution are issues and needs unique to various kinds of institutions. R1 universities have specific demands and requirements. Those with medical schools have special demands in compliance and many other areas. State regulated institutions, land grant schools, community colleges, parochial schools, and multi-campus schools all have divergent needs.

The Challenge of Institutional Intelligence

Why, then, the low rate of adoption? With the need so great, what is it that prevents most colleges and universities from embracing the concepts of business intelligence and implementing institutional intelligence programs? Scope and complexity are certainly barriers to entry. To simultaneously address needs of academics, administration, municipality, hospitality, compliance, etc. seems an overwhelming effort. Yet institutions know well the disciplines of incremental implementation--the practice of starting small and growing systematically.

Beyond scope and complexity lie challenges that are unique effects of the institutional culture and environment in which BI principles must be adopted and adapted to become institutional intelligence. Four key areas where institutional intelligence is distinguished from business intelligence are:

•    Variable metrics and measures. A typical business has relatively stable key performance indicators and essential business metrics. A higher education institution experiences virtually unlimited variation in metrics of success.

•    Volatile goals and strategies. Business cultures routinely have continuity and clarity of goals and strategies that are achieved through directed agenda setting for the business. An institutional culture typically works with distributed agenda setting, resulting in multiple, overlapping, and constantly evolving goals and strategies.

•    Shifting subjects of information. Where a typical business has relatively stable customers and markets, students, faculty, and academic environments change continuously.

•    Unpredictable information consumers. A mature BI program is able to optimize for known communities of interest with relatively predictable information and problem-solving needs. Higher education communities are diverse and volatile with ever-changing questions and problem-solving needs.

These are certainly not the only challenges an institutional intelligence program will face. There are sure to be more in many domains: economic, cultural, political, and technological. Yet this represents a road already traveled--issues faced by every business that has implemented a BI program. The problems are known and the solutions are found in BI best practices.

Adopting Institutional Intelligence

Building an institutional intelligence program is an undertaking of real magnitude. It is a journey (not an event) that demands vision, commitment, and tenacity. A successful program is both mission-aligned and culturally aligned. For higher education institutions, mission-aligned means connected with and supporting the education, research, and service objectives of the institution. Thus the dashboards, scorecards, metrics, measures, and data have distinctly different focuses than those of a typical business intelligence program. Cultural alignment has both organizational and terminology implications. Program sponsorship, program management, and decision-making processes will all need to be adapted--to discover and develop best practices for institutional intelligence. The language used to describe an institutional intelligence program must also be adapted. While institutions have revenue and expense, profit and loss, they are less significant than in for-profit business culture. They are not the driving forces in which meaningful measures of mission achievement are found.

Institutional intelligence is on the horizon. Getting started requires substantial knowledge of business intelligence principles, combined with innovation that adapts them for institutional needs and challenges. To know and understand BI principles, study that which has been done by the most successful businesses. To adapt for higher education, become part of the small but growing community that is collaborating to discover and define institutional best practices.

The need is great, the challenges conquerable, and the rewards immense. Institutional intelligence is part of the future of higher education. Intelligence will pay off on many fronts: to recruit and retain the very best students, to recruit and retain top-quality faculty, to stand out in the crowded field of commodity education, to lead prestigious research projects, to deliver high-impact research results, to contain tuition costs, to maximize the value of the college experience, to avoid the risks inherent in regulatory compliance, and to advance the reputation and public perception of the institution. Institutional intelligence is undeniably challenging. Those who step up to the challenges will be well-positioned as tomorrow’s leaders in higher education.

[Editor's note: Dave Wells is the director of education for The Data Warehousing Institute's (TDWI) Spring 2007 World Conference, May 13-18, in Boston, MA.]
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