Interview

Higher Education IT in the 'New Normal'

CT asks Harvard Business School CIO Stephen Laster about the changing role of campus IT in today’s challenging economic times.

Campus Technology: We’ve heard about “the new normal” as an overall, potentially long-term trend toward frugality by consumers as a reaction to the economic downturn. But what does the “new normal” mean, in general, for higher education?

Stephen Laster: If we look at the new normal for higher education, and consider the state of where higher education costs and values have been trending, one could paint a pretty disturbing picture. That is, if you think of higher education as an industry--the sound of which makes many of us uncomfortable, but it is one--you see that the industry’s inflation rate continues to be at, give or take, 5 percent a year. That’s what costs and tuition in this business are going up by, yet most institutions, for their inflated tuition dollars are educating the same or a similar number of students as in previous academic years. Not unlike the healthcare debate, there is a real question: Is this higher education cost basis sustainable?

We’ve begun to see the answer emerging, in that for a lot of individual people it’s simply not sustainable. That’s why we’re experiencing an increased importance in the role of community colleges and of institutions that are less expensive for students to attend. And when you lay an economic downturn on top of all that, you begin to find higher education under tremendous pressure to deliver a quality education, plus the ability for academics to perform research, in a way that’s much more cost effective than the trend over the past decade would have us leading towards.

Even as the economy continues to recover, there will be pressure on higher education institutions to be more efficient with their financial and human resources. I don’t see that trend changing back or going away any time soon.

CT: What does all this mean specifically for IT departments in higher education? As the institution becomes generally more resource-strapped, is there an assumption in other departments that IT can somehow alleviate this?

SL: As the institution becomes more resource-strapped, there are two competing tensions for the IT department: IT departments at many of our institutions are among the larger consumers of resources on the administrative side of campus--so, there are tremendous pressures on them to cut costs. At the same time, people begin to look at IT to drive efficiencies, to save costs in other areas.

For example, as people give up travel because it’s expensive, you see a rise in demand for video conferencing. But we live in a time when not everyone is technologically fluent enough to do video conferencing on their own. So, the support services that the IT department offers in that scenario become even more tapped. On the one hand, IT is under pressure to cut its costs, and on the other hand, it is under pressure to deliver more services so that people can cut other costs. It’s a double-whammy of a hit, in the environment in which the IT department is operating.

CT: You mentioned video conferencing. Is IT in any sense “the answer” to providing educational services with less resources (doing more with less)? What are the areas where IT really does work to provide sustainable changes that help with tight budgets throughout the institution?

SL: IT can provide many answers. Number one is helping foster digital collaboration, without physically moving people. Number two, the IT department, if playing the appropriate role in the university--such as in partnership with the library--can really help the institution better organize and have access to its intellectual property. So it can help people when they’re designing and delivering education, or when they’re conducting research; it can bring to them services that will actually help make people more “time-effective.”

All this, then, begins to assume a better partnership with those people who are responsible for faculty and staff development; to ensure that the campus begins to invest in individuals, in their knowledge-worker skill set. We live in an age of endless technological possibilities for finding, managing, and collaborating around research. But those capabilities, and those services, generally will far outstrip many individuals’ capacities to make use of them. So there is a skills gap on today’s campus. And as we move IT up from being the provider of commodity services (or acting as the “plumber”), to a value-added partner at the strategy table, I think IT can help the institution resolve such inconsistencies and become more efficient and more effective.

CT: Given all that, is the perception of the IT department changing on campus?

SL: The perception of the IT department must change on campus, in order to justify having an IT department in the first place. And in fact, we see this happening: In those institutions where IT is playing a strategic role, the heads of those units are sitting at the strategy table--be it the provost’s table, the dean’s, the chief administrative officer’s, or be it the president’s table.

But still, at those other institutions, where IT is acting more as the keeper of the electronics, we’re seeing the IT department shift back under the financial managers--which is right back where IT came from at many campuses.

CT: Are you saying there could be a trend towards putting IT departments back to reporting up through finance?

SL: Yes, that’s one possibility of how things may play out. If you were to look back 20 years ago, many IT organizations reported up through finance. But for the past 20 years, IT gradually moved out from under finance, to become more strategic--working for the provost or president; being at the senior table.

Now what I’m starting to find, anecdotally, is a fair number of schools reconsidering that, and moving IT back under finance. And if IT moves back under finance, the danger is that it plays more of a commodity role and is viewed not as something strategic, but as an expensive cost center that should be tightly managed in these times. At those institutions, the perception of the IT department is changing, but in the wrong direction.

CT: And what are the benefits to schools where IT is in fact not being moved back under finance?

SL: At those colleges and universities where IT is, instead, part of the institutional strategy, we see some very creative things happening. We see the growth of blended and online learning, and we see communities of practice being enabled by technology so that cross-departmental research happens within the institution. We see IT partnering with the library to implement a more modern version of the library. And so we see technology helping people to create knowledge and to learn in ways that create new efficiencies or new access models. Those are examples of how IT can make an overall contribution to the institution and its effectiveness.

CT: What can IT leaders do to guide perceptions on campus?

SL: What today’s CIO or IT leader really needs to do, is to ensure that the campus understands the true value of IT. And this is incumbent on the IT department as a whole. My model is that IT needs to think of itself as a professional services firm, a consulting firm in the best sense of the word, and the department needs to engage with the campus in such a way that it’s helping people work smarter and more effectively so that IT isn’t seen just as a cost center.

CT: So does the responsibility to change perceptions of IT across campus, where that’s needed, largely fall with the CIO? How is it possible to open up the campus to engage with these more fruitful ideas about IT?

SL: It starts with the CIO, and with the CIO establishing the right senior-level relationships on campus. That’s what will create that opening, absolutely.

CT: Will CIOs actually be able to make that a priority, though? Some CIOs seem to be very busy with the “doing more with less” part of the equation…

SL: They are busy, but it’s sort of like the captain of a sailing ship in a storm. The captain could get involved in making sure the bilge is pumped out, that the sails aren’t overwhelmed… they could get deeply involved in tactics only to drive the ship right up onto the rocks. The CIO needs to create a really strong team, so that as CIO he or she can navigate this discipline of creating value for the institution--and create real value by not merely focusing on the tactics of budget cutting.

CT: So does the motivation become, then, “save our IT ship”?

SL: Well, yes--but for the good of the institution. I could deliver a very austere IT budget that would provide all the fundamental IT services here and now but might in time cripple the future flexibility of the institution.

On the flip side, I’m not arguing that IT should be given unchecked resources in these highly constrained times. It is incumbent for IT leaders to be able to demonstrate return on investment. But to do that, IT needs to move up the strategy ladder.

CT: Then where does IT belong now, in the “new normal”?

SL: I believe IT should be an equal member at that senior strategy table, helping to bring to the institution the state-of-the-art of the possibilities of technology for teaching and research. It needs to help the senior leadership of the institution understand and shape state-of-the-art IT into the strategies and tactics that are relevant to the institution’s unique mission.

This is actually a wonderful time for introspection, and it’s a wonderful chance potentially to shed a few old business practices, which will allow you to cut some costs and create capacity for a new kind of IT business.

[Editor’s note: Stephen Laster will give a keynote, “The Road Ahead: Driving Innovation in the ‘New Normal’” on July 21st at the Campus Technology 2010 conference in Boston.]

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