IT Planning: Cultivating Innovation and Value

• By Donald M. Norris, Anne K. Keehn
• 10/31/03

Nicolas G. Carr provoked a vigorous debate with his article, "IT D'esn’t Matter," in the May 2003 issue of the Harvard Business Review. Echoing the concerns of many corporate CEOs and university presidents, Carr suggested that information technology (IT) had become a commodity, offering precious little strategic differentiation [1]. A stream of authors refuted Carr’s thesis [2, 3, 4] through every conceivable medium—e-mails, blogs, letters to the editor of HBR, articles, and newly published books. They all suggested some variation on the contention that IT can deliver strategic differentiation, leading to competitive advantage, but only if enterprises use IT to fundamentally change the dynamics of their organizations through collaboration and innovation in support of the process of change. Innovation can be leveraged using the insights resulting from a new breed of strategic planning for IT that focuses on deploying IT to create new value propositions and experiences for learners and other stakeholders that are truly transformational.

Why should colleges and universities care about "strategic differentiation" if their fundamental mission is teaching and learning (and research and other things as well)? Too many institutions settle for "competitive parity" with a group of peer institutions. They should set their sights higher, building a "learner-centric" focus and questing to truly differentiate themselves from other institutions through maximizing value for their individual learners and other stakeholders. This will yield the "competitive advantage" necessary to attract and assure the resources necessary to support investments in IT and development of new practices and competencies. In order to fulfill their mission of service to learners and to justify their investments in IT, colleges and universities should use IT to drive innovation in pursuit of greater value for learners and other stakeholders.

But not all innovation is equal. Experience with leading-edge organizations suggests that systemic, enterprise-wide innovation is more effective in creating value differentiation between enterprises than fragmented, individual innovation [5]. Moreover, many organizations are shifting the focus of innovation away from products and services and toward the experiences through which individual stakeholders are engaged [6]. IT strategic planning needs to move beyond planning, implementing, and executing "systems of record," to creating stretch goals for using IT to enable innovation, personalized value propositions, and new experiences for stakeholders. This will generate genuine competitive distinctiveness.

Creating New Value Propositions

IT strategic planning needs to address what value is all about and how IT can be used to maximize it. The conversation about value on investment (VOI) in higher education was carried several steps further in the ECAR Research Bulletin "Value on Investment in Higher Education" [7]. Value was suggested as a more discerning strategic compass than measures of relative quality or reputation for many colleges and universities facing times that are both uncertain and resource strapped. Quality measures often emphasize inputs, rather than outcomes. The level of resources is often taken as a surrogate for quality. Such measures rely on quantitative metrics that can be compared easily and aggregated to an institutional total, rather than being guided by what is important to stakeholders. Quality is a monologue by institutions and the arbiters of programmatic/reputational quality. On the other hand, value is a dialogue between institutions and individual stakeholders.

Value balances three factors: (1) the nature and quality of outcomes, (2) the essence of the experiences through which the outcomes are achieved, and (3) the cost/price. Like the potential energy in the coils of a spring, latent value resides in the knowledge resources, programs, processes, relationships, infrastructure, and competencies of faculty, staff, students, and other stakeholders. The manner in which these resources are combined and engaged determines the value experienced by each individual stakeholder. The capacity to enable new and personalized experiences and value propositions is an important institutional competency.

Delivering greater value for learners and other stakeholders can create strategic differentiation for individual colleges and universities. Two institutions with similar "quality" of programs in the eyes of external evaluators can have substantially different value propositions in the eyes of particular learners and other stakeholders. Enhancing the value proposition for stakeholders will require greater levels of collaboration, innovation, and creativity, at all levels—individual, departmental, institutional, and inter-institutional. Given resource scarcity, discerning and piecing together distinctive clusters of hidden value is emerging as a newly appreciated form of innovation.

Overcoming Our Innovation Deficit

American universities are "innovation challenged" as enterprises. We encourage innovation with a small "i"—individual research, pilot projects, functional improvements, and new, experimental practices. But we often treat these innovations as "add ons" or "one offs" that operate in a parallel universe to existing core practices. In truth, colleges and universities have been ineffectual in innovation with a capital "I"—spreading the DNA from successful, proven innovations across the institution and changing core practices in response to new insights on best practices. Systemic, institution-wide innovation is our short suit, at the very time that such innovation is being shown to be essential to competitive relevance in the Knowledge Economy [8]. In order to thrive, colleges and universities must overcome this deficit and leverage collaboration, innovation, and creativity. Rather than aiming for mere competitive parity with other institutions, we need to consciously focus on maximizing value for stakeholders. This will lead to "competitive relevance," combining distinctiveness with focus on the stakeholder. The innovation dialogue needs to include all levels of leadership. To foster innovation and drive direct value for the stakeholders, the IT infrastructure needs to align with institutional operations and overall institutional strategy.

The innovation deficit in higher education was described by Mary B. Marcy in a recent Point of View in The Chronicle of Higher Education[9]. Dr. Marcy noted that even successful innovations (such as learning communities, student engagement, and the use of IT to reinvent courses) are seldom integrated into the institutional culture and spread across the enterprise. She g'es on to suggest that many foundations are withdrawing funding for research on innovation in higher education because it d'esn’t lead to broad-scale dissemination.

Scalable and Enterprise-Level

Encouraging "1,000 points of light" of individual innovation can be a good beginning point for identifying potential, enterprise-level innovations, but not always. Successful, enterprise-wide learning support innovations usually fulfill some combination of three criteria: (1) the innovations are "scalable," enabling the resources, materials, and standards of learning for courses to be used for multiple sections of the same course and even in other courses and contexts with modest repurposing; (2) the most successful practices can be leveraged and deployed across the institution and even beyond, and (3) the innovations create new experiences and value propositions for learners. But innovations in higher education have often fallen short of this mark. For example, the early generations of using PCs and the Internet to advance learning failed to produce software applications and materials that were scalable beyond classes of 30-50 students [10]. Moreover, they enshrined the notion, still common in some sectors of higher education, that "quality" courses must be developed personally by each individual faculty member.

On the other hand, scalable, enterprise-wide innovations have been around both public and for-profit higher education for a long time. The British Open University was a pioneer in the use of innovative, team-developed, scalable learning resources, starting years ago as correspondence courses. The University of Ph'enix and other for-profit learning providers also practice scalable, enterprise-level innovation, as d'es UMassOnline among other nonprofit institutions. The University of Southern Queensland is taking these practices a step further, infusing advanced knowledge management practices into its learning offerings, providing learners with new experiences and 24/7 interactivity with exceptional learning resources and insights [11] In most settings, however, higher education remains a "handicraft" industry, where insight and innovations remain within individual faculty, courses, or laboratories. To be sure, professional associations and scholarly communications within the disciplines offer particular kinds of collaboration. However, a "cottage industry" approach to learning environments prevails. If continued, this will doom higher education’s capacity to innovate at the enterprise level.

A Host of Institutions Show the Way

As recently as five years ago, it could honestly be said that there was a dearth of proven innovations and practices that could be leveraged to drive enterprise-wide innovation in higher education. This is no longer so. The so-called "back to school" issue of the EDUCAUSE Review offers dramatic examples of successful, IT-supported innovations in learning experiences that can be leveraged to create enterprise-wide impact. "A Revolution in Knowledge Sharing" describes emerging innovations in knowledge sharing and digital asset management [12]. Carol A. Twigg writes of the Pew-funded Program on Course Redesign, which utilized a wide variety of different approaches to truly reinvent large lecture sections, enhancing performance and dramatically reducing costs in the process [12]. Carole A. Barone describes the evolving work of the National Learning Infrastructure Initiative (NLII) to support learning innovation at individual, department, institutional, and consortial levels [13]. Dr. Barone cites a number of noteworthy enterprise-level innovations: the Modular Organizer and Teaching System (MOATS) at the University of Arizona, which provides guidance in developing learner-centered practices across the institution; the Student Learning Objectives (SOL) System at the University of Washington, defining learning objectives for all of the University’s 6,000 undergraduate courses; and the consortia efforts of the Open Knowledge Initiative (OKI) and the Multimedia Educational Resource for Learning and Online Teaching (MERLOT) to advance the sharing of knowledge objects for learning.

Moreover, Allen E. Guskin and Mary B. Marcy’s article in Change [15] captures the work of the Project for the Future of Higher Education. They describe a set of practical, proven principles for establishing a learner-focused culture, a sustainable faculty professional experience, and reduced cost per student, all driven by changes in the patterns and cadences of the undergraduate experience and supported by IT-enabled innovation. Further, many of the programs of the American Association for Higher Education—learning communities, service learning, teaching and learning roundtables—have established archipelagos of innovation across the higher education landscape. Clearly, a focus on innovation and value has taken root in the soil of American higher education. It’s time to "water where the grass is green" and facilitate the spreading of these innovations so they can become systemic.

Driving Value, Using IT

American colleges and universities are the envy of the world, based on traditional measures of quality—reputation and image, quality of graduate and professional programs, funded research and Nobel Prizes won by faculty and researchers, expenditures for information and communications technology, campus facilities and amenities, and many additional indicators. But the times call for paying attention to new vectors of value on campus and mobilizing new approaches. Campuses need to use IT to support innovation, create new experiences for learners, and facilitate cost reduction. The next generation of innovations in higher education will seek to create new, personalized value propositions for learners, faculty, staff, and other stakeholders. Consider what could happen to the learning experience by seriously committing to stakeholder value.

Crafting Stretch Goals

IT is a key enabler of innovation and new, personalized value propositions. In order to justify ongoing investments in enterprise resource planning (ERP), learning management systems (LMS), enterprise portals, the next generation of content management, and Web services applications, institutions will need to commit to using these tools to pervasively reinvent processes, aggressively pursue cost reduction, and enable the personalization of value propositions. If institutions cannot make such commitments, they should limit their investment, because they would not be able to achieve strategic differentiation from their investment in IT.

If campus leadership will commit to deconstruction and reinvention of processes, a whole new generation of stakeholder-focused services may be discovered. Consider the following possibilities: (1) differential tuition and fees based on the nature of the "experience" chosen by learners; (2) multi-semester, future-oriented scheduling plans (performance contracts) enabling students to "lock in" a schedule and price a year or two in advance—perhaps paying a premium for lock-in; (3) intrusive mentoring and monitoring of academic development to reduce attrition and lower the "total cost of completion" for students and the public; (4) block scheduling so commuter students need to come to campus one day a week—or not at all if they wish; (5) personalized variations of each course, drawing from a "buffet" of options relating to mode of learning; and (6) revised scheduling algorithms to give students the option of paying a premium for prime course hours or receiving a discount for "off-peak" scheduling. The new applications supporting these capabilities would need to be loosely coupled to existing ERP/legacy systems through Web services. These applications could be continuously, flexibly adapted. They would enable new, personalized value propositions.

Knowledge Exchanges and the "Electricity Grid"

Transforming e-Knowledge [16] describes the emergence of marketplaces for the exchange of learning objects and knowledge flows, and the emergence of e-knowledge commerce. The Learning Content Xchange and the eKnowledgeXchange are two emerging ventures that aim to establish content exchanges in postsecondary and K-12 sectors [17]. But to really deliver value to stakeholders, suppose institutions determined to create a sort of electricity grid for learning, where learning offerings could flow to where they were needed, based on pre-established agreements among institutions and clearly defined learning outcomes?

For example, in an underserved area like nursing, institutions in a network such as the Minnesota State College and University System (or other systems of institutions or consortia) could create online sections that could be offered as "surplus" capacity across the grid. Standards of learning and demonstrated competencies would be established at the front end. Campus settings without a nursing program could serve as learning agents for the stakeholders in their communities. As learning agents, they would commit to solving the learning needs of local learners, companies, associations, and other stakeholders, serving as learning providers, brokers, mentors, or a combination of roles. A division of tuition and fees would be pre-negotiated to create a win-win arrangement for both providers and learning agents/brokers. Those with programs could contribute to the network and/or use it to balance supply and demand. They could even participate in a nursing community of practice spanning different institutions.

Such a grid could be used for learning offerings in a wide range of other fields, as well. A campus could develop scalable learning resources using a team approach. They could prepare to offer between 10 and 15 sections, drawing from a cadre of tenure-track faculty, adjuncts, and mentors that would constitute a genuine community of practice around the course. Rather than the adjuncts commuting to three or four institutions to cobble together an itinerant living, they could be an integral part of the community of practice and be assured a reasonable employment by being able to teach multiple sections through the grid. The consistency and cost of learning would improve as well.

The grid and exchange mechanism could create a manageable, flexible surplus of supply that could be used to assure that students could get the courses they would need to graduate in four years. Supported by such an exchange, institutions could commit to multi-year, future scheduling. States with rapidly growing learner populations could mitigate the need for additional facilities and faculties by using the grid; slow-growing states could become exporters. The New York Times [18] recently reported that the University of Illinois cut 1,000 low-demand courses in hundreds of subjects because of financial exigency. Suppose the best of those courses were repurposed for the grid, developed by the lead faculty and a team of mentors, and offered via the grid to universities all over the world, shooting not for a single section enrolling 15 learners, but for five to ten sections of 35, facilitated by the senior professor and her mentors?

In addition, advanced content management and assessment tools could be part of the grid and used to mentor, monitor, and enhance student achievement. Web services-based tools could be developed and loosely coupled into existing IT infrastructures to create such achievement engines. Differential approaches to learning, competency demonstration, and intrusive advising could be used with different learners. The grid and exchange metaphor could enable a wide range of innovations, based on the notion of creating new, personalizable value propositions.

The Potential for IT Planning

Most institutions use IT planning as an exercise in developing infrastructure to accomplish simple extrapolations of current practices. Rather than enabling a new future, they extrapolate more efficient versions of current practices into the future, five years at a time. Such practices squander a golden opportunity to transform IT planning into a strategic instrument for focusing and mobilizing the innovative capacity of colleges and universities, at the enterprise level. IT strategic planning should be a continuous developmental process, not a once-every-now-and-again activity. It should be regenerative, engaging campus leadership at all levels from the top (President, CIO, CFO, Provost, Advancement, Student Affairs) to the grassroots around the organizing principals of innovation and value. And it should aim to develop stretch goals, a culture supporting innovation, and the capacity to make sound, expeditionary decisions about the selection and use of technologies.

Howard Smith and Peter Finegar suggest the immediate potential for transforming process and practices: "The perceived role of IT would begin to change as IT shifts from providing 'systems of record keeping' to providing 'systems of process and practice.'" [19] Through the fostering of innovation and creativity in the use of IT, we can move from data-centric to process-centric perspectives. And we can evolve from provider-centric to stakeholder-centric value propositions. Planning can be used to drive competitive distinctiveness and value for the institution and enable its stakeholders to develop the capacity to adapt, react, and adjust to constant change. IT planning needs to focus not only on the "change process" but the "process under change" and how it aligns to the overall institutional mission.

These new practices are emerging, today. The authors are working with a number of colleagues in different institutions to integrate these actions into a new, expeditionary approach to strategic positioning and planning for IT in colleges and universities. These new approaches combine transformational vision, expeditionary initiatives, and radical incrementalism in pursuit of personalized value propositions and new experiences. The expeditionary approach turns IT-supported initiatives into continuously evolving migration paths rather than uncertain leaps into the future.