At a time when HE providers are under financial stress, the need to find more efficient ways of working has become of vital importance. A period of rapid growth in student numbers and a huge cut in the level of real-terms funding has left many institutions facing profound questions about their financial sustainability. Efficiency has taken centre-stage in the dialogue with government and Universities UK has launched a large initiative with its Transformation and Efficiency Taskforce.
The first significant output from the Taskforce is a report entitled “Towards a new era of collaboration”. It sets out seven themes for improvements in organisational efficiency, collaboration and the operating environment and it identifies eighteen specific actions to drive change across this landscape. There is a lot to like in the report; the analysis is realistic and robust, and the actions have clarity and offer the prospect of tangible change.
But top-down initiatives like this can only go so far. The roots of inefficiency stretch deep into institutions and the journey to a more stable and sustainable future will be different in every case.
A wise man – working in the Further Education sector – once said to me that the fundamental difference between HE and FE is that HE is a sector of regulated providers and FE is a sector of regulated provision. HE institutions create their own qualifications and have the freedom to structure and deliver them in any way they choose. This level of institutional autonomy is one of the great strengths of the UK higher education sector. It is diverse and innovative and has the flexibility to respond to changes in government policy and demand from students. Historically success has been defined in these terms; meeting the needs of students, providing a high-quality experience in a range of delivery modes and making huge progress on agendas like access and participation.
This is all good stuff and we should treasure and celebrate these things. But there are other issues that have had less prominence over the years. The majority of HE institutions operate on a not-for-profit basis; although there is an obvious need to be financially sustainable, they haven’t had the overriding objective of maximising profits. Conversations about cost and efficiency have been part of the dialogue for many years, but they have not previously been centre-stage in the way that they are now.
There’s a concept in systems known as technical debt. This is the additional future cost of working that results from making shortcuts and quick fixes to systems and data structures. These shortcuts and quick fixes introduce inconsistencies and complexity which lead to increased cost and risk. They layer on top of each other making systems increasingly unstable and difficult to maintain.
Technical debt has a habit of creeping up on you. It can go unnoticed for years and then suddenly things reach a tipping point; a routine patch breaks a system or an apparently simple change becomes major project.
Technical debt is especially prevalent in organisations where business requirements rapidly change and deliver high levels of flexibility and optionality to customers. The innovation and student-centric delivery that makes HE institutions great also makes them prone to accumulating high levels of technical debt.
By their very nature, systems like the world to be simple and well-ordered; they are built on data models and business logic that assumes a high degree of rationality and stability. In reality the world is complex, fluid, often irrational and occasionally a bit chaotic; this tension between systems and the real world sits at the heart of technical debt.
Technical debt exists within systems and between systems; applications that have evolved far from their original implementation and integrations that are piecemeal and chaotic. A strategic approach to systems architecture, delivery and governance will enable a more robust and flexible systems estate and one that accumulates technical debt at a far slower pace.
The concept behind technical debt can also apply to business processes and to organisational architecture – the structures, policies and culture of an organisation. We make quick fixes to all these things to support innovation in service delivery and high levels of customer choice. But this ends up creating layers of complexity, risk and inefficiency and we often face a toxic cocktail of technical debt, process debt and architectural debt.
In my experience, the HE sector is now wrestling with all these debts and because institutions are highly autonomous, the pattern and nature of the debts will be different in every case.
The current debate around institutional efficiency reflects this critical accumulation of debts and the approach to addressing inefficiency must reflect the nature of the underlying problems.
In recent years many HE institutions have launched Digital Transformation programmes to reset their operations and eliminate the technical, process and architectural debt that has accrued. It can be a huge undertaking, and it carries a weight of expectation that can become a burden itself. These debts have accumulated over many years and lasting solutions can only be built if you take a long-term view.
Digital Transformation is a long, hard road to travel and the journey is littered with challenges and risks. Even the term ‘Digital Transformation’ can be problematic since it implies a focus on technology without addressing the debt in business processes and organisational architecture. The UUK report includes recommendations to develop institutions’ abilities to understand and deliver genuinely beneficial transformation.
The other big theme in the UUK report is the idea of shared services and infrastructure. The idea of a more efficient approach to common services and functions is compelling and the central admissions service and the Joint Academic Network are highlighted as examples of successful shared services in HE. However, to unlock the benefits of a shared service, the business operations that are supported by the shared service require a high level of standardisation. JANET operates on industry standard internet protocols and the admissions service – now known as UCAS – is built on a standard admissions process and timetable that all institutions have to work with. These shared services have existed in one form or another since 1984 and 1961 respectively. In today’s diverse and innovative HE sector, creating that level of operational standardisation between institutions is a real challenge.
The three types of debt provide a powerful model for considering issues of inefficiency in higher education institutions. Through this lens, the route to reducing inefficiencies involves the standardisation and simplification of technology, business processes and organisational architecture and achieving harmony across these dimensions. For higher education institutions this involves achieving the right balance between simplification and standardisation of processes while maintaining the ability to innovate in the delivery of high-quality, student-focused solutions. The sector-level initiatives around efficiency are to welcomed but the route to achieving a sustainable balance will be different for every institution. Efficiency really does begin at home.
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