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The Differentiating Value of Efficient Institutional Management

AUDIO | The Differentiating Value of Efficient Institutional Management
Though highly efficient business management practices are not a market differentiator, they are mission critical for a successful institution and they impact the student experience.

The following interview is with Eric Denna, vice president for IT and chief information officer (CIO) at the University of Maryland, College Park. Denna spoke at the recent EDUCAUSE conference about the evolving role of IT professionals in the modern postsecondary institution, specifically exploring how CIOs can be part of defining an institution’s business model and strategic direction. In this interview, he expands on this topic and discusses how IT can play a role in improving the business-like management of higher education institutions.

1. What role do university IT professionals play in supporting the development of more business-like management of their institutions?

I worry that we characterize a for-profit business as efficient and the model to be aspired to and not-for-profit as inefficient and something to be overhauled. I’ve seen a lot of waste in for-profit businesses, as well as in not-for-profit. It’s more an issue of disciplined management than it is for-profit and not-for-profit.

2. What are the greatest inefficiencies not-for profit universities see in terms of their own management?

We’ve got opportunities in terms of basic core business functions like procurement and HR and facilities management and IT itself. We can be more disciplined. Unfortunately, sometimes in some organizations, not-for-profit means we don’t have to be disciplined in terms of how we manage things. I disagree with that.

I use five questions I’m constantly asking. The more disciplined you are in asking and answering these questions, the better the results. The five questions I ask are:

  1. Who do we serve and what are they trying to do?
  2. What services do we provide so they can do what they’re trying to do?
  3. How do we know we’re doing a great job?
  4. How do we provide the service?
  5. How do we organize?

What I’ve experienced — in both for-profit and not-for-profit — is too often we reverse those questions and we first start drawing boxes and lines and start trying to cram processes inside of those. We don’t tend to measure performance terribly well. We imply service and we hope there are customers.

3. What role does the IT leader have in performance measurement and that initial understanding of who it is they’re serving, how to link the mission, and then how to execute the plan?

An IT organization has to be the model of disciplined management. When I arrived here at the University of Maryland, I went on a listening tour where we identified leaders and influencers across campus. I just asked them the first three questions over and over again, trying to understand what they’re trying to accomplish, the IT services they needed to accomplish what they were trying to do and then how they answer the question, “Are we doing a great job?” That’s the first thing; we have to be an example of how this is done.

The second is, we have a few things that really drive IT investments in organizations. One is that we want to improve the way work gets done. The second is decision making. If we want to improve decision making in an organization, that’s another driver in investing in technology.

The most strategic uses of technology will be for core work of the university — that would be enhancing learning on the part of students or enhancing research on the part of the faculty. That actually begins to affect the value proposition of the university.

4. How can more efficient management improve the customer experience for students?

Two ways. One is, the better we are at managing support services, the more we can invest in core work. The second is universities find themselves in a competitive marketplace unlike any other time.

The experience our students have in first learning about the university, in applying for admission, in enrolling in classes, in the process of being graduated, the whole learning enterprise; all of those experiences cumulatively have shaped how the student feels regarding the university. We’re moving from a mode of interacting with students for a four-year period to us being lifetime partners in learning. We’re interested in looking at that whole arc in the relationship between the university and the individual learner.

5. Building on that concept, can greater internal efficiency help to differentiate institutions from their competitors in the eyes of students?

There’s a nice model developed a few years ago called purpose-driven investing. It’s a two-by-two model where you have market differentiation on one axis and then mission criticality on the other axis. When you get to that high market differentiation and high mission criticality, the upper right hand quadrant is where differentiation occurs.

There’s an acid test of whether something is truly market differentiating. Would you advertise that system on a freeway billboard? As you can imagine, as a university, would we ever advertise on a billboard, “Come to the University of Maryland because we have the best payroll system in the whole country”? People would look at that and laugh. That’s a means of differentiating whether something is truly a market differentiator versus a mission-critical kind of function. If we over-invest in those things, we take resources away from what’s truly market differentiating.

6. What are the biggest roadblocks standing in the way of business-like management for colleges and universities?

One of the interesting things that’s happened to big universities is the same thing that happens in any for-profit enterprise that grows over time. A lot of universities started out as small enterprises, but over the last few decades in particular, these enterprises have grown to become multi-billion-dollar organizations with tens of thousands of both students and staff, quite complex kinds of organizations.

Sometimes, people who have been in the institution have kind of grown up with it and all of a sudden find themselves in a completely different world for which they’ve really never been trained; they’ve never had experience with advanced management concepts and training. That becomes a bit of a challenge for any organization.

I’m quite involved in a lot of startups and there’s an interesting transition when a startup moves from hitting its first million in revenue to hitting the $10 million revenue mark and the $100 million revenue mark. The kind of talent you need through those transitions becomes very different. That’s the same challenge universities face. They’re big enterprises now, multi-billion-dollar organizations and the sophistication that’s needed on the management side is quite different than 30, 40, 50 years ago. Interestingly, universities don’t pay the same attention to the talent management challenges that are the focus of a lot of for-profit enterprises.

7. Is there anything you’d like to add about the importance of efficient management in the postsecondary context and how that efficient management impacts the student experience?

For one, paying attention to the student experience. What we do at the university is we hire thousands of bright faculty and we hire them essentially to be entrepreneurs, to figure out a research discipline, a line of inquiry, and then we try to wrap services around them.

What that tends to foster is a lot of what some would call “stovepipe organizations,” where we carve up processes that should be cross-functional and we carve them up into discrete things and we lob work over organizational walls. The problem that creates for the students is we essentially make the student become our integrator. For everything from getting admitted to the university to applying for classes, for graduation, for whatever, we’re constantly trying to making the students the integrators of the university instead of stepping back and looking at processes, work on behalf of the student or the faculty and thinking across all these functional boundaries, and looking at what’s the best way to get this work done.

The outcome of that is typically that we provide a much better experience for those we serve.

This interview has been edited for length.

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