The recession has forced many institutions of higher learning to rethink their business models to not only reduce costs, but also reshape themselves to react to the rapidly changing enrollment patterns. According to National Center for Education Statistics data, over a ten year period from 1998 to 2008, enrollment at two-year public colleges grew 32 percent, while enrollment at four-year public institutions increased by 19 percent, and by 17 percent at four-year private institutions. The recession of the past two years has only reinforced this trend as unemployment rates have hovered near 10% and people are seeking economical options to increase their skill set. This creates issues for both two-year and four-year institutions.
The majority of public two-year and four-year institutions receive some amount of funding from their state governments, which, like the institutions are under extreme financial pressure facing decreasing revenues and increasing requirements for limited resources. Tuition alone does not cover the current operating costs, and endowments and private contributions are strained. Two-year institutions are facing capacity and resource constraints and four-year institutions, with their higher fixed cost base, are trying to balance new models of learning (on-line and accelerated degrees), with the ever competitive environment for students, requiring amenities such as new dorms and facilities.
Both two and four-year institutions are under significant pressure to reduce costs while increasing the program offerings to match current economic needs, and increase the number of degrees awarded, all the while maintaining the institutions educational standards. It’s the classic “do more with less” scenario. Traditionally, institutions handle these situations by cutting supply expenses, freezing hiring and salaries, and limiting travel. These actions are usually sufficient until things return to “normal.” But, what if things don’t return to normal? What if the current situation is the “new normal?”
Now is the time for institutions of higher learning to re-think the way they operate. To fundamentally review their processes and made sure they are adding value for their stakeholders. Institutions can do this at an organizational level, answering questions like: How do you develop and deploy your strategy? How do you engage students and stakeholders to gather information and service their needs? How do you measure, analyze, and improve organizational performance? Additionally, this should also be done at the operational level, for example, answering: How does a student enter the institution from application, to registration, to housing assignment? Do the institutions processes add value to its students and stakeholders? Are the processes currently designed for departmental efficiency or system efficiency? How does a student “move” through the organization? These are some very fundamental questions colleges and universities should ask to help them focus and prepare for the uncertainty that is the new normal.
Process Improvement techniques and methodologies can help colleges and universities review, analyze and improve the strategic and operational processes that shape the organization. By first understanding the purpose and value of delivered, then mapping the process through a Value Stream Analysis, institutions can develop a coordinated improvement effort across the system. Presidents and Chancellors scratching their heads on how to meet their budgets and the needs of their constituents should consider looking to PI techniques to improve efficiency, reduce costs and increase employee engagement.
What do you think? Can Process Improvement be effectively utilized in higher education?