Time To Evolve Your Higher Ed Business Model?
Covid-19 has altered our lives forever and in the light of this 'new normal,' specific shifts in the societal and technological front have impacted our education sector, too.
Before the pandemic, the higher ed industry was slowly inching toward a digitalized structure. The pandemic simply accelerated these technical advancements.
But it is just not the technological landscape that is changing the face of higher education. There are several other factors influencing higher education like financial challenges, academic institution competition, the unconventional age of college-goers, and the changing societal needs.
Clearly, it is the hour of evolution for the higher education business model.
Cultural and technological changes that impacted the higher ed business model
We are two decades into the 21st century, so why should our higher education model remain the same as that of the 20th century?
And rightfully so, today, society has made immense strides in both cultural and technological advancements.
These changes have inevitably contributed to the changing structural transformation of the higher education model. So, let’s look at the 4 primary developments that have posed a challenge for the existing higher ed business model:
1. The requirement for life-long learning
In the given time and age, the need to constantly upskill yourself and stay in touch with relevant concepts is a must.
We exist in a digital economy, where disruptive and ever-evolving technological advancements guide most jobs. Additionally, there is also an excellent level of flexibility in employment and the presence of automation in labor.
This has invariably pushed out the industrial-age mindset where education was required in the primary stages of life. Instead, education today requires consistent upscaling that most undergo throughout their entire lives.
In fact, it's the only way to survive in the non-linear world and the modern careers it offers.
2. Changing needs of students
Much like any other business sector, the field of education is also guided by the ever-changing expectations and needs of its consumers, i.e., the students in this case.
The student demographic is witnessing a significant shift and normalizing its non-traditional needs. Thanks to the varying lifestyles, preferences, and circumstances, the young generation has significantly moved away from that of the previous generation.
They don’t want the stringent fixed courses taught in the same classroom style format.
Hence, the one-size-fits-all education path is no more celebrated as it once was. Instead, the need for a seamless, flexible, and personalized educational experience grows popular in demand.
3. Emerging AI technologies
Gen Z has grown up with technology intricately woven into the very fabric of their being, so they expect the same digital experience in their education.
This digital transformation has actively contributed to how the higher education business models are reinventing themselves. The innovators present in the education industry are down to challenge the status quo of the model structure.
No wonder even major tech giants like Amazon and Google are partaking in the alternative approach of an AI-driven, personalized educational system.
Additionally, the ‘Netflix for Education' teaching scheme allows for higher flexibility and more effortless adaptability. And not to forget, it makes the process of education much more enjoyable.
5. Skills more critical than a degree
The idea of a degree being the most vital sign of an educated person has existed for far too long. Today, employers value skills over degrees, thus transferring the focus from a piece of paper to actual talent.
While it’s true that holding a higher-education degree significantly improves the chances of employment and better income, its value is dramatically falling.
Students now wonder whether the traditional education system that creates lasting student debt is worth it. After all, the job markets have become extremely unpredictable, so the only thing that would help compete is a skillset.
Degrees are simply a signal that vouches for a potential employee's capability. At the end of the day, it does not honestly assure excellent job performance.
Innovation is more essential than tradition
For any business sector to last long, innovation and creativity are intensely crucial. Adjusting to accommodate the needs of the consumers and also staying up-to-date with the ongoing societal and technological advancements is a must!
Education today is not simply the means to the end– it's not perceived as the only way to secure a good job. The current generation and its educational needs have modernized. They want education for its experience, ease, and to satiate their hunger for knowledge.
This is precisely why the sector observes the regular implementation of disruptive and innovative ideas.
To understand this better, consider the example of mega-online educational universities or online educational platforms like Coursera.
With over 92 million learners registered, the platform offers an active learning and dynamic environment. Additionally, it facilitates a more effortless learning experience, given the wide range of courses available.
Hence, this approach was uber-successful, especially during a pandemic, when people were locked in isolation. It helped upskill people and ensured more equitable job opportunities around the world.
As such, this innovative learning approach is perhaps the biggest reason to do away with traditional learning structures.
4 trends shaping the higher ed-post-pandemic business models
Innovation is not the only trend that is invading the high-ed business model. Here are 4 more trends that are actively shaping how higher education business models will look post-pandemic. These are:
1. Changing the higher education business model
Most business leaders are not interested in maintaining things as they were. They do not however want to make some sudden radical changes that would be hard for the consumers to accept, either.
So, their idea is to recalibrate and revise the higher-education model post the downfall of Covid-19. Hence, they are keen to invest in information technology, remote working, shared services, automation, etc.
2. The core competency of technology expansion
There was a time when technological advancements were solely looked at as expensive and needless add-ons. Today, it has become a core competency in every institutional strategy.
Business leaders are aware that the technology in the educational sector will blow up and strengthen the revenues. For example, universities are not noticing the need to use 3D hotspots to stimulate galleries and labs. Some are keen on including stimulations and gamification in online courses to make them more collaborative even if there is physical distance.
It will thus allow for the expansion of online enrollment and better engagement during the courses.
This trend will have the business leaders balancing the existing technical systems with future investment in new technology.
3. Less investment in residential amenities
It will come as no surprise if the universities and business leaders begin to downsize their investment in infrastructure. Since the educational model is shifting to an online or hybrid structure, it makes absolute sense to minimize expenditure on on-campus amenities.
As such, it is expected that the residential education demand will considerably change. That said, there is also the awareness that the experience offered in in-person classes and interaction cannot be replaced.
So, while the institutions will continue to integrate virtual systems, there will always be space for the involvement of one-on-one education. So, the focus might be shifting to better accommodate distance learning but it’s not changing altogether.
4. Changing financial strategies in the face of the monetary crisis brought by Covid-19
Unsurprisingly, higher education has also faced a huge financial brunt posed by the pandemic. The cash flow suddenly stopped as the physical universities shut down, thus putting an end to all the auxiliary revenues, parking fees, dinner sales, etc.
It’s no wonder that business leaders will aim to change their financial strategies to accommodate their limited means, too. This will mainly focus on three things:
- Knowing how to accommodate students’ requests about enrollment and preparing accordingly is the first step. This will essentially require modification in enrollment goals, to at least meet the minimum net tuition revenue.
- The second step is to keep the focus on the core competencies of the institutions. So, if some institute is focused on traditional learners, now would not be the time to shift focus to adult learners. Sticking to the ongoing program will save resources immensely.
- Lastly, knowing how to create flexible financial aid packages is of the essence. One cannot simply offer the same aid to every student, given the financial crunch. Knowing how to help a student bridge the gap between their finances and helping accordingly is the key!
8 areas higher education institutes should explore for future-proof business models
Redefining our future in the face of a global pandemic is tough. Yet, it's also time to reimagine the new state of the educational sector. So, when thinking about the restructuring of the educational field, one cannot ignore these 8 essential areas. These are:
Personalized educational content
When no two people are the same, why should their educational graph charter the same course? Every learner comes armed with a host of strengths and weaknesses, coupled with differing skill sets, interests, and needs.
Considering this difference in each individual, it makes complete sense to create an educational approach that is customizable for each learner. This would enhance understanding and engagement, ensure better retention power, and pump the learner with apt motivation.
Hence, investing in the creation of personalized education content is a must for a successful educational experience.
Investing in revenue-driven partnerships
This trend might spring up in the private educational sector, where higher educational business models are always looking for partnerships.
It is important as finding the right investor and alliance can surely infuse the institution with the necessary resources and expertise. It would also eventually lead to the renovation of educational institutions.
Additionally, not only does this ensure cost reduction but also provides easy scalability of courses, which is appreciated in this pandemic scenario! This trend is slowly gaining momentum as several institutions partner up together to offer joint online programs.
Adaptive institutional pricing
If you look at the healthcare sector, you will notice the gradual shift of the fee-for-service payment model to the value-based system.
Similarly, thanks to the change in learners' demographics and education delivery format, the educational system is undergoing adaptive institutional pricing, too. This idea is worth exploring as it attaches the educational costs to the possible learner outcomes.
For example, if an institution adopts differential tuition fees, it can tie the cost to the learner’s earning potential or the course’s internal costs. It’s a ‘pay for what you receive’ kind of educational structure. Here, the pricing is specific to the kind of program the student chooses.
Imagine it like a subscription plan but for educational services!
SaaS solutions for cost reduction and better control
The benefits of cloud computing are unparalleled. If deployed effectively, these services can free up the current resources, thereby allowing the institutes to scale themselves as per the demand. This means that they would only pay for the resources truly used.
Consequently, this would eliminate all the expenses of getting in-house hardware and software. Additionally, SaaS solutions allow for better security, control, and reliability.
To make the best use of cloud computing technology, institutions must hence create a cohesive usage of cloud services across every department.
Developing technology-enhanced post-pandemic vision proposition
While there were traces of remote learning before the pandemic, the process only got amplified once Covid-19 struck. Today, the institutes can reach out to their students who live in any region or country.
Hence, business leaders are ready to expand this opportunity further and allow for a higher level of access to the students. In fact, it's about time we leveraged technology to help realize the inspiration ambitions of students quickly and inexpensively.
Moreover, the aim is not only to offer equitable access to devices and connectivity to the students but also to create a conducive learning space!
Adopting a blended campus system
The suddenness of the pandemic had indeed left the educational institutes and all its staff recuperating from the consequences. But, now the reopening of university doors has allowed the business leaders to reimagine the campus structure.
More essentially, the question that arises is whether there is any need for a physical campus or not?
Many institutes have noticed a decline in student enrolment, which might become a steady trend, considering the ongoing pandemic and demographic changes. Living on campus or commuting daily no more fits the bill for most learners as they struggle to balance family and career commitments.
Administratively speaking, institutional staff has also gained massive productivity in the hybrid model.
Thus, it makes complete sense to redesign the concept of campus to aid a hybrid learning system, mitigate space crunches, and lower campus costs.
Student-centric technology systems
The pandemic made it painfully clear that most educational universities are unprepared to offer digital connectivity to their students, especially in rural and indigenous communities.
In fact, digital inaccessibility is not even about the excellent connectivity level as much as it is about accessibility in itself. Hence, it's a genuine requirement for leaders to invest in the equitable access to software, tools, and devices required by each student.
When students enroll in a higher education institute, they expect digital sophistication in their learning modes and methods. For most millennial and Gen Z learners, the digital medium is their home– a default way of carrying out interactions.
To match up to this student demographic, it becomes an inherent requirement to ensure that there exists a technologically-equipped faculty. However, it requires a lot of encouragement and helps to reach the state of digital fluency.
As such, business leaders must now invest in excellent instructional design support and faculty training. Additionally, the staff must be encouraged to experiment with innovative digital teaching technologies.
As the demographic of students changes, the face of higher education also witnesses subtle conversions. The disastrous pandemic roughly pushed this change in the business model a few steps further.
The higher education business model awaits thoughtful deliberation and investments of business leaders to change the way it functions. These areas expand from the need to create personalized educational content to the use of SaaS technology and the honing of digital faculty.
With the right areas getting explored and invested in, it would be no surprise to see the renovated higher education landscape soon!