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The business of higher education in Ireland Forward thinking
March 2011
The National Strategy for Higher EducationThe National Strategy for Higher Education to 2030 (“the Hunt Report”) published in January 2011 makes recommendations for the future development of the higher education sector in Ireland. It is clear from the Hunt Report that the strategy group consider higher education key to building an economic recovery platform through delivery of “personal, social and economic capital”.
Focusing on the three words: “personal”, “social” and “economic” it is evident that higher education has a demanding and challenging remit if it is to deliver effectively and satisfy its stakeholders. There is a particular challenge in reconciling the “personal” and “social” remit of higher education with the “economic” demands and sustainability requirements of higher education.
Multiple ObjectivesThe challenge of achieving multiple, and sometimes competing objectives is visible in the Hunt Report recommendations:
Summary Objective (Personal/Social)
Summary Objective (Economic)
1 Widen access to higher education
Broaden the funding base for higher education through student financingConsolidate smaller institutions
2 Provide a high quality learning environment with state-of-the-art learning resources
Reduce reliance on the exchequer
3 Research should inform teaching
Commercialisation of research
Funding versus QualityRecommendations related to sustainable and equitable funding have received much focus. The Hunt Report indicates a requirement to reduce the strong relative reliance on exchequer funding while at the same time improving the relevance and quality of education and research.
Diagram 1.1 Generic business model
Regional National
International
European CreditsHours
Funding ModelMarket Demand
Chalk & Talk Distance
Blended learningE-Learning
GovernmentIndividualsIndustryAgencies
Engagement with wider
society
University, InstitutePrivate
International Others
ExperienceRetention
Completion
Direct Costs & Overheads
Infrastructure & Staff
MarketsUnits of
Sale
Costs
Multiple Providers
Price
Mode of deliveryStake-
holders
Customer Satisfaction
Customers
MarketsUnits of
Sale
Costs
Multiple Providers
Price
Mode of deliveryStake-
holders
Customer Satisfaction
Customers
Niche Products/By Products
Academic Quality
Collaboration/Alliances
Core Products
Governance Governance
Quality
Diversity
Collaboration
Undergraduate/Postgraduate
(incl. Research)
Logistics
Logistics
In summary, according to Hunt our higher education sector needs to become more self sufficient, while maintaining and building its quality framework in academia and research. A key concern in relation to this is that some might consider the two issues to be mutually exclusive. If the higher education sector follows a more traditional business model, then can it serve the needs of the many stakeholders which rely on it including individuals and society as a whole?
Focus on the ProductExperience in other sectors would suggest that an entity that focuses on product and product quality will serve the requirements of multiple stakeholders and will naturally succeed in a competitive and dynamic environment. A generic model encompassing critical success factors, key stakeholders and other considerations can be depicted as follows:
Brand & Reputation
The question is if the same model, success factors and considerations can be applied to higher education.
The Hunt Report conveys a message of future sustainability through efficiency optimisation and opportunity realisation. The common denominator in this message is the product -• Efficiency through managing product costs• Opportunity realisation through: - collaboration to leverage products - diversity for development of niche products - greater accessibility by increasing modes of
delivery - appealing to regional, national and international
markets• Sustainability through re-enforcing product
quality and creating demand for a product that customers are willing to pay for.
A Model for Higher Education?Therefore it is feasible to present a model for higher education which centres on the product and indeed the quality of that product. Such a model provides a perspective of the higher education sector which might be able to reconcile the challenges that face a “business” which has personal, social and economic obligations to fulfil.
The model does not introduce any new stakeholders, structures or processes, however it emphasises the central role that the product plays in higher education. With a renewed focus on what higher education institutions are delivering and on the relevance and quality of their products, higher education is well placed to meet the requirements of individuals, society and the wider economy while at the same time building a sustainable business which is less reliant on exchequer funding due to product demand both domestically and internationally.
The Road AheadThe next government will have to consider the recommendations in the Hunt Report and will need to decide what actions to take and in what sequence. Change would appear inevitable in the context of ongoing exchequer funding but it will be the manner in which educational institutions deal with these changes and the many competing demands of the sector that will determine their future sustainability.
Diagram 1.2 Higher education possible business model
Regional National
International
European CreditsHours
Funding ModelMarket Demand
Chalk & Talk Distance
Blended learningE-Learning
GovernmentIndividualsIndustryAgencies
Engagement with wider
society
University, InstitutePrivate
International Others
ExperienceRetention
Completion
Direct Costs & Overheads
Infrastructure & Staff
MarketsUnits of
Sale
Costs
Multiple Providers
Price
Mode of deliveryStake-
holders
Customer Satisfaction
Customers
MarketsUnits of
Sale
Costs
Multiple Providers
Price
Mode of deliveryStake-
holders
Customer Satisfaction
Customers
Niche Products/By Products
Academic Quality
Collaboration/Alliances
Core Products
Governance Governance
Quality
Diversity
Collaboration
Undergraduate/Postgraduate
(incl. Research)
Logistics
Logistics
Brand & Reputation
Contacts
Gerard LyonsAudit and ERS PartnerT: +353 61 435501E: [email protected]
Gerry FitzpatrickAudit and ERS PartnerT: +353 1 417 2645E: [email protected]
Shane MohanConsulting PartnerT: +353 1 417 2543E: [email protected]
Aidan Fagan Tax PartnerT: +353 1 417 2467E: [email protected]
Eileen Healy ERS DirectorT: +353 21 490 7074E: [email protected]
Paula O’ConnorERS ManagerT: +353 61 435523E: [email protected]
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