Why can’t universities become tech companies? An investment opportunity

 If you follow business headlines, you probably heard that Walmart has turned into a tech company, and Tesla is not a car manufacturing firm, but really a tech company. Uber and Air B-n-B are not taxi and hotel companies; they are IT giants. Apparently, if you really want to take advantage of the IT revolution, you have to invest massively, and reinvent your entire business process while you are at it. This is a dramatic departure from a technology-assisted company that does what it always have done, just with assistance of some databases, and a few web pages. Walmart has created a super-efficient supply chain, buying in bulk directly from producers and eliminating the middlemen. They know where every jug of milk is going and when it is needed. By competing with Amazon, they applied the technology to their core retail business. This is a shift from the tech-assisted to the tech-based business model.

Universities are stuck uncomfortably at the tech-assisted level, and are unlikely to move up to the next level. They all use one of the integrated data management platforms. Those allow to handle student records, scheduling, HR, payroll, and other functions. Universities also purchase a lot – I mean – a whole big lot – of supplemental software. I have a folder in my Chrome bookmarks called “Work Accounts,” with 15 account links – anything from LMS to survey software to SharePoint, Adobe Sign, OnBase, the Course Leaf, etc. All of these platforms talk to the core platform with a different degree of success, or not at all. Our university is relatively advanced, and we still have dozens and dozens of very low-level manual or primitive technologies, like sending Excel spreadsheets to collect data, with someone copying and pasting the cells. A significant part of administrative and staff workload is basically, closing technological holes. Many people make sure an error that crept up in on database is not crawling into another. More people than we care to admit manually read data from one screen, and input it into another. The pandemic actually helped us to close some of these holes, because of the telecommuting. But it also made the rest of them more visible. For example, we cannot figure out a reliable faculty directory, for many years now. We still struggle with basic student forms.

We are stuck in this semi-technological limbo mainly because none of the universities has the size and the resources that would allow for a radical revision of its processes. In theory, every student could get exactly the class she or he needs when they need it, and all classes would be full, and campus space would be utilized at 90%. We could have a national database of qualified and vetted adjuncts, available to teach online and f2f. We could provide courses to the neighboring campuses if there is space in classes, seamlessly enroll guest students, provide intelligent fail-safe academic planning and degree audit, etc. That is what information technologies do every day in other industries. But it does not make any economic sense to do this just for one campus. It would take many millions in investments and some of the brightest software engineers working closely with the academic types. Even large state systems like ours (CSU Fullerton is the second largest university in the US) are unlikely to find money for a serious IT investment, even if it promises cost reduction later. No one has deep pockets and this kind of a mandate from the public.

It would be reasonable to expect either Oracle or SunGard, the tech giants that support the higher ed, to develop a betterб  truly integrated and cloud-based product. For some reasons, they do not. In fact, their products (People Soft and Banner, respectively) have changed very little over the last two decades. They deal with clunky legacy systems, and the only way forward is to start from scratch. I am sure they run better and have more bells and whistles, but there was no major innovation to reshape universities’ business operations. It is probably because the higher ed market is too fragmented, and too conservative to change their habits and to develop a tech-based model.

If there is a venture capitalist with a bold vision, hear this. The industry is ripe for change. We are sick of this maze of platforms. We want simple and intuitive interface, flexibility, and reliable data. Develop the University.com platform that allows any campus to outsource most of its information-processing operations. We would be happy to focus on teaching and scholarship.