schools after tomorrow emerging business models
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SCHOOLS AFTER TOMORROWEMERGING BUSINESS MODELS OF TRAINING & INSTRUCTION SERVICE PROVIDERS
Image courtesy of Image courtesy of (interfaithharmony.wordpress.com)
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58 SLIDES: @12 MINUTES RUNNING TIME
Jaime Alfredo Cabrera
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Emerging Business Models• Streamlined Status Quo• Niche Dominators• TransformersEmerging Strategies• Academic Quality &
Excellence• Commercial Skills• Change Management• Speed to Market• Funding Relationships
Emerging Challenges• Roles• Scenarios• Regulations• New Entrants• Products & ServicesPast Lessons for Futures• Lessons from Trailblazers• Hindsights• Foresights• Your New University
Business Model
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The world is changing.
Image courtesy of www.digital-photo-secrets.com
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What’s your new school business model?
Image courtesy of www.digital-photo-secrets.com
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EMERGING BUSINESS MODELSINSTRUCTION & TRAINING INDUSTRY
Image courtesy of Image courtesy of zulqarnaingroup.com
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“We’re not businesses… but we need to be run in a business-like way”
- University Vice-President
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EMERGIN
G BUSIN
ESS MO
DELS
Given the forces of changes affecting higher education today, school business models can transform into:
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EMERGIN
G BUSIN
ESS MO
DELS
• Streamlined Status Quo• Niche Dominators• Transformers
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
Some schools will continue as teaching, training and research institutions but will progressively transform the way they administer & deliver services.
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STREAMLIN
ED STATUS Q
UO
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• still serves a broad mix of student segments• still offers a broad range of
disciplines but • discontinues a number of
unprofitable disciplines
In this model, the school:1
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STREAMLIN
ED STATUS Q
UO
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• to achieve scale• to provide resources for
maintaining international competitiveness in other disciplines
In this model, the school merges disciplines with another institution:
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STREAMLIN
ED STATUS Q
UO
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• digital channels •multimedia channels•multidelivery channels• blended models
In this model, the school invests heavily in production, sales & delivery channels:
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STREAMLIN
ED STATUS Q
UO
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• with public & private higher education providers, secondary schools, industry partners, etc.• to open new markets or more
efficiently access & serve existing markets
In this model, the school forms sales & delivery partnerships:
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STREAMLIN
ED STATUS Q
UO
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• to realise lower operating costs, and/or • to drive efficiencies through
shared services arrangements with like-minded institutions
In this model, the school outsources some back-office functions:
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STREAMLIN
ED STATUS Q
UO
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• have ample scope to streamline their business & operations• have much higher support staff
to academic staff ratios than other knowledge-based industries • have some assets that are used
for less 100 days per year
A study reveals that most schools:1
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STREAMLIN
ED STATUS Q
UO
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• reshape & refine their range of services & markets• target particular ‘customer’
segments• use tailored education, research
& related services
Some schools will: 1
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NICHE DO
MIN
ATORS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• such as mature age distance learning students, international mass market, industry professionals
• to enable the targeted development of course offerings, sales channels, delivery & related services
In this model, the school focuses on particular customer segments:
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NICHE DO
MIN
ATORS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
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• significantly reduces its range of education disciplines• so as to focus on areas of
genuine domestic & global strength & credibility
In this model, the school:
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NICHE DO
MIN
ATORS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
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• streamlines its back office by using outsourcing and/or shared services models• to drive efficiency &
economies of scale
In this model, the school:
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NICHE DO
MIN
ATORS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
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The niche dominator model will be driven to maintain a competitive position:
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NICHE DO
MIN
ATORS
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• in domestic & international markets • across a broad range of
disciplines & segments
Private providers & new entrants will create market positions using:• niche dominator models• buildings & facilities designed for
specific purposes, and• segment-focused businesses without the constraints of legacy
assets & workforce structures
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NICHE DO
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ATORS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• to create new market spaces that merge parts of the education sector with other sectors• to include media, technology,
innovation, venture capital• to create new markets, new
segments & new sources of economic value
Some schools will carve out new positions in the traditional sector:
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TRANSFO
RMERS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• content wholesalers • content consumers • financiers, employers, sponsors,
paying parents• non-users• underserved or previously ignored
markets
In this model, innovators will redefine the education customer to include:
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TRANSFO
RMERS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• content aggregation• mass distribution• assessment• auditing• certification
Innovators will disaggregate the value chain to create new areas of specialisation such as:
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TRANSFO
RMERS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• media • entertainment• financial services & • venture capital
In this model, innovators will combine traditional education services with related industry services such as:
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TRANSFO
RMERS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• predominantly digital sales models• delivery models that combine
digital services & sourced specialist face-to- face services
In this model, innovators will build:
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TRANSFO
RMERS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• outsource learning products, assessment, testing & student support services • retain ownership of their
customer relationships• use cloud-based customer
relationship management tools & techniques
In this model, innovators will:16
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TRANSFO
RMERS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
In this model, innovators will outsource their full suite of back-office functions, including:• student advising• student tutorials• learning
assessments• student grading• learning materials
development
• learning services development• marketing &
promotion• auditing• accounting• support services
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RMERS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
In this model, innovators will be led by private providers & new entrants, not incumbent public schools.• This level of ‘disruption’ is hard to lead
from the inside. • However, savvy public institutions will seek
opportunities to create value in this space in partnership with private providers & new entrants.
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RMERS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
• in crafting a deal that creates brand protection & a reasonable share of the created value • in using a consortium approach
(e.g., a prospective partner with the market weight of a global technology or media company)
Existing schools bring two critical assets to this model: credibility & academic capability
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TRANSFO
RMERS
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
TRANSFO
RMERS
• increased global reach of the core mission & brand• much needed incremental
revenue • support for internationally
competitive education & research programs
For schools that get this right, rewards are high:
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Image courtesy of Image courtesy of inhabitat.com
EMERGING STRAGEGIESINSTRUCTION & TRAINING INDUSTRY
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Regardless of their chosen business models, future schools will need to use five strategies to address emerging challenges.
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
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FIVE STRATEGIES31
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1. Quality & academic excellence
2. Academic talent & workforce structure
3. Commercial skills4. Change management & sp
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FIVE STRATEGY AREAS31
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ACADEMIC Q
UALITY & EXCELLEN
CEWhatever the target market & financial pressure, schools must maintain academic excellence & deliver quality output.
Quality may suffer in a competitive market but those that can’t maintain quality will eventually lose market share & relevance.
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ACADEMIC TALEN
T & W
ORKFO
RCEUniversities will need to attract new talent to replace an ageing workers & at the same time build a new workforce structure that can:• support new business models• deliver increased productivity, & • accommodate non-traditional operating models
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COM
MERCIAL SKILLS
As training & instruction service markets become increasingly competitive & consumer-driven, schools will deepen the commercial competencies of their faculty & staff.
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MERCIAL SKILLS
This will be needed to secure market share in various markets and enable schools to cut the right deals with private providers & new entrants.
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CHANGE M
ANAGEM
ENT
New school models will require significant change; leaders will need to find ways to • stay true to a mission or vision•maintain academic integrity &
independence and• change business & operating
models
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SPEED TO M
ARKETAs local & foreign markets increase competition, schools will need to be first to market with:• new learning products• new teaching services• new assessment methods• new research programs • innovative student experiences
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FUN
DING RELATIO
NSHIPS
The next years will see increasingly fiscally constrained governments & sponsors, regardless of political persuasion.Funding for schools will likely decline.
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FUN
DING RELATIO
NSHIPS
Universities will need to search for ways to move beyond the ‘fight for funds’ relationship. For example, schools might be in joint initiatives that build a national base for a globally competitive knowledge economy.
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Image courtesy of Image courtesy of inhabitat.com
EMERGING CHALLENGESINSTRUCTION & TRAINING INDUSTRY
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“Ambitious players will need to move fast to
establish new models & secure partnerships
with leading incumbents.”
- Anonymous
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EMERGIN
G STRATEGIES
Universities are critical to a nation’s future. In planning a school for the future, five elements must be addressed.
Adapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
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EMERGIN
G STRATEGIES
Roles of schools in a country’s future
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Image courtesy of Image courtesy of angeladavidsphotography.wordpress.comAdapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
Scenario modeling that anticipate emerging futures
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Image courtesy of Image courtesy of angeladavidsphotography.wordpress.comAdapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
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Regulation & choices in learning assessment and accreditation
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Roles of private sectors & new entrants to the industry
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Image courtesy of Image courtesy of angeladavidsphotography.wordpress.comAdapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
Flexibility in pricing & delivery of products & services
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Image courtesy of Image courtesy of angeladavidsphotography.wordpress.comAdapted from http://www.ey.com/AU/en/Industries/Government---Public-Sector/UOF_Future-challenges-for-schools
Image courtesy of Image courtesy of angeladavidsphotography.wordpress.com
PAST LESSONS for FUTURESINSTRUCTION & TRAINING INDUSTRY
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• A single-revenue strategy is a danger.• A local-market strategy is a risk.• The MOOCs model isn’t working.• Traditional processes & standards can
hurt an innovative business.• Slow governments will hurt
a fast business.• Staff & user involvement and commit
ment can increase & protect your business.
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PAST LESSON
S for FUTU
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A single-revenue strategy can endanger a business.
• In highly competitive markets driven by disruptive innovations, your products & services are constantly threatened by more agile competitors.
• What strategies can put you ahead of the competition as well as increase your revenues?
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FORESIGHTS
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A local-market strategy can put a business at risk.
• Global forces can affect local markets & revenues in unforeseen ways.
• Aside from exclusive schools, education is not recession-proof.
What strategies can you use to reach & capture non-local markets for your products & services?
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FORESIGHTS
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The MOOCs model isn’t working.• Massive online courses can
tremendously increase enrolment, but completion rates are very poor.
• Student profile and context can affect completion rates.
• What strategies can you use to increase the completion rate of e-learning?
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HINDSIGHTS
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Traditional learning products & services can hurt the business:• Teachers not trained to teach in ways
young students learn today• Learning materials not designed for
ways young students learn today• Assessment methods not designed for
ways that young students produce output today
What strategies can you use to bridge these gaps?
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HINDSIGHTS
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Slow governments will hurt the business.• Governments are slow to grant full
accreditation to non-traditional learning models• Users are hesitant to invest time or
money in unaccredited learningWhat strategy can you use to speed up
government accreditation for alternative training, instruction, & learning models that you will use?
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A highly committed faculty, staff & alumni can increase & protect your competitive advantages.
• In an increasingly unstable & competitive industry, you need all the help you can get.
What strategy can you use to create & sustain an involved & committed faculty, staff, alumni and users?
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HINDSIGHTS
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So... what’s your new school business model?
Image courtesy of www.digital-photo-secrets.com
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I can help.
mr.jaime.aiu@gmaiil.com
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SCHOOLS AFTER TOMORROWEMERGING BUSINESS MODELS OF TRAINING & INSTRUCTION SERVICE PROVIDERS
Image courtesy of Image courtesy of (interfaithharmony.wordpress.com)For details, contact mr.jaime.aiu@gmail.com
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Jaime Alfredo Cabrera
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END OF PRESENTATION. THANK YOU.
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