Digital Transformation in Higher Education

calendar iconMay 27, 2022

We are living in a highly volatile time in history where technological changes occur at increasing speeds, and everything has some aspect of “digital” to it; higher education is not immune to these changes. Higher education institutions face a changing and increasingly competitive landscape, one that was perhaps prematurely sculpted by COVID-19. Regardless of the causes, higher education institutions face a myriad of challenges, many of which are key drivers for digital transformation.

Shifts in the market caused by external market conditions

For many institutions, COVID caused a precipitous drop in enrollments. Undergraduate enrollments between fall seasons of 2019 and 2021 decreased an average of 8%, with freshman enrollments dropping 13.1%.1 The larger than average freshman enrollment drop is worth watching as it could be a leading indicator of larger issues to come. At the same time as undergraduate enrollments are dropping, graduate enrollments increased by 2%. These changes bring obvious revenue pressures as well as staffing pressures as programs balance course loads and the need to account for increased graduate and decreased undergraduate instruction.

Some of the decrease in enrollment is due to a drop in international enrollments. Increased competition from overseas institutions, coupled with travel restrictions from COVID, have put a strain on enrollments by international students. Traditionally, the international student demographic requires very little discounting and brings in high levels of tuition revenue. So, a loss in international students adds to concerns about revenue and net-tuition rates for many institutions. Furthermore, outside of competition with offshore universities, there is increasing competition for the domestic student. Many institutions are offering the same types of programs and differentiation between institutions is becoming harder and harder for the consumer. This places significant economic pressure on small and medium sized institutions, particularly those with little to no endowment funds to help attract students.

Changing customer needs

Students and families are starting to question the value of higher education and how it prepares the student for success in the job market. While this questioning of higher education’s value may be misplaced, it is a perception of many potential students and their families, and perception is reality. This perception, along with affordability concerns, is a major factor in enrollment struggles for some institutions. The result is flattening revenues and, to attract students, institutions are increasing discounting. This strategy results in a decrease in net tuition rate, putting pressures on revenues, as well as increased endowment spending if that is a primary source of financial aid.

Non-traditional customers entering the market

Enablement of minority and non-traditional student populations means the “straight out of high school” student is becoming a thing of the past. People are also doing more lifelong learning through non-traditional educational pathways. This demographic change brings with it a need to recognize possible changes to the higher education operating model. Does an older, often part-time, student demographic require a different way to consume educational content? Do institutions need to offer less traditional lecture times (and delivery methods) to accommodate the needs of this changing demographic? How do these changing demographics impact the revenue projections for an institution? Retention also becomes more problematic with a non-traditional student population. When a student is pursuing shorter-term certificates or professional certifications there is a much greater chance of the student taking gaps between instructional periods or switching institutions.

New technologies in the market

New technologies are emerging daily, and higher education can take advantage of many of these innovative offerings. Many colleges were forced to embrace new instructional technologies due to COVID and its remote learning requirements. However, new technologies are coming to market to address all aspects of institutional life, including student experience, research, finance, and other administrative needs.

Aside from new technologies and platforms to address aspects of institutional life, there are tremendous advances in technology to assist with integration of existing systems and platforms. Technologies like Alteryx can help institutions collate and organize their data, link disparate data sets, automate analytics processes and cultivate a data-savvy workforce. Advances in automation technologies make it possible for institutions to automate many labor intensive, manual processes and operations – freeing up the workforce to focus on more value-added activities.

Additionally, in this new digital world, having sound security and privacy governance structures in place is an essential requirement. New technologies make it harder to secure sensitive data and preventing data breaches is an ongoing and evolving battle.

An uncertain regulatory environment

The complexity and diversity of functions at a typical higher education institution means that it is impacted by a myriad number of regulatory requirements. These requirements impact just about every aspect of institutional life, including (but not limited to) academics, accreditation, finance and accounting, grants management, contracting and procurement, intellectual property rights, healthcare and insurance, diversity and inclusion, affirmative action, privacy and information security, export controls, immigration, and climate related issues. With an increased focus on ESG (environmental, social, and governance) issues there is significant uncertainty in the areas of environmental management and reporting as well as diversity and inclusion.

In addition, for publicly funded institutions there is uncertainty in the level of state appropriations. While state appropriations for higher education institutions have generally recovered since 2008, there is still significant variation in the levels of funding from state to state and from year to year. This volatility in state appropriations creates fiscal uncertainty. It also means that many institutions need to increase tuition levels which can further impact student enrollment and retention.

In a rapidly evolving digital world, institutions seek to better manage changing stakeholder needs, grow revenues to allow for sustainable mission investment, control costs, and optimize performance, while ensuring that they successfully address privacy, security, and risk. Navigating the myriad changes necessary to overcome challenges and transform in a digital world requires a well planned and executed strategy to achieve the desired outcomes. With so much happening it is difficult to know where to start and what to focus on.

So, where should an institution focus? This is a good question, and the answer is to focus on where you want (or need) to be, not on where you are. A good quarterback focuses on where the receiver is going to be and then throws the ball there, not to where the receiver is currently, and a good hockey player skates to where the puck is going to be, not to where it is right now. Similarly, a successful organization focuses and plans for what is going to happen, not necessarily for what is happening right now. This is how to survive a highly volatile, competitive market and a changing digital landscape.

Digital transformation is the business equivalent of skating to the puck. It is about positioning an institution for growth by optimizing all facets of an institution’s operations while leveraging technology and data as a core competitive advantage.

Leadership must recognize that digital transformation requires different skills, capabilities, and expertise, from running “business as usual,” and it is key that they identify the right partner and team to drive the transformation. Business transformation can often be a complex, messy, and iterative process and each organization’s journey is unique; there is no “one size fits all.” The benefits of the transformation could take a long time, during which the leadership team may face resistance from naysayers. Institutions that have successfully undergone digital transformation find that partnering with a third-party provider increases success. It assists with bridging internal culture, skill, technology, and data gaps that become stumbling blocks to digital adoption and helps secure organizational buy-in and ownership of the transformation journey. Your journey will be unique, and Cherry Bekaert’s higher education team has the expertise to guide you forward.

Additional resources to help you start your digital transformation journey:

Brochure: Digital Transformation Services: Business Transformation Assessment & Roadmap
Article: Digital Transformation Drives Resiliency and Growth
Webinar Recording: Digital Transformation for Growth: 5R Process


Anthony Pember – Director, Digital Advisory,
Robert (Bob) Misch – Principal, Digital Advisory,

1National Student Clearinghouse Research Center