BUS 9551 SFB
May 11, 2012
Improving Higher Education Cost Efficiency with Technology and Program Accountability Executive Summary:
In the last two decades college costs have risen by 429 percent, a rate higher than the increase rate for health care (Sheets, 2012). To encourage colleges to increase value and efficiency, the government is offering $55 million in grant money to colleges which can reduce costs for students (Cooper, 2012). In the past twenty years, cost reduction solutions have overlooked factors that have prevented colleges from taking full advantage of the possibility to reduce college costs while improving the college educational experience for students. The two most dominant factors are technology and program accountability (Miller, 2009). How can colleges today take these factors into consideration and sustainably reduce their costs? First, ABC Consulting guides academic institutions to reduce costs using technology. Historical research demonstrates the relevance of purchasing technology for restructuring higher education (Guskin, 1994). Today, cost reduction stems less from technological purchases and more from a combination of technological implementation and appropriate business models. ABC’s complete consulting package includes business models to harness technological innovation which results in scalability in higher education.ABC’s proven success in consulting allows colleges to leverage their information on a student in order to provide the best possible alternatives that will reduce unnecessary course load and educational costs. ABC serves as the mediator for outsourcing curriculum development. Through outsourcing partnerships, personalized programs can be met and customized to meet the needs of specific student segments best fitting learning styles and preferences. Focusing on customizing a specialized global curriculum for gateway courses and prerequisites, ABC consults in centralizing curriculum development. Costs are reduced with student assessment resources and smart learning ware to achieve new economies of scale. This process frees faculty from developing curriculum for gateway courses and prerequisites.
Second, ABC consults college leaders on actively examining academic programs that constitute a major portion of costs in order to develop a culture of program accountability. ABC consults colleges on the best cost efficient analytic tools for evaluating fund allocation and measuring outcomes. To avoid mission creep, in which resources and management are spread among too many programs (Miller, 2009), ABC systematically reviews all programs for direct and indirect costs allocated to each program and compares the the revenue derived from that program with other programs. Using non-profit models as a basis for analysis, ABC consults each college on maximizing its efficiency based on the institution’s core values. ABC then provides recommendations on each program. Finally, using agency theory, ABC addresses the tension between research and academic teaching to expose its effect on student enrollment and consults on leveraging faculty time to maximize efficiency. Back ground/Problems
Problems of Reducing Costs in Higher Education Using Traditional Approaches Rising prices in higher education is an issue of resource allocation in many instances and can be illustrated in the following diagram: Various attempts at reducing costs in higher education focus on areas, which will not prove to be sustainable. Many higher education institutions attempt to reduce costs by improving on infrastructure. Although infrastructure is significant, cost savings in the short run (5-10) years are not extensive because of the high initial costs incurred in improving the infrastructure. Short- term reductions must take place in the short term and must be sustainable. In addition, higher education institutions have creative solutions such as using the classrooms and...