University X decides to spend £20m to replace their existing student record system. Even before this work gets underway this university recognises that this seemingly simple upgrade has grown into a far greater challenge.

Suddenly the £20m spend becomes a full blown, £100m, multi-year, institution wide investment. Such a project almost inevitably involves a rolling cast of vendors, consultants, and project managers, as well as a small group of anxious senior administrators wondering if that original upgrade to the student records system will ever see the light of day. This is an all too familiar situation at many of our institutions but an explanation for why this is the case is often misunderstood.

As is the case with many types of IT investment, introducing a new student record system goes far beyond improving the ability of institutions to manage student data. It is deeply connected to their reporting and regulatory obligations, estate planning, and modelling future student growth. In other words, investing in one bit of IT infrastructure has far reaching consequences in a highly interdependent higher education ecosystem.

Consistent with worldwide IT spending figures, technology spend in UK higher education institutions is growing year on year, with this trend only set to continue in the coming decade. UCISA, the professional body for digital practitioners, estimates that UK institutions spent £1.3bn in technology infrastructure in the 2017/18 year and releases comprehensive data about the specific corporate information systems universities are investing in.

Practitioners working in this area assert that continued funding for technology reform is urgently needed to allow institutions to step into a digitally-led world. But there is also growing awareness of the inefficiencies involved in these large scale investments.

Where and why are universities spending?

Higher education institutions are spending across three sets of priorities.

Moving to the cloud. Increasingly universities are moving their entire IT systems and data warehouses off campus. Cloud computing – using a grid of servers to support virtualised infrastructure or applications – gives institutions the flexibility to respond quickly, deploy new tools, and scale up to meet demand. Cloud spending in the UK education sector is expected to increase from £74m in 2015/16 per annum to £126m in 2020/21. This is a heavily monopolised space with the vast majority of institutions using platforms housed by the Tribal Group, Ellucian, and drawing heavily on Microsoft software. These groups have a major stake in the sector as they not only shape how universities spend chunks of their money but also house large chunks of their data and intelligence. Cloud computing is not a one off capital expenditure – with institutions having to pay for 24 hour support for their various and increasingly complex business needs – but this should be offset in part by reduced spend on IT infrastructure onsite. Experts warn that not moving to cloud presents a serious business risk.

Security, students and support. With rising threats to privacy it ought to be no surprise that universities are spending money to ensure that their systems withstand external attacks. In addition to ramping up cyber security, universities are also wanting to leverage the capabilities afforded by intelligent data and learning analytics. The university learning experience is being reshaped daily by the growing focus on virtual learning environments, eBooks and artificial intelligence. Students expect a high quality digital experience when they undertake their studies and in how they interact with their institutions. Sector CTOs also point to the growing demand for complex IT infrastructure and systems to support the research ambitions of institutions.

Correcting old errors. The most vexed area of spend exists in the amount of money universities are spending to undo “legacy systems.” The legacy system is not one system. Rather, it is an amalgamation of many different tools and products introduced at various points in time which has led to a highly disjointed and fragmented ecosystem. The outcome of these legacy systems means that it can be hugely challenging to find a single source of truth in an institution – whether it be information about student data or space utilisation.

The sum picture of these investments is that higher education institutions find themselves playing catch-up to get their IT systems to the present day whilst simultaneously thinking about future innovations to be competitive.

The burden of technical debt

Investing in these priorities is also tied up with the issue of “technical debt” – a term used to show the ongoing impact of technology decisions taken in the past on the present. Generally, technical debt arises as a result of insufficient funding, capacity, and capability. Its consequences may not be felt immediately but accrues over many years in large sums of cost and complexity.

Institutions repeatedly tell stories that in the pursuit of a quick fix they invested heavily into a particular software, with little regard for what this meant for existing business processes in their institution. Another common scenario is when universities fail to consider whether a technological investment was creating the long-term improvements being sought in the service or function being delivered.

While there are no concrete figures publicly available to illustrate the burden of technical debt, experts suggest that this value is significant and that if the government was to take a closer look, they would have reason to be worried about the way some institutions spend their money. However it does explain in large part why so many IT programs run over time and over cost. One major technology consultancy working in UK higher education estimates that of the 50 major IT programs currently underway, 23 of these reforms are in “major distress” in relation to overspending and exceeding timeline delivery.

Building the technology estate

Being clear on strategy, thinking through the implications of new technology on culture, and resisting the pressure to immediately “shove” technology in response to a problem are some of the lessons offered up by CTOs and Heads of IT who are undertaking major programs of reform in their institutions.

But these individuals also all fervently argue that much more investment needs to take place in support of technological innovation, not less. Higher education institutions increasingly rely on technology to differentiate themselves from each other and to remain globally competitive.

But if the experiences of those we spoke to are anything to go by, then the sector must develop a more mature approach to its investment – moving away from a piecemeal attempt at change to considering technology in the entirety of its estate. Further, given the significant scale of financial and human investment required on these projects, the role of institution wide governance is critical and must be a constant focus of every leadership team in an institution. The clear view is that institutional spend in technology is as significant, if not more, as commissioning a new campus or developing a university wide research strategy.

With thanks to Drew Cook, University of Lincoln, Adrian Ellison, University of West London, Anna Mathews, UCISA, Teresa Finlayson, Monash University

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