Schools after tomorrow emerging business models

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
v2

MAIN MENU
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Emerging Business Models
• Streamlined Status Quo
• Niche Dominators
• Transformers
Emerging Strategies
• Academic Quality &
Excellence
• Commercial Skills
• Change Management
• Speed to Market
• Funding Relationships
Emerging Challenges
• Roles
• Scenarios
• Regulations
• New Entrants
• Products & Services
Past Lessons for Futures
• Lessons from Trailblazers
• Hindsights
• Foresights
• Your New University
Business Model

The
world is
changing.
Image courtesy of www.digital-photo-secrets.com
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What’s
your new
school
business
model?
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INSTRUCTION & 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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EMERGINGBUSINESSMODELS

Given the forces of changes
affecting higher education
today, school business
models can transform into:
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EMERGINGBUSINESSMODELS
• 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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STREAMLINEDSTATUSQUO

• 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:
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• 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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• digital channels
• multimedia channels
• multidelivery channels
• blended models
invests heavily in production,
sales & delivery channels:
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• 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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• to realise lower operating
costs, and/or
• to drive efficiencies through
shared services arrangements
with like-minded institutions
outsources some back-office
functions:
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• 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:
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• reshape & refine their range of
services & markets
• target particular ‘customer’
segments
• use tailored education, research
& related services
Some schools will:
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NICHEDOMINATORS

• 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
focuses on particular customer
segments:
NICHEDOMINATORS
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• significantly reduces its
range of education
disciplines
• so as to focus on areas of
genuine domestic & global
strength & credibility
NICHEDOMINATORS
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• streamlines its back office
by using outsourcing and/or
shared services models
• to drive efficiency &
economies of scale
NICHEDOMINATORS
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The niche dominator model
will be driven to maintain a
competitive position:
NICHEDOMINATORS
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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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NICHEDOMINATORS

• 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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TRANSFORMERS

• 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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TRANSFORMERS

• 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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TRANSFORMERS

• media
• entertainment
• financial services &
• venture capital
combine traditional education
services with related industry
services such as:
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TRANSFORMERS

• predominantly digital sales
models
• delivery models that
combine digital services &
sourced specialist face-to-
face services
build:
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TRANSFORMERS

• 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:
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TRANSFORMERS

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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TRANSFORMERS

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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TRANSFORMERS

• 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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TRANSFORMERS

TRANSFORMERS
• 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
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Regardless of their
chosen business
models, future schools
will need to use five
strategies to address
emerging challenges.
FIVESTRATEGIES
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1. Quality & academic
excellence
2. Academic talent &
workforce structure
3. Commercial skills
4. Change management &
speed to market
5. Relationship with
government
FIVESTRATEGYAREAS
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ACADEMICQUALITY&EXCELLENCE
Whatever 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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ACADEMICTALENT&WORKFORCE
Universities 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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COMMERCIALSKILLS
As training & instruction
service markets become
increasingly competitive &
consumer-driven, schools will
deepen the commercial
competencies of their faculty
& staff.
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COMMERCIALSKILLS
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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CHANGEMANAGEMENT
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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SPEEDTOMARKET
As 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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FUNDINGRELATIONSHIPS
The next years will see
increasingly fiscally
constrained governments &
sponsors, regardless of
political persuasion.
Funding for schools will likely
decline.
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FUNDINGRELATIONSHIPS
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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“Ambitious players will
need to move fast to
establish new models
& secure partnerships
with leading
incumbents.”
- Anonymous
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EMERGINGSTRATEGIES

Universities are critical
to a nation’s future.
In planning a school for
the future, five elements
must be addressed.
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EMERGINGSTRATEGIES

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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Regulation &
choices in
learning
assessment
and
accreditation
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Roles of
private
sectors &
new entrants
to the
industry
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Flexibility in
pricing &
delivery of
products &
services
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Image courtesy of Image courtesy of angeladavidsphotography.wordpress.com
PAST LESSONS for FUTURES
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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
commitment can increase & protect
your business.
PASTLESSONSforFUTURES
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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?
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?
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?
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?
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 learning
What strategy can you use to speed up
government accreditation for
alternative training, instruction, &
learning models that you will use?
HINDSIGHTS
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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?
HINDSIGHTS
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So... what’s
your new
school
business
model?
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I can help.
mr.jaime.aiu@gmaiil.com
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SCHOOLS AFTER
TOMORROW
EMERGING BUSINESS MODELS OF TRAINING
& INSTRUCTION SERVICE PROVIDERS
Image courtesy of Image courtesy of (interfaithharmony.wordpress.com)For details, contact mr.jaime.aiu@gmail.com
Jaime Alfredo Cabrera
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END OF PRESENTATION.
THANK YOU.

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