Article
Scale matters
Unlocking agility, innovation and cost efficiency
Jan. 9, 2025 · Authored by Daniel Greenstein
I promised solutions to help higher education navigate tremendous headwinds, so let’s get started. And why not start big with the advantages of scale?
Scale matters in higher education as it does in other industries. It matters a lot. By expanding their operating scale, universities and colleges (hereafter higher education institutions or HEIs) can:
- Improve student affordability, access, retention, and graduation rates
- Introduce agility in educational programming and innovation because faculty and staff have greater breadth and depth of expertise that can be assembled in new ways to address new and emerging needs and problems;
- Spin up intimate student learning opportunities and living experiences, mimicking and possibly improving upon distinctive educational experiences offered by small-scale liberal arts colleges;
- Collect and mine data to improve performance in everything from enrollment and graduation rates to efficient facilities and human resource management, alumni and donor giving; and
- Drive down unit costs of business and educational functions, investing savings in improving student access, affordability, and outcomes.
There is no single pathway to scale. Some are well-known; others are just now emerging.
Organic enrollment growth is the most well-known. Think of the tremendous growth from 1990-2010 at public institutions like UCLA and the University of Central Florida among others. It reflected demographic trends (the rapid expansion in the size of the college-ready, high-school-leaving population associated with the baby boomers and their children), relatively low prices, and, in many cases, locational advantages. Outside of a handful of states like Tennessee and Texas, where the high-school-leaving population continues to expand, the only reliable path to enrollment growth will require transformative change in education and business models.
Shared services took off in the 1990s by borrowing technology from the corporate sector that systematized routine business processes and enabled them to be offered once for multiple HEIs. By scaling back-office functions (e.g., payroll, HR, procurement, IT infrastructure and enterprise applications), shared services captured efficiencies and were typically found in “systems” – HEIs responsible to a single governing authority.
