The COVID-19 pandemic created acute challenges for the tertiary education system in Australia. The impact felt by education and training providers, as well as students, was swift and severe. It has become clear that to survive in a rapidly evolving environment, reinvention and transformation is imperative.
In this article, BDO explores two of the major challenges the Australian tertiary education system currently faces, and how embarking on an organisational transformation journey can help take education providers into the future.
Drop in international student enrolments and loss of revenue
Following the implementation of travel restrictions and the closure of Australia’s borders, it came as no surprise that the number of international students arriving on Australian shores dramatically reduced – and the impact on the tertiary education system and the Australian economy was quickly felt.
Research has shown that, in terms of stated student preference, there has been a 15 per cent decline in Australia as a preferred destination from pre-pandemic figures, with more students choosing countries such as Canada or the UK.
In fact, the Australian Bureau of Statistics reports the number of student arrivals in September 2022 was 21.5 per cent lower than pre-COVID levels in September 2019, and there is no certainty of international student volumes returning to pre-COVID levels due to reputational damage incurred by our national response.
Of course, with the reduction in international student arrivals comes the loss of revenue for education and training providers.
In 2020, revenue from overseas student fees and investment income declined, with total sector revenue from overseas student fees decreasing by $755.8 million (7.6 per cent) and investment income decreasing by almost $1.2 billion (57.7 percent).
The loss of revenue from international students combined with reduced funding from the Federal Government – including grant and research funding - has seen many tertiary and vocational providers across the country suffer major budget constraints.
Now more than ever, it is critical that tertiary and vocational providers seek alternative and diversified revenue streams, maximising the utility of existing assets to maintain their financial viability.
For many university and tertiary providers, a shift in business model to capture and capitalise on these alternate revenue streams requires a fundamental shift in their current operating model.
Such large-scale transformations require significant cultural change, with a large focus on technology and the service delivery model to deliver on the needs of the customer whilst opening other parts of the enterprise to new revenue opportunities.
Low levels of student satisfaction
The challenges faced by tertiary and vocational education students during and following COVID-19 cannot be underestimated. Forced to quickly adjust to a rapid shift in the way they learn, the day-to-day experiences of students was, and continues to be, significantly impacted.
In addition, with online learning becoming the new norm, education institutions and students alike were also required to consider the effectiveness of their digital infrastructure. Students’ dissatisfaction with their experience is at an all-time high due to disconnection from their institution, which resulted from poor online learning delivery and digital platforms.
Unsurprisingly, as we continue our COVID-19 recovery, the demand by students for a flexible hybrid learning delivery model – akin to the workplace – is gaining traction. With the rise of digital learning, students now expect the option to embrace a blended way of learning both online and face-to-face.
A future-focused digital transformation of the service delivery capability must remain a priority for tertiary education providers to ensure not only that their student digital needs are met, but they are also setting their graduates up for success.
Organisational transformation the key to survival.
What does this look like?
Organisational transformation involves:
- A comprehensive understanding of the drivers for transformation
- A customer-centric approach to transformation
- Creating shifts in your organisation through culture.
There are many aspects to consider for organisational transformation in the tertiary education sector, including:
- Human-centric organisational factors including culture and engagement, as well as workforce capability and planning
- An operating model for the future
- Digital solutions for optimised learning delivery
Why is it important?
Effective and sustainable transformation cannot happen without culture. Your organisation’s operating model and structure, for example, are merely a way for your organisation to live your culture.
The tertiary education system’s most important asset is its people, which includes students, staff and academics. As such, stakeholder engagement, understanding the pain points and bringing your people along the transformation journey are critical success factors.
How a new operating model has taken a university into the future - A case study
The client - University of Newcastle
The University of Newcastle is a tertiary education institution ranked 197th in the world's universities, based in Newcastle, Australia. It is a global leader, with internationally recognised degree programs and is distinguished by a commitment to equity and excellence. As an innovative university, Its focus is driven by offering world-class and diverse research, and partnerships and collaboration.
The business challenge
To meet the changing demands of global education, the University of Newcastle’s IT Services (ITS) team needed to transition to a new and contemporary operating model - to more effectively align technology funding, people, processes, data, and ultimately realise the University’s strategic goals for the future. To that end, the CIO led the ITS team through a phased shift to its desired future-state.
Utilising the cross-service capabilities of both BDO’s Strategy and Transformation and People Advisory teams, BDO collaborated on a human-centric organisational transformation, and an operating model of the future.
To find out more about how BDO supported the University of Newcastle as they embarked on their transformation journey, read the full case study or watch our video case study.
To learn more about planning for achievable and sustainable growth in the education sector, or to discuss the right strategies for you, get in touch with your local strategy and transformation adviser.