Speeding Up on Curves

Brad Wheeler, Ph.D.

Indiana University Vice President for IT & CIOProfessor of Information Systems, IU Kelley School of Business

Thank You

There is Nothing New Under the Sun

http://www.bubblews.com/news/302536-sun-facts

For Information Technology…

Ecclesiastes 1:9 What has been will be again, what has been done will be done again;

there is nothing new under the sun.

Curves are Interesting

Not Like Predictable Linear Lines

Time

XY

March tothe NortheastCorner

Time

X

X

Y

Y

Over time• More is known• Less uncertainty• Less opportunity

Oct 31st, 2007 = $247 November 17th, 2008 = $53

X

Y

Y

2008

2008 20132002

X

YY

YX

X

X= Invested $5BY= Profited $2.1B

As the Australian iron ore magnate Lang Hancock (1909-1992) remarked in similar circumstances, "Always do the opposite to what the mob is doing. Works every time.” (oral history)

“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their

participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.”

Warren Buffett, Chairman’s Letter, 2004

http://www.wanowandthen.com/Langley-Hancock.html http://en.wikipedia.org/wiki/File:Warren_Buffett_KU_Visit.jpg

Industrial Heroes Who Think Differently

Thought Differently

Redefined and Saved a Company

Defined anIndustry

Oracleof Omaha

Foresaw and Shaped the Curves

Jobs Bezos Gerstner Buffett

What are the Relevant Curves?

For Higher Education…

What are the Smart Bets? Why?

At Least Three Curves

1. Public to Private Good …(price/cost pressures)

2. Digital Favors Scale …(rise of substitutes?)

3. Campus CIO Influence …(who’s driving?)

1. Funding for Public Education

(Higher Education in Increasingly a Private Good)

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY1315%

20%

25%

30%

35%

40%

28% 27%25%

24% 24%23%

22%23% 22%

20% 19%18% 18%

21%

23%25%

26%27%

28% 28%

31%33% 33% 33%

35% 35%

State Appropriation and Net Student Fees as a Percent of Total Revenue

State Operating Appropriation Net Student Fees

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20122013

$300,000,000

$350,000,000

$400,000,000

$450,000,000

$500,000,000

$550,000,000

$600,000,000

$650,000,000

$700,000,000

Operating Appropriation Increased at Inflation Rate (1990 Dollars)

Actual State Operating Appropriation State Operating Appropriation increased at CPIState Operating Appropriation increased at HEPI

CPI

HEPI

Actual

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 $5,000

$5,200

$5,400

$5,600

$5,800

$6,000

$6,200

$6,400

$6,600

State Operating Appropriation per Student FTE

Conclusion: Colleges and Universities Must Substantially Change our Cost Structure

Minimal goal: Can We Reallocate at least 20% of the cost of Administrative Services

to the Mission by 2020?

20% by 2020?50%?

2. Digital Goes to Scale

What is our Path to Scale? (Particularly for Online Learning)

Digital Economies of Scale

Analytics (Improvement)

Analytics (Triggers Improvement)

Behavior

Content – Distribution – Analytics

What role for universities?

Content

Textbooks, Simulations, Media, etc.

Distribution

MOOCs, Courses, Lessons, Degrees, Badges, etc.

MarketsStudents with Many Choices

?

Bundles

Is This Time Different?

Online Learning

• Substitutes for colleges/universities?• Complements for colleges/universities?

Four Revenue Models

1. Residential Education (flipped classroom)2. Online Courses / Degrees3. Massive Online Courses (MOCs)4. Massive Open Online Courses (MOOCs)Free

$

$$

$$$

Which are complements? Substitutes?

So…What to Do?

1. Independence2. Dependence3. Interdependence

3 Generic Campus Strategies for Curve Coping …Shaping?

Campus Independence as a Strategy

Campus Dependence as a Strategy

Lessons…?

Campus Interdependence as Strategy

Lessons…?

Personal Insights from Three Strategies

Involving Others

A Tale of Dependence and Interdependence

(Personal Insights)

Aspiration

Conflict

Authority

Ownership

Authority

Ownership

Influence

Achieve!

Repeat?

Marketplace of ideas for Intentionally Interdependent Communities, but they need a strong Architecture to help

resolve inevitable Conflicts.

Marketecture of Community

Marketecture Matrix

Each University

SoloContracts

Open Source Software

CooperativeCommunities

Buying Clubs

Internet2 Net+

CollaborativeCommunities

HathiTrust or Kuali

Influ

ence

Low

erH

ighe

r

AuthorityLower Higher

Marketplace(Use)

Community(Own)

Wheeler & Hilton, EDUCAUSE Review, Nov/Dec 2012.

(Examples from University Communities)

Contracts Cooperative

Clubs Collaborative

Influ

ence

Authority

Wheeler & Hilton, EDUCAUSE Review, Nov/Dec 2012.

3. Influence of Campus IT Leadership(I am VERY Worried)

Review: Speeding Up on Curves

Curves• Price and Cost Pressure?• Path to Digital Scale?• Campus CIO Influence?

Generic Strategies• Independence• Dependence• Interdependence*

* Lessons in the Marketecture of Community

Curves are Interesting

Higher Ed Heros Who Think Differently?

? ? ? ?Thought

DifferentlyRedefined and Saved a College

Defined anIndustry

Oracleof Education

Who will Foresee and Shaped the Curves

Speeding Up on Curves

Brad Wheeler, Ph.D.

Indiana University Vice President for IT & CIOProfessor of Information Systems, IU Kelley School of Business