New Zealand’s universities must develop longer term, pan-organisation strategies to draw a new roadmap for success, says KPMG.

In order to achieve this, KPMG is proposing a ‘Connected University’ concept  to prepare for what Justin Harness, transformation specialist and member of KPMG’s national education sector team calls “the new age of disruption”.

Facing ever increasing financial pressures, New Zealand universities are confronted with evolving stakeholder expectations and digital disruption, says KPMG.  With the needs of students, lecturers, non-academic staff, and alumni all vying to be addressed, ensuring ongoing relevance in this dynamic environment requires transformative thinking, and internal investment must be managed strategically.

KPMG points out that annual expenditure per student in New Zealand is currently less than the equivalent in Australia, the US and the UK.  The total government spend on tertiary education has remained relatively constant from 2004 to 2016, on a per EFTS (equivalent full time student) basis. Over the same period, government tuition funding has fallen from 39% to 32% of total income across the universities. Meanwhile, costs to universities have steadily increased, with the sum total annual expenditure of New Zealand’s eight universities jumping from $2.5m in 2006 to $3.6m in 2016.

To meet these costs, universities are diversifying their income streams.  Research income has increased from 15.1% to 22.9% from 2004 to 2016, and there is increasing reliance on international student tuition fees.  This results in additional considerations including pressures to increase standings in international rankings.

“The Connected University – a future university with seamless connections between its technology systems and administrative units, and with strong relationships between students, industry and other stakeholders – will be prepared for the new age of disruption,” says Harness.

To achieve the Connected University concept, KPMG says universities need to consider  implementing targeted initiatives to improve operational efficiency and develop alternative revenue streams to support growth;   adopting organisation-wide strategies for the Connected University to design and establish dynamic transformation capabilities; and  collaboratively addressing sector wide challenges such as funding and international strategies.

However, Universities New Zealand Chief Executive Chris Whelan says New Zealand universities already have an extensive set of links to students, industry and other stakeholders.

“Despite presenting an image of tradition and permanence, New Zealand’s universities are going through near-continuous change in response to the evolving demands of their communities, funders, students and the employers of their graduates.”

“The financial challenges to New Zealand’s university sector are real, but KPMG implies the sector is not already collaborating to address them. Actually, there is a huge amount of knowledge-sharing and collaboration going on and this has already helped the sector cope to some extent with the long-term drop in real funding levels.

Whelan says reports from consulting firms with the message ‘everything is about to change’ are common.

“We don’t agree that a buzzword-heavy solution based on creating “Connected Universities” with “dynamic transformation capabilities” are some sort of magic bullet that will solve anything – other than more work for the consultants.”

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