New international research from management consultancy Nous Group has revealed that the role of the university Chief Operating Officer (COO) is undergoing dramatic change, which will be crucial in meeting global challenges faced by universities.
The research results point to the emergence of a new breed of university COOs who have evolved to become a true strategic partner to the university executive through data-led decision-making, which is driving the financial performance of institutions as they invest and adapt to the ‘post-pandemic’ world.
The findings come from the Nous Group University COO Survey and are based on the views of over 70 university operational leaders from Australia, Canada, New Zealand and the UK. The panel includes representatives of leading institutions from U15 Universities in Canada; Russell Group in the UK and Go8 Universities in Australia.
In the wake of the pandemic, the study revealed that data analytics will be the next big step in the operation of universities. Currently, just one-in-four (25 per cent) of COOs view evidence-based decision-making as a high priority, but almost double the amount (42 per cent) expect it to become a top priority in the next three to five years. This was the biggest switch when COOs were asked about their priorities now and in the future.
Zac Ashkanasy, Nous Group Global Head of Higher Education, explained: “Universities that invest in data analytics are experiencing a step-change in the speed and confidence of their strategic decision-making. The challenge for COOs is to establish good data governance and clear data ownership, and to ensure data is shared appropriately across the institution and not held too tightly and with too few people.”
This focus on data stems from the wider digital transformation of universities in response to COVID-19. Institutions worked intensively during the pandemic to build digital infrastructures to support student and academic life backed by significant investment. The challenge for COOs is now to sustain this level of investment and demonstrate its value.
The study showed that three-in-five COOs (59 per cent) have ramped up IT investment in the last 12 months and almost two-thirds (65 per cent) regard IT infrastructure and systems as the most important function in the evolution of their university’s approach to teaching and learning.
Within this, automation is a clear priority for many COOs. One respondent asked, "If you can do it with mortgage applications, why not admissions?” COOs see automation as not only a mechanism to support the service experience but also to reduce repetitive transactional work and cost.
Ashkanasy added: “Universities are at the start of their automation journey. Studies on automation have found process efficiency gains of 40 to 70 per cent in functions such as HR, finance and admissions. With roughly half of professional services in a university being transactional, the potential is significant. Automation also allows staff to take on more strategic activities. The time saved from manual and transactional work can be converted into more rewarding work that enhances performance and reduces cost.”
Our research showed that over three-quarters of COOs (78 per cent) said their institutions would be in a stable financial position within three years, with around half of those (37 per cent) already there. However, there were differences in the timings of the expected financial recovery, dictated by geography, COVID-19 and the responses of national governments.
Ashkanasy explained: “In the UK, COOs expect to see financial stability return quickly. However, in Australia and New Zealand, the pandemic hit just as international students were due to come to campus and governments instituted tighter border controls than almost anywhere in the world. Consequently, COOs in the southern hemisphere expect the financial rebound to take longer.”
Our analysis also showed that, throughout the pandemic, COOs have pursued a range of strategies to maintain target surpluses. The most popular approach, cited by over half of COOs (56 per cent), has been expanding international student intake as in-person international study has again become a reality.
Meanwhile, outsourcing, once considered a quick fix to reduce cost and complexity, is not popular as a path to short-term cost savings. Some COOs found that outsourcing even increased costs – for example, if they outsource catering, then they must subsidise meals.
One COO said that that carefully managing what they outsource is crucial, adding that universities need to get “really good at partnering” and that the “flow of capital coming into the sector is a big opportunity”.
University COOs are feeling the effects of the global talent shortage with more than half those surveyed (54 per cent) reported only being able to fill priority positions half of the time. In line with their focus on digital investment and data analytics, most COOs identified IT experts, data analysts and business analysts as the hardest to find. Similarly, people with strategic skills and agile experience continue to be in high demand.
This is caused by a range of factors including negative perceptions of higher education as an industry to work within. A COO from a UK university said they faced shortages in all skills and capabilities with current professional staff and those they recruited due to a “complete lack of parity of esteem in the HE sector”.
Ashkanasy added: “To address talent gaps, COOs are looking outside the higher education sector but there are barriers to effectively transition these people into operational roles. Some COOs, therefore, feel stuck between a rock and a hard place when recruiting. Candidates from within the sector understand the operating rhythm of a university but may not have a commercial understanding of how to run an institution, while those from outside will come with commercial strengths, but may struggle to understand the lie of the land within HE. The real challenge is putting these two together.
“The out-of-sector recruitment challenges will persist, but universities can do more to make themselves attractive and effective at onboarding talent. This starts with modernising human resource departments, many of which continue to be highly transactional.”
The report concludes by highlighting the role of the COO and their team as the ‘engine room’ of a university. The COO of tomorrow has evolved from historically overseeing administration and compliance, to managing risk and becoming the strategic partner to the university’s senior leadership, with each new stage building on, rather than replacing, the former.
Published on April 29 2022.