With financial, political, demographic, and cultural pressures, higher education institutions are looking for new ways to operate and strengthen their standing (as recently highlighted in this survey.) Institutional leaders are increasingly pursuing mergers and acquisitions focused on aligning resources, simplifying operations, reducing duplication, and either direct or complementary alignment of academic offerings and student profiles.
While mergers and acquisitions can open new opportunities for growth and innovation, they can also multiply technical debt across a newly formed enterprise. However, there are approaches to help navigate the process and ensure institutions make the best short-term decisions to reduce the amount of expensive, long-term technical debt.
Technical debt encompasses the outdated systems, processes, data structures, and performance limitations that result from prioritizing short-term needs over long-term efficiency, often leading to the need for future reworking or expensive ongoing maintenance efforts. The longer technical debt accumulates, the more costly and detrimental it becomes, as existing problems worsen over time and rectification efforts become increasingly expensive.
For institutional leaders going through a merger or acquisition, a key focus is aligning the operations of the institutions while simultaneously minimizing new technical debt and retiring existing technical debt. This longer-term technical debt reduction goal influences and guides short-term decisions to avoid an increase in technical debt and take advantage of opportunities to retire the most expensive and risky debt along the way.
During a merger or acquisition, each area of the impacted institution is working furiously to create a unified and cohesive external presence by aligning academics and operations. It’s just as important to create internal operations that function smoothly and sustainably. One of the most complex pieces of internal operations to rationalize is technology.
As we examine the scope of an institution’s technical debt, the obvious components are the applications and infrastructure that support the institution.
Here are a few less-obvious concerns:
It’s helpful to examine these factors through the lenses of People, Processes, Data,and Technology. Using these lenses can help organize the multiple streams of interrelated work and ensure a holistic and balanced transition plan.
Focusing on people may be the most critical from the start. Faculty and staff need clear guidance on how and when decisions about their employment status will be made so they can focus effectively on executing plans to move the institution forward.
As we’ve examined institutions going through the technology evaluation and consolidation process, we have identified four patterns, or approaches, that helped guide their teams. In every case, the institutions leveraged combinations of these approaches throughout their work to reduce the long-term debt incurred through the process. These methods can help teams model and communicate their decisions and plans effectively.
When evaluating duplicative components of the technology ecosystem, model decisions using these approaches to make the best short- and long-term decisions that can impact your long-term technical debt:
All of these approaches reduce technical debt to varying degrees—except Integrate, which increases technical debt by adding the integrations themselves.
When institutions combine, their technical debt is immediately multiplied.
Technical debt causes mounting costs in the form of future efforts to keep technology current. It also results in mounting operations efforts and risks on the technology and business functions the technology supports. Over time, this debt can become so massive that the only viable option is a complete replacement of that technology component.
Technical debt occurs in every layer and component of technology that supports an institution, from network cabling and Wi-Fi endpoints to data centers and enterprise systems.
But not all technical debt is a critical issue and will never be completely eliminated. Some debt is sustainable—as long as it doesn’t create significant institutional risk or operational costs. It does, however, generally reduce the agility of the organization to make changes as it shifts strategy in what will continue to be a dynamic decade for higher education.
Competing priorities and budget constraints make decisions especially complex during a merger or acquisition, so the retirement of technical debt is usually not a top priority during this dynamic phase. However, with so many areas of the institution under evaluation or rearchitecting, leaders will benefit from a clear strategy to enable short-term decision-making that results in long-term technical debt reduction.
Need help with that strategy? Please reach out to us!
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