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2010 EDUCAUSE-NERCOMP Keynote: Living with Disruption: News from the Frontlines - James Hilton

Living with Disruption: News from the Frontlines

James Hilton’s Keynote @ NERCOMP 2010

This presentation was recorded and is available at http://www.educause.edu/blog/gbayne/SessionLivingwithDisruptionNew/201258.

Introduction:

Known as both a great manager but also a visionary and coalition builder, James Hilton is creating the future by knowing the trends and looking at the big picture.  He puts things into context which is esp. important now as we are at a turning point in higher education.  He is also a motivator and we are enlightened when he shares his knowledge and understanding of higher education IT

Notes from the Presentation:

Disruption is a world of opportunity not a ‘blowing up’

Hilton offered standard caveats and noted that the presentation has a beginning, a middle, and an end – but it will be best if we engage along the way.   In his teaching days he read every course evaluation – esp. to see what, as a professor, he could do to improve the course.  The one best tip he remembers was “Breathe occasionally” 

There is change at every exit.  But what’s the nature of change.   In the academic world we have breaks that are disruptions (so we have ‘downtimes’ which is good) and we think we’re in still waters and then brace ourselves for the rapids (back to school)  But in reality – it is rapids all the way down…we start as a tiger, then elephant, and then turtle but then it’s turtle all the rest of the way down.

People pay big money to do the rapids.  He asked ‘How do we do more than survive but rather thrive in the world of change?”  If we just want to last until calm waters, then we won’t last to the end.  

Change is emergent – it evolves.  In IT we have 5 yr plans not 20 yr plans. We need to plan but we have to remember that all will be changing around us.   Agriculture seems planned with everything laid out in nice rows - but the world is not laid out such,  He noted that Jefferson planned a university – but not the UVA that exists today.

Hilton said that, if we hire a consultant, they’ll have you do a gap analysis which leads to an 18 month project.  We spend lots of energy and money and we get there (happy day) only to discover that we’re right back where we were at the beginning.  The world kept evolving and we are no longer where we want to be.

We need to change where we are headed but we’ve done it in pieces; not as an intentional flow with the way the world is evolving.  Emergence is not chaos.  We know the starting point but not the end point.

We need to identify and adjust our fundamental conditions so the new opportunities will emerge.  We need to instill a discipline of ‘fine-tune as we go’ and then continually refine based on our experience and the new conditions.

We shouldn’t spend time planning.  We should spend more time deciding if we are moving in the right directions while continually asking ourselves if we are still moving in the right direction.

Change is constant and emergent.  How do we navigate the breezes that become gale winds – the ones we need to harness for success?

The Disruptive Forces

Disruptive force #1 – Unbundling

The single truth is that technology unbundles the established way of doing things.

Example: Banking.  In the past, their hours were limited and we had to go to the bank in those hours limited events.  It was like a social event – everyone there.  Today it costs more to see a real person and we use ATMs and online banking and we are ‘ticked’ if it takes more than 30 seconds for a transaction.  Even mortgages are available online.

Unbundling Music

The record industry wants us to think that piracy is the key issue and that it is college students that do it.  But in reality, it is only 3% college students that are involved.  In the beginning the universities had the bandwidth for piracy but now everyone does.  The real problem is the unbundling of the music – i.e., iTunes –The music business didn’t have to change their business model through all the various formats:  from wax to vinyl to cassettes, 8 track, etc.  They could sell a bundled group of good and bad songs into one product at a relatively high price.  But the internet and legal purchasing means we can buy just the good music. 

Hilton worked with his own children so that there would be no DCA notices in his family.  He gave access to iTunes and they buy by the song though James and his wife still buy albums.  Hilton’s generation thinks there will be other good songs on the album but his children don’t want to waste precious time on something they don’t, or might not, want to hear.

Our libraries’ primary mission was access & preservation.  University libraries must keep everything – even Latin – and provide knowledge navigation.   But now they’re not in the access business anymore.  Access is not the primary driver anymore.   In the electronic world the library has an electronic subscription to provide access but they can’t negotiate preservation and this unbundles the link to knowledge navigation.  The subscription providers ‘business’ will only preserve what they can make money on. So, preservation will remain huge for libraries but it is not clear about the status of knowledge navigation. It may move into the academic content areas.

Unbundling – Higher Education

We are used to delivery of classes, football, drama, services as a bundle.   However, online changes everything.  It’s the large classes that pay enough that you can do the small classes.   It’s easier to put these big classes online.  People will take these introductory classes wherever they can to save money and time.

Disruptive force #2 - Commoditization

Standardization is how prices drop.  New and often inferior technology is on a faster development curve which drives down costs and drives up market penetration, but at the same time brings the overall quality down.

Commoditization – Steel

US plants were a mature technology and produced great steel and it was ‘king.’  Japan developed processes that could do it faster and cheaper for the inferior level of steel and so US steel said fine and gave it up to them.   But then Japan incrementally got better until they could do the high grade steeels best and cheapest

(MP3s – less quality but mobility is the key)

Commoditization – Education

University of Phoenix was created to commoditize education.  Their classes are interchangeable.  Everything is the same regardless of where you are taking it, thus driving the labor costs down.   Traditional universities and colleges have a faith based resolve that we are better but soon we’ll have to actually have data that says so. 

While traditional higher education has grown 1%, for-profit higher education has grown 8%.   

Disruptive force #3– Consumerization

There are things we can do face-to-face that we can’t do other ways but that’s not the  large traditional higher education classes.  Consumers want to have direct access to services.

Story:  Some were livid that Apple created the AirPorts.  They were cheap and cute (perfect for a fully consumerized world)   How does the central IT react to the knowledge that they are no longer in control?   Email - Gmail and others are here to stay.  Only 5yrs ago Dell asked how many of us would outsource email and only 99% said ‘no.’ We said it was too important to outsource.  (Granted there are some policy concerns around faculty email)  The issue is that it is hard to give up control but it is better to have someone else to do it in Hilton’s opinion.   Gmail and others are financially driven to keep the systems up.  Higher education has better ways to spend money.  We need to shed services that are no longer strategic to us.

Hilton asks:  Is IT strategic or essential?  Does IT matter?  (citing Nicholas Carr’s “Does IT Matter?”)http://www.nicholasgcarr.com/articles/matter.html), he said we used to be able to pour in money and reap rewards but we can’t do that anymore.)   IT is like oxygen – it rarely gives us a strategic advantage but it’s difficult to get along without it.   So let’s put our money where we get a strategic advantage.  Let’s put our money into strategic possibilities.

Hilton suggested that we need to keep our Presidents, VPs, Provosts, Financial Officers needing us to do those things that are strategic.

Consumerization – public labs (the general ones not the specialized one)

“Students think shutting them down is a bad move” – but 99% students bring laptops.  95% of the applications they use they already have on their own laptops.  We can free up the $$ for other things.   Also – if we can’t shut a service down then someone must give us more money to run more things.   A key to strategic IT services is that we must be able to re-allocate resources.

Consumerization – user support

An outsourced help desk is not only cheaper but we can get 24X7 coverage. 

Consumerization and storage

Amazon can do it cheaper

Hilton says that we can’t be afraid of change, esp. if we are in technology services.  Organizations must change to embrace new technologies and all of that goes with it.  None of us want to say no to those on our campuses who want the new technologies.

In the end it is all about relationships.  We need a dating service to get the right people together to get what needs to be done actually done.

We can have competitive advantage in the future – if we choose the right collaborations.  We must be aligned with the core missions of the university or we will be outsourced.

We must all go out and get connected with our university communities and make sure that all IT staff feel that they can make a difference.

Hilton’s closing remarks were to “Remain brave of heart” and “There is urgency – we must do it now!”

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