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Well managed technology infrastructure and support has become a competitive necessity in the national economy, not as a competitive differentiator, but as a tool to redesign service and production processes as the basis for competitive innovations that can improve quality, unit cost structures, market reach, and customer convenience and satisfaction. Today's banking services, for example, rely on a high-performance IT infrastructure and related technical and business support for customers. Banking services are based on a customer-centric and cost-effective flex services model that combines convenient, online self-service with alternative access options for securing expert help when customers need or want it. Automated teller machines are the most familiar form of self-service, but online (asynchronous) banking (from any Web connection) can provide self-service at its most convenient by allowing customers to manage their accounts, set up automatic deposits and payments, apply for loans, and so on. Most banks also provide toll-free or online access to customer-service representatives during extended hours or even 24x7x365. And face-to-face help is available during business hours in convenient branch locations and the main office.
Bankers don't market "distance banking" or label customers as "traditional" or "nontraditional." They realize that different customers have different needs and preferences for how they obtain services. Banks also know that time-shifted online self-service can reduce costs while increasing customer satisfaction, which is why they frequently offer incentives for self-service. They outsource and merge or partner with each other to lower unit costs and enlarge the customer base to a level commensurate with ever-growing competitive pressures on profit margins. An investment in high-performance IT doesn’t guarantee success, but it does give banks an opportunity to innovate cost-effectively in order to retain customers and compete more effectively for new customers. Some banks will succeed in this increasingly competitive environment; some will not. Success will depend, for example, on other applications of technology to help cost effectively track and manage the customer relationship and to gather evidence (“business intelligence”) about customer needs and the effectiveness and internal costs of services. Competitive outcomes will depend on how well redesign efforts and resulting service innovations are executed to offer new services, improve service quality, retain customers, and reach new markets—all while reducing unit service costs.
Our earlier observations about the role of IT in making it possible for the national economy to register notable productivity gains through the recent economic downturn, along with some technology-enabled examples of cost-effective innovations in higher education, spoke to the necessary role of a high-performance IT environment in any attempt to reduce unit costs while simultaneously improving other indicators of institutional performance. Just as in the banking industry, however, high-performance IT is necessary, but not sufficient, for planning and implementing cost-effective, competitively successful service innovations aimed at improving institutional performance in higher education. Technology has become not only ubiquitous in higher education, but also a worrisome expense for many leaders precisely because it has largely remained a necessary expense in response to grass-roots demands for “digital-campus” services that only randomly or episodically coincide with innovations purposefully selected and supported to improve quality and access, while also reducing unit costs.
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