Monday, February 06, 2006

ASU Strategic Technology Alliance

Managing the Technology Context to Keep Pace While Promoting Focus

Technology and New American University Vision
Driven by the vision of its president, ASU is at the beginning of a 10-year plan to expand the size and scope of Arizona State University while simultaneously raising its academic quality. Costs must be contained while quality is increased, and all of this must be achieved in the face of mounting global and domestic competition, and a growing set of economic and technologic pressures. No other American university has ever become both bigger and better at this scale, at this pace. No other American university has even tried.

In his profile of Michael Crow in the November 18, 2005 edition of the Chroncile of Higher Ed, John Pulley quoted the president as saying he intended to blow up the status quo and reassemble the pieces into a model for 21st century higher education. ASU intends to break ranks with the higher education establishment, to define ourselves by who we include, not who we exclude. ASU will simultaneously raise its enrollments and its level of academic achievement; to proudly define ourselves not by the quality of our input but the extraordinary quality and diversity of our output.

President Crow’s is a bold agenda, and one that will require significant and ongoing improvement of the academic enterprise, and a concomitant growth in the research enterprise. Clearly the effective and ongoing use of technology will be indispensable in pursuing this agenda. Yet ASU, like most of the rest of the academic establishment in the United States, has yet to apply information technology to significant effect on its most fundamental activity, the teaching of undergraduate and graduate students.

According to Frank Rhodes, president emeritus of Cornell University,

[U]nlike other business, universities have not yet applied new technologies to reduce instructional costs. Major corporations routinely use worldwide electronic networks to improve efficiency in every aspect of their businesses. Universities also make brilliant use of computers to advance science, to manage their business affairs, and to provide access to data banks; but, in their basic business of teaching resident students, they have not diverged much from the methods of Socrates, except that most faculty members have now moved inside.

[P]aradoxically, the research universities, which created and developed much of the new communications technology, have – unlike business and industry – been slow to apply it to their main stream activities. Certainly, the use of computers has improved research and professional practice in every field, and has revolutionized information storage and access for faculty and students alike, while it has facilitated university business operations and management. The business of learning, however, remains largely untouched y this revolutionary technology. Most instruction is still a cottage industry, little influenced as yet by the benefits and support of modern technology. It is as though an industry had computerized its business and management activities, but left its manufacturing operations and sales distribution essentially unchanged and unimproved.

This general description of the state of US higher education in general describes ASU’s particular use of technology reasonably well. In the past decade ASU has intentionally pursued a Near Follower strategy, but the increasing pace of technological advancement, coupled with the New American University imperative, is forcing the need for a new strategy.

Leaving aside how hard it is to follow when technology is exploding so quickly, if no one is going where you are, it’s pretty hard to follow them there.

The Changing Curve…

ASU takes Near Follower seriously. Our university strives for excellence in implementation of technology programs and services, staying abreast of developments in higher education and technology generally, and adopting new capabilities once they have proven themselves elsewhere. Relying primarily on internal expertise, university owned infrastructure, and tactical procurement, ASU has built and maintained a technology system that supports the university’s operations efficiently and scalably. ASU’s IT organizations central focus is in ensuring that no data is lost, that no transaction fails, that every call goes through - and in that mission they have been eminently successful. Whatever else may be said, technology at ASU works.

However, the position of Near-Follower is becoming increasingly difficult to maintain in the face of exponentially expanding technological capability.

Like many universities, ASU pursues a vertically integrated strategy in providing the institution’s technology infrastructure. ASU owns and maintains its own telecommunications networks, its own email service, its own network storage, its own web services, its own administrative systems. Most universities pursue this internally managed strategy largely because of their early leadership positions. As the inventors — or at the very least the earliest of adopters — of most of these technologies, universities had little choice but to provide these services for themselves.

When universities first started issuing ‘.edu’ email accounts, there was certainly no private company to them from. A vertically integrated approach was the only alternative. In order to deploy a computer network in the 1970’s and 1980’s, universities had no choice but to develop internal expertise. There was no alternative to leadership.

And like many other universities in the country, ASU pursued that leadership. Information technology professionals built up a technology platform from the inside out, deploying and integrating a hardware infrastructure, then developing and maintaining a set of software applications to run on it. And even as technology gained ground in the private sector through the early 1990’s, universities remained mostly vertically integrated, though increasingly as followers rather than leaders.

But over the past decade, as maturing technology firms have begun to provide exponentially increasing capability at exponentially decreasing cost, that vertically integrated strategy has left the universities increasingly less agile than the world at large.

ASU is no exception. University technology investments – investments in software, equipment and expertise – can no longer be turned over fast enough to keep pace with the increasing rate of technological development. The rate of software innovation has outstripped an individual university development staff’s ability to keep up.

Near follower is not a viable approach when progress is exponential. Once the knee of the curve is reached, an enterprise is either tracking the curve, or watching it disappear from sight; and the innovations that come to be taken for granted move further and further beyond the enterprise’s reach.

Consider the web as an indicator. In 1995, ASU’s website was on a par with the best in the world. It used the same hardware technology, the same server software. It was written according to the same standards and provided roughly the same capabilities as the best of the best.

Over the ensuing decade, ASU has put serious energy, effort, and investment into its web strategy. Server hardware has been continually expanded and upgraded. Increasing amounts of bandwidth have been devoted to web traffic. More and more people have created more and more pages — hundreds of thousands more — while new services have been incorporated using database technology, java applets, and new forms of content like audio and video. All in an effort to be Near Followers.

In that same time span however, the commercial enterprises whose websites were ASU’s peers in 1995 have created a capability so far advanced as to be completely different. In place of an online brochure and a shopping cart, technology leaders like Google, Amazon, and eBay have transcended the hierarchical homepage paradigm, replacing it with a truly personal, highly interactive web destination backed by a vast and ever increasing data cube that contains valuable, minable information about the likes, dislikes and habits of their users.

Unlike ASU’s site, the world’s leading web destinations now provide unprecedented access to a wide array of digital knowledge resources. They foster new forms of collaboration and distributed content development. Extensive use of data mining and collaborative filtering now provide personalized guidance based on the collective wisdom of spontaneously organized communities.

The gap continues to widen, and the web is only one example. On every technology front, commercial capabilities are outstripping ASU’s ability to follow, nearly or otherwise. A new strategy, one to replace Near Follower, will be required for ASU to take full advantage of the engine of technological progress in pursuit of the New American University imperative; a strategy that allows ASU to maintain its tradition of reliability and security, while dramatically increasing its technical agility.

Core vs. Context
The response of vertically integrated industries to similar technological pressures is instructive. Geoffrey Moore, technology strategist and business re-engineering consultant, has helped many of today’s leading technology companies make the transition from vertical integration using a method he calls a Core vs. Context analysis . Vertically integrated enterprises use this approach to decide how best to focus resources to achieve leadership in the most essential parts of their business.

Moore’s method is to separate an enterprise’s essential activities into two categories: Core and Context. Core activities are those which a firm must concentrate their own talent, management, and internal resources on, because they are central to the enterprise strategy. Context activities, by contrast, are those that might be reasonably provided to the firm in partnership with other firms for whom those same activities are Core.

Core are those activities that can set an enterprise apart from its competition. Leadership in Core activities directly advances the enterprise mission. For a business, we say that Core activities are the ones the market rewards directly. Core activities attract or hold customers, increase or hold prices or marketshare. Core is what an institution must continually innovate in to achieve and maintain leadership.

Context activities, on the other hand, are those that, while critical, do not directly distinguish the institution from the others in its market segment. It is not an issue of importance. Like Core, Context is also important to success. But unlike Core, the marketplace does not directly reward Context activities. They are necessary, but not sufficient.
What does that mean for ASU? Improve the Core and more students come to ASU, and do better in the bargain.

Improve the Core and more research wherewithal comes to ASU, with better output as the result.

For ASU, in the technology arena, the Core activities are:

  • the ongoing application of technology to the Instructional and Research missions,

  • the ongoing development of an interactive online environment that embodies the vision of “One University in Many Places” and

  • the ongoing development of a system to amass and disseminate digital knowledge assets.

Every other technology activity is Context.

Strategic Alliance
ASU must focus in order to effectively apply technology to advance the New American University agenda. Each of the Core activities will require a targeted strategy for achieving and maintaining leadership:

  • a strategy for using technology to more effectively scale the higher education enterprise to accomodate growth, and to continuously improve the academic achievement of our students;

  • a strategy to develop sustainable support systems and services for researchers throughout the ASU community;

  • a strategy for continuously enhancing ASU’s online experience – to help ASU connect with its stakeholders – prospects, students, alumni, sponsors, faculty and staff.

Each of the Core activities will require its own specific strategy, but for all of the Context activities, we advance a single strategy, Strategic Technology Alliance. The heart of the alliance strategy is to gracefully transition ASU from internal to external fulfillment of Context activities.

This is not outsourcing in the traditional sense. We are looking for exponential, not incremental advantage.
For example, if a company were to offer to house ASU owned hardware and an ASU developed software stack in their data center, managed by their employees instead of ASU’s, the best ASU could hope for would be an incremental improvement in cost or capability, and would run the risk of achieving neither. Either way, the incremental difference isn’t worth the risk. Traditional outsourcing is irrelevant to strategic alliance.

Strategic technology alliance is about replacing an internally managed service that is part of ASU’s Context with a service managed by one or more private technology companies for whom the activity in question is Core. In order for a private company to compete in one of these arenas, it must demonstrate its ability to match the twin exponentials: an exponential increase in capability and a simultaneous exponential decrease in the cost over time.
Strategic technology alliance provides advantage to ASU whenever we can enlist a private enterprise as an ally, an enterprise that can assume responsibility for a major part of a piece of ASU’s Context. An ideal strategic ally is a firm that:

  • can provide a needed service at a scale orders of magnitude beyond ASU’s size;

  • is subject to competitive pressures that force it to adapt more quickly than ASU is capable of adapting;

In order to accelerate ASU’s overall technology adoption, while simultaneously allowing it to focus on achieving maximum advantage from the application of tech to its core instructional and research mission, ASU will seek to establish a coordinated set of strategic technology alliances and work with those allies to supply the Context services as an integrated platform.

Basis of Strategic Technology Alliance

Business Linkage
Ally is not just another word for vendor. Strategic alliance must define a new relationship between ASU and its most important technology suppliers, one that recognizes the needs and objectives of both parties.
ASU needs a working relationship with a private provider whose core business is to deliver a reliable, high-quality, cost effective technology service that tracks the state of the art. In order for this relationship to be attractive to the strategic ally, the business opportunity must be part of the private concern’s core business strategy, and be of sufficient magnitude to be strategically important, and of sufficient duration to warrant the capital investments needed to convert, initiate and upgrade the core technologies necessary to continue to deliver and improve the service.

If the strategic alliance strategy is like a pie, then each slice must be as wide as possible, as distinct as practical, and as deep as necessary:

  • wide in the sense that the opportunity offered represents a significant piece of business that is directly within the ally’s business space;

  • distinct in the sense that the opportunities offered to each ally have very little overlap to promote the possibility for cooperation among ASU’s various allies; and

  • deep in the sense that the arrangement have a long enough duration to allow the enterprise to recoup needed investments.

The benefit of strategic alliance to ASU is threefold. First, ASU gains the ability to focus. Strategic alliance will allow ASU to manage its technology context at a higher level, requiring less direct involvement by ASU personnel. Second, the longer term nature of the alliance relationship will allow ASU to benefit from technology investments made by private enterprise. Longer term deals allow private firms to take greater risk on behalf of ASU, because the relationship recognizes the need for a longer time horizon to allow firm’s to recoup value, thus allowing ASU to more effectively monetize its future. Finally, by working closely with a set of trusted ally’s, ASU will be able to benefit from the competitive position of their allies, allowing ASU’s technology platform to progress at the rate of technical evolution.

In return for a long term share of significant and valuable core business, ASU can reasonably expect that their ally will be willing to enter into reciprocal agreements that allow ASU to provide educational and research services to the ally as part of the overall alliance. These offset agreements allow the ally to direct some of the benefits of the alliance back to the purchaser as an intrinsic part of the overall relationship.

Examples of offset arrangements might include:

  • a share in the revenue derived from hardware and services offered to the ASU community as a cooperative effort between the ally and the provider;

  • sponsored research

  • sponsorship of scholarly activities

  • joint promotional opportunities

  • collocation of ally business activity at ASU facilities such as the Scottsdale Innovation Center or the ASU Research Park

In addition to the core business opportunity and its offsets, there are also synergies that will exist between ASU and its strategic technology allies. These synergies arise at the intersection of ASU’s mission and the allies’ business activity, particularly as those activities are directed at the higher education space.

Co-operative research represents one such synergy. One of the design imperatives of the New American University is that ASU should seek out research opportunities that meet community needs and enhance the quality of life. ASU is actively oriented toward use-inspired research, research with both purpose and application. The strategic alliance relationship would allow ASU and its allies to engage in long term research programs directed questions of mutual interest. ASU’s Flexible Display Program, developed in conjunction with the U.S. Army and a variety of private enterprises is an example of one such research program, focusing on developing solutions to the set of problems related to the development and commercialization of an emerging technology.

ASU’s Strategic Technology Alliance program also opens the possibility for using the University as a living laboratory in the utility of technology within an enterprise and as a social mechanism. By developing a flexible, adaptable technology delivery platform that operates in perpetual beta, and then instrumenting the online behavior of the ASU community to create an Amazon-like database of user preferences and patterns, ASU and its allies will be in an excellent position to understand how the wants and needs of the ASU community. Mining that database, in the aggregate, will provide ASU and its allies with information on how an extensive and highly influential demographic group are using new technologies and services, helping ASU direct the development of its online campus to maximize student/faculty satisfaction, while simultaneously allowing ASU’s allies to refine their product offerings in a low-risk, data driven way.

The development of the ASU Perpetual Beta Technology platform will be a major source of synergy for the alliance members.

Strategic Technology Sectors

At the moment, ASU has identified 8 distinct alliance sectors. Again, for each of the sectors outlined above, ASU desires a relationship with a prominent, long term ally who can identify a broad swath of activities within the sector that are Core to that ally’s business model.

To drive these relationships forward ASU anticipates identifying a timeline for transitioning this activity — over a period of months, or years if need be — from direct ASU management and ownership to management by the technology ally.

The eight sectors outlined above could provide ASU’s technology platform as a managed service:

  • Telecom

    • LAN and data services

    • VoiP and other phone services

    • Backhaul and intercampus connectivity

    • Video on Demand

  • Wireless

    • Preferred Cell Provider

    • Wireless data connectivity through EVDO and its follow-ons

    • Wi-Max as it emerges

  • 1:1 Student Computing

    • Specification and co-operative online sales of devices on a program by program basis

    • Hardware and software support

  • Search

    • Data Mining

    • Collaborative Filtering

    • Management of the ‘rivers of content’

  • Application Hosting

    • Server management business

  • Web Services

    • Email

    • Web hosting

  • Storage

    • Wiki

    • Blog

ASU is currently developing a framework for pursing Strategic Technology Alliance with private enterprises. This will require a clear definition of the selection process and selection criteria, as well as a definition of the protocol for ensuring that selection is made in the public interest, and that, once established, such alliances continue to operate in the public interest.