Making the Grade: As the Higher Education Sector Finds Itself Struggling under a Heavy Course Load-Short-Term Admissions Problems Made Worse by a Systemic Financial Crisis-Leading-Edge Universities Are Studying Up on CRM

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the University of California (UC) state school system seemed to have a happy circumstance with its Fall 2009 freshman admissions. Approximately 127,000 students applied, a 5 percent rise over Fall 2008. Consequently, the admission rate dropped to 72.5 percent, the lowest in a decade, according to UC's statistics. You'd think this was good news, enabling UC to pick the best of the best, the creme de la creme.

A closer look, though, finds the UC system facing some innate problems. With the recession hitting California particularly hard, the UC board of regents decided in January 2009 to reduce freshman enrollment by 2,300 students, or 6 percent. Combine that with UC's policy of guaranteed acceptance for California-resident students achieving a particular mix of test scores and grade point average, and you have a recipe for potential disaster. According to information provided by UC, the school system will still offer admission to every qualified California student--but not necessarily at each student's particular campus of choice. This will be the case for approximately 10,000 students.

With the sheer number of applicants and the juggling required this year, UC admissions officers may be feeling a bit like Bluto from Animal House. But Tim Copeland, a practice manager with the strategic services group at Wayne, Pa.-based higher education CRM solution provider SunGard, contends that these are precisely the situations CRM was designed for. "CRM fits this perfectly," he says."How do we better target, understand, and respond to the people who matter most? The technology is the enabler, understanding what our strategy is to answer that question."

Welcome to the new age of CRM in education. While many programs are still targeting the same old issues--the 360-degree view of each student, for example--the collision of economic recession and advanced technologies may provide an opportunity for CRM to tackle problems that require more nuance. Nicole Engelbert, lead analyst for vertical technologies at Datamonitor, says these problems will continue to evolve in 2010, thanks to the start of a demographic shift that will see a decadelong decline in the size of the college-age cohort. "Institutions are going to have to be much,much smarter and targeted in their admissions process," she says. "They'll have to be more proactive in retention efforts."

The essential message? Optimize and streamline processes. Sound familiar? Good, Copeland says: "People don't realize that higher education is a business. Our colleges and universities, in terms of financial resources, are quite large companies. From an outsider's point of view, they don't always understand the pull of how to invest resources ... [but] it has to be run like a business."

Some schools are already at the head of the class, having studied up on CRM and made it their own. The challenges may differ, but the end goal is the same: improving business processes so that the customers--in this case, students--get the best these institutions of learning have to offer.

MARKET OVERVIEW 101

Engelbert says that, despite the recession, all indications point to higher education spending more over the short term in CRM and related technology investments. "It will be an increasingly important solution [for this segment]," she says.

Engelbert projects information technology revenue from CRM solutions in the United States, United Kingdom, Germany, France, and Australia will grow from $184.9 million in 2007 to $324.5 million in 2012--but she says she wouldn't be surprised if that forecast became even rosier. "I anticipate the number will only go up," she predicts. "Of all the things institutions are likely to cut or scale back on [in terms of] investments, CRM is unlikely to be one."

While the market need is still there, the rationale for the purchases may not be. In our Market Focus coverage of this space last year ("Making CRM Mandatory for University Administration,"August 2008) we noted a trend among many institutions to take a more organizationwide view of students--recruiting, retention, and development. …