HE Transformation has a Problem. But Not the One You Think.

After HE Transformation 2026 last week, Robert Solow’s productivity paradox raised an interesting question for me: with all this investment in HE Transformation, where are the measurable improvements in financial sustainability?

It’s time to critically assess how HE Transformation aligns with individual institutional objectives.

HE Transformation must be at the forefront of strategy as we move forward in uncertain times.

Is HE Really Willing to Change?

HET26 brought university leaders, technology specialists and commercial partners together in London last Thursday to discuss how institutions can navigate an increasingly challenging sectoral environment. Our universities are being asked to change how they operate whilst continuing to educate students, undertake research and serve the public good.

As we reflect on HE Transformation, it’s essential to understand how HE Transformation shapes our approach to challenges in the educational sector.

HE Transformation is a critical topic in today’s educational landscape, and exploring its implications is essential for future development.

We used to call that rebuilding the aircraft in mid-flight.

I had intended to be there myself, but doctor’s orders intervened. Too many people, too risky, apparently. I protested with my surprisingly insightful observation that “you can’t catch broken legs”, but the doctor was not for turning.

I’m Keith Rozelle: after decades in enterprise technology sales, I work with universities and technology partners to improve student recruitment, conversion and commercial effectiveness.

Fortunately, the rest of my colleagues at FuseIT represented brilliantly, delivering “Known, not processed” in the Abbey Room. The room was packed, suggesting considerable interest in connected data and improving the student recruitment journey from enquiry to enrolment.

And reflecting on the themes surrounding HET26, I found myself returning to a question first posed, in a rather different context, almost forty years ago.

The Productivity Paradox

In 1987, the Nobel Prize-winning economist Robert Solow observed the extraordinary investment businesses were making in computers:

“You can see the computer age everywhere but in the productivity statistics.”

It became known as the Productivity Paradox. Businesses were spending enormous sums introducing technology that promised to revolutionise how they worked, yet the anticipated improvements in productivity were proving remarkably difficult to find.

In discussing these changes, we must consider how HE Transformation impacts our daily operations.

I wonder whether Higher Education is experiencing something similar…

In order to effectively measure the success of HE Transformation, institutions must adopt comprehensive metrics. HE Transformation enables universities to streamline operations and enhance financial sustainability. Therefore, effective HE Transformation also involves addressing the complexities of financial management within our institutions.

Understanding the challenges posed is crucial for achieving meaningful results. The journey towards effective HE Transformation continues to evolve, highlighting the need for adaptive strategies.

Digital transformation, organisational transformation, financial transformation, AI transformation and transformation of the student experience. Universities are investing in new systems, new operating models and specialist teams charged with delivering change, yet the sector remains under considerable financial pressure.

Investing in HE Transformation ultimately leads to improved institutional resilience and better outcomes for all stakeholders.

Perhaps HE’s transformation challenge isn’t that nothing is changing, it’s that we still struggle to demonstrate what that change has achieved.

Perhaps HE’s transformation challenge isn’t that nothing is changing; it’s that we still struggle to demonstrate what that change has achieved.

The journey of HE Transformation is ongoing, and it necessitates a continuous evaluation of outcomes and impacts. Its success depends not only on implementation but also on ongoing evaluation and adaptation. Understanding the implications of HE Transformation is crucial for all stakeholders involved in higher education.

The importance of metrics in evaluating HE Transformation cannot be overstated.

Perhaps HE’s transformation challenge isn’t that nothing is changing, it’s that we still struggle to demonstrate what that change has achieved.

Ultimately, the success of HE Transformation will be measured by the tangible benefits it brings to our institutions.

Solow’s observation comes with an important qualification. Productivity gains from computing eventually became more visible, partly because organisations needed time to adapt their processes and develop the capabilities required to exploit the technology. The absence of immediate financial improvement doesn’t necessarily mean transformation has failed but, after years of investment, surely it’s reasonable to ask where the benefits are appearing.

When Did Implementation Become the Success Metric?

Imagine spending three years implementing a new HR and Finance system. Millions of pounds committed, countless meetings, exhausted project teams and a dizzying number of consultants; more than anyone originally anticipated.

Eventually, it all goes live. The implementation partner celebrates, the board signs everything off, everybody breathes a collective enormous sigh of relief, and all eyes move to the next project…probably another transformation.

But twelve months later, are invoices actually processed any faster? Have administrative costs or errors been reduced, or merely transferred from your budget to some other unsuspecting soul? Can managers really make faster and better-informed decisions? Have academics recovered time previously consumed by bureaucracy, or has the institution simply exchanged one complicated, antiquated system for a newer, flashier one?

Replacing legacy systems may be essential, and some benefits are difficult to quantify. But implementation and transformation are not nearly the same, and that creates tension.

Implementation is a one-time event. Transformation is a process arc that delivers measurable improvements in outcomes.

Implementation is a one-time event. Transformation is a process arc that delivers measurable improvements in outcomes.

As we consider the impact of HE Transformation, it is important to remain focused on long-term sustainability.

Implementation is a one-time event. Transformation is a process arc that delivers measurable improvements in outcomes.

Without a clear vision of HE Transformation, institutions may find it difficult to navigate the complexities they face.

When the university’s financial sustainability is at stake, that distinction matters.

Transformation Meets the Bank Balance

Research by London Economics, analysing 118 UK higher education institutions, found that 24 — nearly 20% – had less than 30 days’ liquidity in 2023–24.

There are some caveats: the 30-day claim reflects a year-end snapshot, whereas student fee income is cyclical, and individual institutions will have different credit facilities but, nevertheless, it hardly suggests abundant financial resilience.

Meanwhile, universities continue investing in digital infrastructure, operating-model redesign, restructuring and specialist transformation teams. So what measurable contribution are those investments making? Are they strengthening recurring cash flow, reducing the underlying cost of delivering services, improving student recruitment and retention, or helping institutions become less vulnerable to unexpected changes in demand?

I often wonder how many people in HE now have Transformation in their job title compared with five years ago. I don’t have a reliable historical count, so I won’t pretend there’s been a measurable increase. But I’d be interested to know whether all this investment in transformation is producing corresponding performance improvements.

Financial distress is not necessarily evidence that a particular programme has failed. Transformation teams cannot control the market – inflation, government funding or international student visa policy, and without their efforts, some universities might be in considerably worse circumstances. Equally, an institution can become more efficient and still become less financially sustainable if income falls faster than costs.

But those realities make benefits realisation even more important to record.

The Chicken Caesar Salad Test (Stay With Me Here)

It’s a deceptively simple test, recounted in Chip and Dan Heath’s Made to Stick, and I wonder how many transformation programmes would survive an equivalent question. What fundamental institutional objective does this investment advance, and how will we know when it’s successful?

Now, universities aren’t airlines. Their purpose extends far beyond generating profit, and some of their most important contributions will never appear neatly in an ROI calculation. But financial sustainability enables universities to protect precisely those activities that cannot be justified by commercial returns alone.

Solow asks whether investment produces results. Kelleher asks whether we should invest in the first place. Together, they provide two useful tests of the digital transformation of higher education.

The Recruitment Funnel Nobody Fully Owns

This brings me back to the subject that filled the room at HET26: intelligent data and student recruitment and conversion.

The student recruitment and conversion process/funnel is usually described as one continuous, measurable journey: Enquiry → Application → Offer → Acceptance → Enrolment.

Beautifully logical, except most universities operate quite like that; student admissions is an interdisciplinary endeavour.

Marketing generates interest, admissions manages applications, academic faculties influence decisions, finance records income and student services deal with the consequences when expectations and reality diverge. Each department may have perfectly respectable performance indicators, yet nobody necessarily owns the complete journey.

Marketing knows which campaigns generated interest. Student records systems know who enrolled. But can the institution reliably connect those outcomes, explain where prospective students were lost and use that intelligence quickly enough to influence decisions?

This matters because universities often focus on generating more enquiries when the bigger opportunity may lie in converting more of the interest they’ve already generated.

There’s a commercial measure worth borrowing here: cost to acquire per enrolled student. Not cost per click, enquiry or application, but the total recruitment expenditure required to produce an actual enrolment.

It’s not a complete measure of recruitment success, because candidacy, widening participation and graduate outcomes also matter. But it would make some interesting conversations possible. What happens to that acquisition cost when conversion rates improve without additional marketing spend?

How much income is lost through avoidable melt between offer, acceptance and enrolment?

Not every student who chooses elsewhere represents a failure. Universities should help people make the right educational decision for them, not pressure unsuitable applicants into enrolling – admissions is not telesales. But understanding where legitimate interest disappears, and why, is a sensible place to seek both financial and educational improvement.

The difficulty is rarely just technological. It’s organisational. The decisive discussions take place between marketing, admissions, faculties, finance and senior leadership, each seeing a different version of the same problem.

I recognise that from enterprise sales. Deals are often won or lost behind closed doors; internal conversations the supplier never actually gets to participate in.

Read: KEF6 and the Benefits of Industry Partnerships

How Can One University Win and The Sector Lose?

Effective HE Transformation requires institutions to re-evaluate their strategic approaches and goals.

HE Transformation should be viewed as an opportunity for growth and innovation within the educational sector.

The relationship between technology and HE Transformation is instrumental in driving positive change.

There’s another complication. Suppose University A improves its conversion rate and recruits 500 additional students. Its income increases, the recruitment team celebrates a job well done, and the transformation appears justified.

To summarise, HE Transformation has the potential to reshape financial models and operational frameworks.

All stakeholders must engage in discussions around HE Transformation to fully realise its benefits.

But suppose those students would otherwise have enrolled at University B. University A is financially stronger, but University B is now weaker; the sector hasn’t necessarily generated any additional income.

Sustainability occurs at two levels: the individual institution and Higher Education as a whole.

Better recruitment intelligence can certainly create wider value. It can reduce avoidable non-enrolment, help students make better choices and identify where expectations aren’t being met. Improved retention can also benefit students, universities and society.

But if everyone simply becomes better at competing for the same applicants, have we transformed the sector’s economics or merely intensified the competition?

What Are We Actually Transforming For?

The team at Higher Education Transformation 2026 deserves full credit for bringing difficult institutional challenges into the same conversation. But conferences, like transformation in higher education programmes, should be judged by what follows.

Which brings us back to Robert Solow.

Perhaps technology was never the real story. The productivity gains came when organisations learned how to change the work itself. For universities, that means technology enabling better decisions, shared accountability and demonstrably positive outcomes.

Not every improvement will strengthen university balance sheets immediately, and not every financial difficulty can be solved through greater efficiency alone.

Nevertheless, I wonder how many university executive teams could confidently identify the three transformation programmes that have made the greatest measurable contribution to their institution’s financial sustainability over the past five years, and explain how they know.

Perhaps that would be a more revealing measure of transformation than the number of projects completed.

Because if we’re going to keep investing in change, we ought to be able to explain what is getting better.

And somewhere, I suspect, Herb Kelleher would still be questioning chicken Caesar salad.

keith@salesmarvel.co.uk – Let’s connect and discuss how we can advance HE Transformation together!