Untapped Potential: Why Haven't University CFOs Fully Embraced E-Commerce Platforms?

Unlocking the Potential of Core Facilities: A CFO’s Guide to E-Commerce

In today’s higher education landscape, financial sustainability is paramount. While universities have successfully implemented e-commerce for online learning, many have yet to fully embrace this model for monetizing underutilized resources and services, particularly core facilities. This presents a significant missed opportunity, especially considering that biotech and pharma companies outsource $56 billion in R&D annually, with universities capturing only 12% of that market. This blog post explores the challenges and opportunities surrounding e-commerce adoption for core facilities, specifically addressing the concerns and interests of CFOs in higher education.

“Let’s be candid: many universities

are facing financial pressures.”

The Financial Imperative

Let’s be candid: many universities are facing financial pressures. The average total operating revenue for public universities is approximately $32.5 billion, but expenses aren’t far behind, averaging $30.4 billion. Core facilities, while essential for research, often operate at a loss, with costs ranging from $10 million to $30 million annually. These facilities house millions of dollars’ worth of equipment that often sits idle, operating at less than 25% capacity. This underutilization represents a substantial drain on university budgets and a missed opportunity for revenue generation.

E-Commerce: A Viable Solution

With financial pressures mounting, finding new revenue streams has never been more important. Many institutions have successfully embraced e-commerce for online education, but a significant opportunity remains in monetizing underutilized core facilities through digital platforms. By creating a digital storefront for these services, universities can unlock new revenue channels while also streamlining operations.

Take a look at how universities are already leveraging vertical SaaS platforms to drive revenue and why this approach could be a game-changer for core facilities:

“...a significant opportunity remains in monetizing

underutilized core facilities.”

1. 2U: Expanding Reach and Increasing Revenue

Platforms like 2U, Honor, and Blackboard have enabled universities to scale their online programs, increase enrollment, and optimize resources.

• 2U helps universities deliver online degree programs, bringing in revenue from tuition fees and expanding their global reach.

• Honor optimizes online course operations, leading to more efficient use of resources and increased revenue.

• Blackboard enhances the learning experience and helps universities generate income from students through their educational tools and systems.

Key Insight for Core Facilities: Just as these platforms have transformed the educational landscape, core facilities can create digital storefronts for services like lab access, equipment rentals, and research consultations. By streamlining operations, they can attract external clients, increase utilization, and open up new revenue channels.

2. Honor: Operational Efficiency Meets Revenue Generation

Honor’s platform helps universities manage online course operations more efficiently, from staffing to scheduling. This optimization increases enrollment and improves resource utilization, leading to revenue growth.

Key Insight: Core facilities can similarly benefit by streamlining processes like booking, staffing, and resource management, ensuring full capacity and maximizing revenue potential.

3. Blackboard: Enhancing the Educational Experience

Blackboard provides universities with learning management tools that enhance the student experience. By offering access to its system, universities generate revenue while improving the student journey.

Key Insight: Core facilities can adopt a similar model by offering an online booking system, allowing external clients to easily access services and scale offerings for more income.

4. Coursera: Unlocking Global Opportunities

Coursera revolutionized how universities monetize content by offering online courses and certifications to a global audience. This has helped institutions generate significant revenue from course fees and certifications.

Key Insight: Core facilities can think similarly by offering access to specialized research tools, data sets, and equipment to external clients, generating new service fees from industries such as biotech, pharma, and research.

5. Oracle Cloud ERP: Streamlining Operations for Profit

Oracle’s ERP system is essential for many universities, helping them automate processes like finances, HR, and procurement. This reduces operational costs, increases efficiency, and boosts financial sustainability.

Key Insight: Core facilities can apply this model by automating workflows for scheduling, billing, and service tracking, reducing overhead while increasing operational capacity.

Addressing CFO Concerns

CFOs understandably have concerns regarding resource allocation, risk management, and organizational culture when it comes to adopting new technologies. Here’s how digital platforms address these key concerns:

    •    Resource Constraints: Platforms like these offer cost-effective solutions, eliminating the need to hire additional marketing, sales, or web development staff.

    •    Risk Management: Secure cloud infrastructure and seamless integration with existing systems ensure data security and compliance with regulations.

    •    Organizational Culture: By demonstrating the potential for cost recovery and revenue generation, these platforms foster buy-in from core facility directors and other stakeholders.

Why This Matters for CFOs

E-commerce platforms for core facilities offer CFOs a clear opportunity to increase revenue while controlling costs. By unlocking access to external markets like biotech and pharma, universities can turn underutilized assets into profit centers. These platforms also improve operational efficiency, reducing overhead and resource waste. For CFOs, this means a sustainable, scalable way to boost both top-line revenue and bottom-line efficiency.

Conclusion

As the pressure on university finances grows, embracing e-commerce for core facilities presents an invaluable opportunity. The financial and operational benefits are undeniable, and universities that make the transition will not only unlock new revenue streams but will position themselves as leaders in the digital transformation of higher education. It’s time for universities to harness the potential of their underutilized assets and ensure long-term financial sustainability.