How To Drive Digital Business Design in Higher Education

By: Adam Carpenter on May 31, 2023
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Digital business design can help higher education institutions stay competitive by giving learners, educators, and staff the most effective tools. But the process of digital business design can be overwhelming. Which processes should you target for digitalization? And once you identify your goals, how do you choose the right tools? What’s the best way to structure your strategy?

CIOs can use business capability modeling to assess their organization’s digital needs and identify areas for optimization or transformation. The use of these frameworks can help ensure that your organization stays ahead of the curve in the digital landscape. 

Using Gartner's recommendations for digital business design for higher education, we'll dig into what business capability modeling is, how to use it to develop your own framework, and some recommendations that can make the process easier and more efficient. [1]

What is business capability modeling for higher education institutions?

Business capability modeling is a method of analyzing and describing what your business does. It centers around breaking down your business’s function into parts and then understanding how all of these parts work together to help you meet your goals.

Business capability modeling is an effective tool to drive digital business design because it chunks your operations into segments, making it far easier to pinpoint the exact processes that can benefit from digital transformation. Also, you can use it to identify which groups and subgroups—students, instructors, and staff—can benefit the most, making it easier to demonstrate the ROI (return on investment) of your digitization initiative.

With business capability modeling, you get an accurate, detailed layout of what you have, what you need, and how to best use your resources. This is especially important for smaller institutions that may have fewer employees—delineating business capabilities tells each person exactly what they need to focus on. Also, because smaller educational institutions may have more limited budgets, business capability modeling can ensure that decision-makers don’t overspend on digital and physical resources.

For smaller higher education institutions, your capabilities involve those in your business model and operating model. Here’s how the two break down:

Your business model includes a:

  1. Financial model

  2. Customer model

  3. Value proposition

The operating model consists of:

  1. Value streams

  2. Resources

  3. Governance

These features combined encompass the range of a higher education institution’s capabilities.

3 tactics for using business capability modeling to drive your digital business design

To use business capability modeling to drive digital business design at your higher education institution, you can leverage the following three tactics, all of which work together to streamline and ensure the quality of your design.

1. Examine technology in your business model and its impact on your business capabilities

A good first step is to analyze how the tech trends you are thinking of adopting can impact the delivery of education at your institution. It’s also important to consider both the positive and negative impacts of technological developments. For instance, you may want to consider:

  • How you can leverage the data produced by a digitalized process. You may be able to use this data to enhance current offerings or even develop new products that support learning or communication with instructors and students.

  • The impact of digitalization on your marketing efforts. Can you use digital channels more fully? Simultaneously, could this put you at a disadvantage, particularly if your competition is more advanced when it comes to digital marketing?

  • The degree to which digitalization will impact your existing capabilities, as well as opportunities it may open up for new capabilities. For example, will digitalizing a process performed by student volunteers eliminate a program that helped weave students into the fabric of your institution?

  • The extent to which digitalization may make existing systems of service delivery obsolete. A manual process may take so long to complete that it makes more sense to replace it with an automated one—even if that means extensive or changing roles and job descriptions.

2. Review your business strategy to develop your business capabilities

Your business strategy consists of the how and what of your plan. It outlines the steps you’ll take to meet your digital business design objectives. This makes it far more than just a series of action steps. Your strategy also has to consider the nuances involved in ensuring your institution can overcome challenges within your local ecosystem, as well as those that may arise as a result of any changes made.

These challenges may include outdated network resources or other technological infrastructure. They can also involve preventing staff from feeling alienated or like they’re being “replaced” by a digital process.

Questions to ask

For example, is it best to hire people internally to execute your digital strategy or hire a third-party provider that specializes in that kind of transformation? On the other hand, can you train your internal staff so they can meet your implementation goals?

It’s equally important to set up key performance indicators (KPIs) that you can use to evaluate the success of your initiatives. These can accompany milestones and benchmarks that give you an objective view of your progress.

Questions to ask

Another crucial consideration is the effect your strategy may have on current programs or projects. Will it make any of them obsolete or redundant? Will your digital business strategy inevitably pull financial resources away from other initiatives? If so, how can you communicate that, raise more funds, or adjust your implementation to fit budgetary constraints?

To illustrate, suppose your college wants to incorporate virtual guided tours as a part of new student orientation. Each student would get access to an app that would provide them with written, spoken, and video presentations regarding important landmarks on campus and places they need to be familiar with, such as the bursars or financial aid office. Your solution puts control of each student’s orientation in their hands, allowing them to do it on their own time and uncover their own treasures.

But you have to ask how this may impact the current orientation experience from several angles.

  • You currently have upper-level student guide tours, providing them with a chance to hone their presentation and social skills. What happens when you essentially digitize their work? Can you adjust for this by providing them with other opportunities?

  • How much will your initiative cost, and where will these funds come from?

  • If the price tag is steep, how can you justify the spend, and can you present creative funding options to decision-makers?

Reviewing your strategy in this way is an effective method for anticipating stubborn challenges and concerns that stakeholders may raise.

You’ll also want to keep in mind the broad range of people your strategy could impact. This is particularly important when working in an educational ecosystem. Even if your direct includes a portion of the faculty or certain students, others, such as support and office staff, may be impacted as well. By including everyone’s concerns in your business strategy review, you increase the chances of your ideas being embraced by the community.

3. Evaluate the institution’s operating model to determine how to operate your business capabilities

The operating model includes how the institution combines processes, people, structures, and assets to get things done. It typically breaks down into three primary components: governance, resources, and value streams.


Includes the protocols and methods your institution uses to manage performance, as well as financial issues and who’s responsible for which decisions.


Include the structure your organization uses to manage talent and technological tools, both internal and external.

Value streams

Refer to the ways your operating model delivers value to stakeholders.

For instance, suppose you want to provide students with a digital assistant that can . This could involve the following considerations:

  • Governance: How will student data be stored, for how long, where, and what encryption protocols will you use? How will you pay for the system, ensure its uptime, and who will decide when and how to make improvements to it?

  • Resources: What adjustments to your current network would you need to make to ensure smooth operation, even during peak usage times, such as during registration or final exams? To power the system, do you want to use an existing proprietary AI language model, create your own, or use an open-source solution?

  • Value streams: How will you ensure students actually use the system? How will you monitor usage rates? And, of course, how can you quantify your ROI?

By segmenting your operating model into governance, resources, and value streams, you avoid getting buried in a pile of uncategorized questions. Rather, you get three buckets you can toss each challenge into—and then design a team to handle the contents of each bucket.

Key considerations for your digital transformation

If you’re a CIO planning how you will execute a digital transformation using business capability modeling, you may want to keep the following in mind:

  • How you’ll engage in conversations with executives about the impact of the changes and their implementation. You’ll want to focus on the value that comes with an improved system and how executives will be able to observe and measure the benefits.

  • How you’ll explain the risks and benefits as they impact all stakeholders. These may include students, faculty, staff, executives, donors, and board members.

  • The ways in which your digital transformation will directly impact the institution’s higher-level goals. For example, if a university has set its sights on increasing the number of international student graduates, you may want to think about what these students expect and how your digitalization can best support their journey.

Regardless of the system or processes you’re endeavoring to digitalize, these considerations will come into play, but the answers will vary considerably. For example, the benefits you outline to executives for an automated application system will be very different from those associated with a student feedback management solution.

Leverage capability frameworks while driving digital change

By outlining your current and future capabilities in the context of a digital business design, you craft a concrete roadmap for success. When you consider the institution’s systems and people ahead of time, you make it easier for stakeholders to give an enthusiastic thumbs up, enabling you to guide your organization into a more digital future.

If your digital transformation plan includes student information systems, check out Modernize Higher Education with a Student Information System.