BASED ON THE VALUE CHAIN MODEL
   Antonis C. Stylianou, Walter L. Turner, Department of Information & Operations Management, The Belk
    College of Business Administration, University of North Carolina at Charlotte, NC 28223 704.547.2064

                      ABSTRACT                                While use of technology is rampant in society, it has not
                                                              yet infiltrated all classrooms and curricula. In fact, the
While much has been written about Michael Porter's            technological gap between industry and academia seems
Value Chain model as applied to business, not much has        to be widening. Use of technology in the infrastructure
been said about its applicability to academia. As the 21st    of academia, while much improved over the last ten
century approaches, many factors such as discriminating       years, is less than it could be and perhaps less than it
shoppers, rising costs, rapid advances in information         should be. However, technology's rapid rate of change
technology, and the possibility of increased regulation are   makes practical application expensive, introduction and
causing turmoil in academia.                                  management difficult, and the rate of return questionable.

In this paper we apply the Value Chain model to               The lack of technology in many graduate curricula
academia and examine how, by taking advantage of IT,          ensures that newly graduated professors are often not as
academia can forge new strategies that can lead to            technologically adept as their predecessors. Therefore,
competitive advantage. Our research has expanded the          "few faculty have the technological expertise to deliver
Value Chain model into a model termed "IT Advantage           the benefits of education technologies to their students."
Assessment Model" which adds the necessary detail for         [2] Quite often this situation does not improve as the
application of the Value Chain model to academia. The         graduate enters academia, because staying current with
results indicate a great advantage in applying this type of   technology consumes greater amounts of time as the rate
analysis to academia.                                         of change and the plethora of options increases. Small
                                                              colleges, in particular, can not afford to keep up with
                   INTRODUCTION                               technology. In fact, professors in small colleges are often
                                                              not given the necessary release time to stay current in
With the advent of the 21st century, academia faces some      their fields, irrespective of technology utilization.
of its greatest challenges. Students, along with their        Inefficiencies resulting from the lack of technology
parents, have become discriminative shoppers--                deployment often translate into higher costs for staff and
dramatically increasing the competition between               faculty, resulting in a higher price for students.
institutions of higher learning. Aided by information on
the Internet, students are now able to shop for the best      Traditional funding sources for academia are
educational "package." Armed with this information,           disappearing.     Given limited funds and the other
some students are able and willing to pit institution         challenges cited above, what should the objective of
against institution in a bidding contest. At a time when      administrators be with regard to the deployment and
college costs are high and continuing to rise [10],           utilization of technology? Can strategies be derived for
students and their parents want proof that they will          the effective use of technology? Will deployment of
receive value from their investment. State legislatures       technology increase costs or reduce costs, and will it add
are also concerned with the rising costs associated with      value?     While much has been written about the
attending college. As a result, they are discussing options   application of Porter's Value Chain Model to the business
such as limiting tuition increases and requiring academia     world [1,7,9], very little has been said about its
to better manage costs. [10] In light of the above,           application in the world of academia. Our research has
distance education is beginning to make an impact. [4]        resulted in an expanded model called the "IT Advantage
                                                              Assessment Model". This new model, while general in
Distance education, a form of spatial disintermediation,      nature, was applied specifically to academia with good
can be defined as the use of "video conferencing,             results.
personal computers, telephones and the Internet to reach
people unable to get to traditional classrooms". [5]. Soon                        BACKGROUND
there will be competition, not only from local academic
institutions, but from institutions half a continent or       Porter and Millar [8] define the activities of an
perhaps half a world away.                                    organization that add value, viewed along with the
                                                              activities of the organization's suppliers and buyers, as a
"Value System." The traditional value system for               Table 1: Player's Involvement in Value Activities
academia is shown below in Figure 1.
                                                                     Value Activities                               Players

                                                                                                                                      Graduate schools

                                                                                                                                                                      Non-profit sector
                                                                                                                     Adult students

                                                               Admissions                      X          X         X
                                                               Student recruitment             X          X         X                 X                  X            X
                                                               Internal communications
Porter and Millar [8], in what is now referred to as the       Internal collaboration
"Value Chain Model," have defined five steps to assess         External collaboration          X                                      X
the advantages of information technology. These steps          Fund raising                    X          X         X                                    X            X
are listed below:                                              Information dissemination       X
1. Assess information intensity;
2. Determine the role of IT in the industry structure and      Marketing                       X          X         X                                    X
     its impact on the five competitive forces;                And many more . . .
3. Identify and rank the ways in which IT might create
     competitive advantage;                                   Three of the value activities, Accounting, Classroom
4. Investigate how IT might spawn new business; and           Instruction, and Admissions were selected for application
5. Develop a plan for taking advantage of IT.                 of the other substeps of the model. Shown below in
                                                              Table 2 is a partial list of the resulting IT functions with
     IT ADVANTAGE ASSESSMENT MODEL                            Linkages for the Classroom Instruction.

In our research, Porter & Millar's steps have been adapted          Table 2: Value Activity - Classroom Instruction
in order to provide a more detailed methodology for                   Physical Tasks                 IT Functions
identifying value activities, potential linkages and               Handout assignment         Provide multimedia
information technology applications. The result is what        1                              interactive assignment
we call the IT Advantage Assessment Model which                                               accessible from
consists of Porter's original five steps along with our six                                   anywhere in world via
substeps that further define how to accomplish the                                            web
strategies of the Value Chain Model. The substeps in the       2   Take attendance            Students run ID through
IT Advantage Assessment Model were developed from                                             scanner or assist in
application of the original Value Chain Model to a                                            fingerprint analysis for
variety of industry settings. The substeps provide the                                        distance education
necessary details to accomplish this process in a practical    3   Pickup assignments         Interactive web-based
manner. The substeps are listed below:                                                        assignments with scoring
•   Identify players and their roles.                              Display transparency       View graphics on laptop
•   Identify value chain activities.                           4                              in any classroom or out
•   Identify the player's involvement in the value chain                                      on lawn via cellular net
    activities.                                                                               or via the Internet.
•   Identify the IT functionality to apply to each value                                      Interactive annotations
    chain activity.                                            5   Have a group discussion Video conferencing,
•   Formulate strategies for IT and prioritize.                                               chatrooms, threaded chat
•   Conduct interviews and review external strategies to                                      discussion
    validate strategies.
                                                              Application of our model to academia resulted in twenty-
A subset of the results of identifying player's involvement   seven strategies for adding value through application of
in value activities for academia is shown below in Table      IT to academia. These strategies were then validated
1. This table also depicts a sampling of the results of       against strategic plans from various institutions as well as
applying the 1st two substeps of the IT Advantage             through interviews with CIO's at various institutions.
Assessment Model.                                             Two representative IT strategies are shown below in
                                                              Table 3.
          Table 3: Representative Strategies                 What's at stake? Chantal da Silva [3], V.P. External
         Strategy          Description/Comments              Affairs, Students' Society of McGill University, said it
                                                             best in her report to the Canadian government: "A well-
 Provide distance         Once the infrastructure is
                                                             educated population is a prerequisite for both economic
 education options for    in place to project classes
                                                             growth and societal development... Education encourages
 selected classes         over distances, the
                                                             democracy by creating a literate and knowledgeable
                          incremental costs per class
                                                             population, lowers crime rates, and decreases dependency
                          to do so are small. Then a
                                                             on health and welfare programs... Education is an
                          host of side issues arise
                                                             investment in our future."
                          such as ownership of class
                          contents and simple things
                          such as grading in a
                          distance education
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                                                                 the Road of Electronic Commerce -- A Business
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                                                                 Value Framework, Gaining Competitive Advantage
 holdings                 used in a greater variety of
                                                                 and Some Research Issues." March 1996.
                          circumstances and by a
                          greater number of
                                                                 .htm> (Accessed: 9 Sept. 1998.)
                          students, especially those
                                                             [2] Cox, Brad. "Plan for a New University." Mar. 1998.
                          involved in distance
                                                                 (Accessed: 4 Dec. 1998.)
                                                             [3] da Silva, Chantal. "Proceedings of the Standing
                                                                 Committee on Social Affairs, Science and
                    CONCLUSION                                   Technology Subcommittee on Post-Secondary
                                                                 Education"        Apr. 1997 <http://www.parl/gc./
Application of Porter's "Value Chain Model" to academia
can be accomplished in a step-by-step manner. The
                                                                 (Accessed: 2 Oct. 1998.)
various strategies developed provide overall admin-          [4] "Distance Education in Higher Education
istrative guidance without becoming mired in the                 Institutions." U.S. Department of Education. October
mendacity of analytical detail. Those involved in the            1997.
details of analysis may find the methodology employed to     [5] Hudson, Neff. "Get Wired to Your Choice of
be of interest. Results from the analysis can be used to         Schools." Army Times 58,no16:E6 <http://www.
focus and improve the academic "business" through
improved efficiencies, and can increase the value added
                                                                 /reccount=73/startrec=1/ft> (Accessed: 16 Sept.
while expanding growth possibilities through additional
derived linkages.
                                                             [6] Kobulnicky, Paul J. "Critical Factors in Academic IT
                                                                 Planning." Proceedings of CAUSE98, an EDU-
The research contained herein also suggests that an
                                                                 CAUSE conference (Dec. 1998): <http:/www.
examination of the products of academia may be in order.
While some may argue that the output from academia               (Accessed: 04 Dec. 1998).
(the "product") is a graduate or a degree, it can be seen    [7] McFarlan, F. Warren. "Information Technology
from our research that possible products categories
                                                                 Change the Way You Compete.” Harvard Business
include: degrees, training, information, public service,
                                                                 Review (May-June 1984): 98-103.
and culture. Each potential "product" carries its own
                                                             [8] Porter, Michael E., and Victor E. Millar. "How
value chain and can, in turn, make its own contribution to
                                                                 Information Gives You Competitive Advantage."
net revenue.
                                                                 Harvard Business Review . July-August 1985: 149-
With the current societal forces at work, academia does
                                                             [9] Rayport, Jeffrey F., and John J. Sviokla. "Exploiting
not have a choice with regard to change. Academia must
                                                                 the Virtual Value Chain." Harvard Business Review .
begin to consider itself a business and formulate IT
                                                                 November-December 1995: 75-85.
strategies to pursue those goals and objectives that
                                                             [10] "Straight Talk about College Costs and Prices:
increase the effectiveness of the overall strategy chosen        National Commission on the Cost of Higher
for each individual university or college. Or, in the            Education-Final      Report."    21     Jan.   1998.
words of Kobulnicky [6], "if we are to begin to make
progress in transforming our institutions through the use
                                                                 Comm_Report98.html > (Accessed: 03 Oct. 1998.)
of information technology then we must create
environments where investments in information
technology are derived from a more comprehensive plan
for achieving academic excellence."

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