The best ideas in the world can easily fall off the radar unless you have a process in place for evaluating, vetting and bringing them to life.
Also in this series:
Is it Time to Launch that New Academic Program? The Art and Science of Answering that Question
Financial Modeling for New Academic Programs
Once you have generated an idea for a new academic program, how do you sustain and implement that idea?
As Jim Collins suggests in Great by Choice: Uncertainty, Chaos, and Luck—Why Some Thrive Despite Them All, organizational ‘luck’ and success can be leveraged by cultivating a discipline around process and metrics. Indeed, he suggests that this discipline is key for maximizing whatever ‘luck’ might naturally come one’s way.
This has certainly been the case at Bay Path University, where we have developed a rigorous process and template for evaluating the feasibility of new program ideas that we use across all divisions of the University. This process has enabled us to remove some of the subjectivity that accompanies new academic program decision making, relying instead on a set of objective key elements and metrics that are applied equally to all new program possibilities.
When a new program is recommended, the sponsoring school or department is required to conduct a feasibility study that addresses the following checklist:
- Relationship to institutional mission
- Rationale and market niche
- Student and occupational demand
- Program description and structure
- Resource requirements
- Revenue potential and projection
Here is an in-depth breakdown of that checklist, for you to review and discuss with colleagues at your own institution.
1. Relationship to Institutional Mission
With limited resources, it is essential to consider how a new program might relate to the mission as well as extend or leverage the mission in new ways. Mission creep, i.e. diverting precious resources to efforts that detract from our mission, is just as important a concern as is missing opportunities that will enable us to expand and strengthen our mission impact.
- What is the historical context for this type of program?
- How does this new program reflect and/or further leverage current missional elements?
- How does this new program relate to and/or further leverage existing curricular offerings?
- How might this new program fit with and/or impact the culture of our institution?
2. Rationale and Market Niche
Addressing the ‘why?’ question may be the single most important question to get right when considering the merits of a new program possibility.
- Why should we do this?
- What is most compelling about this possibility?
- Why does this program deserve to exist on our campus?
- What market niche will it fill and for whom?
- What evidence can we find of a need and/or a gap in the market for this program?
- Who else offers something like this?
Answering these questions requires digging deep to understand the potential market context for your new program. At minimum, it is important to gather data about the competition and to understand how your program might best be differentiated from existing programs. For every new program recommendation, the feasibility study requires a program competitor analysis that includes the following information:
| COLLEGE OR UNIVERSITY NAME | College A |
|---|---|
| Program name or degree title | |
| Program emphases & distinctiveness (what is unique about this offering?) |
|
| Tuition & fees | |
| Total credits required | |
| Mode of delivery | |
| Geographic market | |
| Current enrollment |
3. Student and Occupational Demand
In considering a new program possibility, it is important to develop a clear sense of who the program will serve. Such information can be gleaned through the competitive analysis you conduct with existing programs — or through focus group or survey research that you conduct with prospective students. For example, when we were considering launching our M.S. in Nonprofit Management degree, we convened a focus group with nonprofit leaders in the region to gain their input on the program.
It is also important to consider the occupational outlook for jobs and careers that are related to the program under review. Such information can be obtained from professional associations as well as from national databases such as the U.S. Bureau of Labor Statistics annual Occupational Outlook Handbook.
- Who do you envision as your typical student? What demographics do they represent? What level of educational preparation will they need to be successful in this program?
- Why might someone be motivated to enroll in this program? What career, educational or personal goals might he or she have that this program will help meet?
- What is the occupational/job outlook and demand for careers that are related to this educational program?
4. Program Description and Structure
Asking new program recommenders to prepare a detailed description about the program ensures an important reality check before the proposal gets too far along in the process. By answering the following questions early on, the viability of the proposed program is very apparent to the program developers and enhancements can be made to strengthen the proposal.
- What is the educational philosophy that underpins this program?
- What are the program outcomes?
- What is the curriculum and how does it connect to the outcomes?
- How will the curriculum be structured and delivered?
- What makes the program distinctive?
- What is the intended geographic market for this program?
- Are there external accreditation or licensure requirements and if so, what are they?
- Are there existing faculty who have expertise in this area?
- Where might this program fit in the current academic structure?
New program proposals must also include a listing of degree requirements including number of credits, course descriptions and a curriculum outcomes map which illustrates the relationship between each course and the program outcomes.
5. Resource Requirements
This fifth element addresses the question about what it will take to launch and sustain the program. At Bay Path, we tend to start small in resourcing new programs, holding off on “permanent” resource investments until the program demonstrates minimum viability. All new program proposals require a four-year financial proforma that incorporates the following key resource considerations:
- How will the program be staffed? How many faculty or staff will be required? What are the qualifications and what minimum level of compensation will be required? How easy will it be to hire for this program? Are there existing faculty or staff who can support this program?
- What physical space will this program require? How much and what type of space is needed? When, where and how will the curriculum be delivered and what does this mean for physical space needs?
- What equipment and technology is needed?
- What library and other learning resources are required and how will they be delivered?
- What will it cost to successfully market and recruit for the program?
- Are there resources already in place that could be tapped in support of this program?
- What demands will this program place on the institutional infrastructure that will result in additional costs to be assigned to this program?
6. Revenue Potential and Projection
Finally, the proforma also incorporates key revenue assumptions, which when reviewed in tandem with the other elements provides us with a good understanding about what it will take for this program to be financially viable. In determining the potential revenue flow for this program, several important questions are considered:
- What is the appropriate price point for this program?
- How many credits will be required?
- How will the curriculum flow, and how much revenue is projected to be generated each session or year?
- Will the tuition need to be offset by scholarships or discounting of any kind?
- Are there additional expenses needing to be offset?
- What is the anticipated annual net contribution?
Conclusion: Combining Rigor and Flexibility
When developing and launching new academic programs, it is impossible to capture all variables on the front end. Until the program is up and running, you never truly know how the market will respond and what this will mean for your program’s viability.
However, having a discipline around new program development ensures that we consider as many as possible “what-if’s” on the front end, while maintaining a culture of flexibility and market responsiveness once the program is launched. At Bay Path, the key to our success has been to start small, investing conservatively on the front end. Once we see that the program is financially sustainable, we grow fast. We build as we go; we continually review and adapt.
