The higher education sector in the UK stands at a critical juncture. Financial pressures are mounting as institutions grapple with constrained budgets, rising costs, and reduced access to EU funding.
The situation is so severe that a fresh report published by the Office for Students (OfS) predicts that up to 72% of UK universities could be operating at a deficit by 2025/26, with 40% having fewer than 30 days of liquidity.
What little funding our vital universities have is being carved into wafer-thin portions and split to deliver as many requirements as possible. For so long, IT infrastructure has been under-resourced, and we’re now operating in an era of technical debt that is constantly being deepened by legacy IT architectures and siloed operations.
Now, more than ever, digital transformation isn’t just an option for universities; it’s a necessity. In this article, I explore how this transformation can help universities navigate the financial and operational challenges they’re facing.
In a pool of multiple priorities, where does technology stand today?
The challenge here is an obvious one. Universities have often withheld investment in technology simply to manage cash flow, reduce costs, and “keep the lights on”. The constant pressure to maintain and develop facilities to remain attractive to national and international students has constantly eaten into budgets.
As a result, university leaders have found themselves on a hamster wheel. Higher education institutions remain operational, doing what they need to in the moment, but in a digital-first world, the technology doesn’t align with the expectations of students or staff.
The inability to invest adequately in technology risks undermining the global competitiveness of UK universities in research and education delivery. The recent announcement of a modest tuition fee increase starting in 2025/26 is unlikely to provide substantial relief because of concurrent cost increases like National Insurance hikes.
Many universities in the UK depend on a patchwork of legacy systems running outdated software, limiting their ability to integrate modern learning tools and applications. These legacy IT systems have become a resource-intensive burden, and substantial investments are needed to keep them running.
Adding to these pressures, attracting and retaining talent presents another challenge. Salaries in higher education are not always competitive, restricting access to the best talent and making institutions dependent on external consultants.
This is the reality universities face going into 2025. Legacy systems cannot be addressed overnight.
The public sector — not just education — remains heavily reliant on management consultants to plug gaps left by hiring challenges. Fees paid in this direction reached record levels, driven, in truth, by short-term necessity.
While this can be a value-for-money approach, it is essential to ensure consultants help build long-term capabilities that enable universities to move forward under their own steam.
If nothing is done, the gap between well-resourced universities and others will widen. While the former will continue to thrive, those with fewer resources will fall further behind. This reality underscores the urgency of adopting a long-term vision for digital transformation and creating an actionable roadmap of improvement priorities.
When advising universities, we encourage a focus on two key areas: enhancing the student experience and infrastructure maintenance efficiency. By addressing these priorities, universities can not only cut operational costs but also create systems that empower staff and attract students.
Enhancing the student experience
All students expect seamless, high-quality digital services both on campus and online. A 2023 survey found that upgrades to platforms and systems ranked highest on students’ list of priorities, with 71% citing digital technologies as fundamental to their education.
By investing in digital tools that meet these expectations, universities can attract and retain students for the duration of their learning journey. Digital transformation isn’t just about saving money; it’s about creating value for students and staff alike.
A modern, fit-for-purpose IT foundation is essential for enabling future initiatives. For example, updating student record systems and CRMs can centralise essential information such as exam timetables, schedules, and funding statuses. This improves both operational efficiency for staff and the overall experience for students. Modernisation of the data integration layer(s) ensures consistent data use across systems, greatly reducing inaccuracies and increasing confidence in system reliability.
Two recent projects conducted by Differentis, a leading consultancy specialising in intelligent transformation and strategic advice, with two of the highest-rated Russell Group Higher Education institutions in the UK, highlight digital transformation’s tangible benefits.
Imperial College London: enhancing learning for students with disabilities through strategic IT alignment
Imperial College London recognised the need to improve support for students with disabilities, ensuring their learning experiences were inclusive, effective, and equitable. Addressing this challenge required a comprehensive approach to align IT systems and processes with the specific needs of these students.
Differentis reimagined key support workflows, crafting detailed user journeys that prioritised accessibility and inclusivity. By integrating and streamlining systems, we simplified access to resources and support, empowering students with disabilities to navigate their education more effectively.
The impact has been transformative: students now experience a more tailored and supportive learning environment, while staff benefit from reduced administrative complexity, allowing them to focus more on individual needs. By implementing a prioritisation framework for disability-focused IT projects, we ensured alignment with the university’s strategic goals, further embedding inclusivity as a core value.
Centralising support systems has maximised the impact of technology investments, creating a seamless experience for students and staff alike. This initiative demonstrates the powerful role of strategic IT alignment in fostering a more inclusive academic community.
A prestigious institution in the South West of England: streamlining IT support for seamless user experience
When a leading university in Devon considered decentralising its IT service operations into multiple units, Differentis identified a critical flaw: fragmentation would complicate support access, frustrating students and staff alike.
Instead, we recommended centralising first-line IT support to act as a triage system, efficiently directing queries to the right teams, leveraging leading ITSM toolkits and data analysis to complement first-line knowledge with actionable insights that led to faster time-to-resolution
This approach preserved a seamless user experience while reducing inefficiencies — a prime example of how thoughtful IT structuring can save resources and enhance service quality.
Digital transformation requires collaboration across stakeholders. Universities should engage with local authorities, industry partners, and other institutions to share resources and expertise.
Additionally, workforce transformation must be a priority. Investing in reskilling initiatives can help existing staff adapt to new roles, while innovative recruitment strategies can attract top talent, ensuring the sustainability of transformation efforts.
The UK’s higher education sector faces significant challenges, but the opportunity for transformation has never been greater.
By focusing on enhancing the student experience, modernising infrastructure, and leveraging emerging technologies, universities can create lasting value for students, staff, and their communities.
Digital transformation is not just about cutting costs; it’s about building resilient systems that enable institutions to thrive. With bold leadership, strategic investments, and a commitment to collaboration, UK universities can navigate today’s financial pressures and secure their place as global leaders in education and research for decades to come.
