The higher education sector has a digital transformation problem

Despite big investment in digital transformation, universities are struggling with outdated legacy technology, fragmented digital ecosystems, and personalization.

According to a new study on the digital readiness of higher education institutions from Tata Consultancy Services (TCS), more than six-in-ten universities (61%) remain in the “evolving” stage of digital maturity, despite significant recent investment in transformation initiatives.

Nearly nine-in-ten (88%) universities view technology as supportive or a core enabler of innovation and adaptability, with student experience now a top strategic focus.

Institutions are allocating 29% of their IT budgets to digital student experience and 19% to digital transformation, with AI and machine learning, student engagement platforms, and cybersecurity topping future investment priorities.

Despite financial constraints, low alumni engagement, and regulatory compliance challenges, nearly 80% of education leaders are optimistic about future institutional growth.

“The higher education sector is built on knowledge, innovation, and the promise of transformation," said Ankur Mathur, VP and head of TCS's education unit.

"Today, that foundation is being redefined by digital technologies, where AI, analytics, and cloud platforms enable institutions to deliver personalized experiences, improve operational agility, and make data-driven decisions at scale."

Digital maturity is still evolving

Notably, while eight-in-ten university leaders are optimistic about growth, 57% describe their digital proficiency and 55% their digital student experience as “evolving".

Researchers said that shows there's significant room for improvement. Email emerged as the dominant communication channel, followed by web portals and chat platforms.

Most universities said the biggest challenge to student experience was a fragmented ecosystem, resulting in complex administrative processes.

Meanwhile, the biggest barriers to new technology were budget constraints, followed by scalability and flexibility, legacy systems or infrastructure and resistance to change or change management issues.

Leaders also cited data privacy and security concerns, lack of in-house technology skills, lack of a strategic vision, and vendor-related concerns such as dependence, lock-in, quality, reliability and continuity.

Emerging focus areas

AI and machine learning were the top investment priorities, the study found. There were high adoption rates for digital student registration (96%), financial services (94%), and library resources (83%), with cybersecurity, learning management systems, and online learning capabilities widely implemented.

There were lower rates of adoption, though, for student wellness and health services (57%), career services (64%), and housing and accommodation services (64%).

Only about a third (35%) said technology was a core enabler to organizational responsiveness and adaptability, with 53% saying it was only somewhat supportive, thanks to budget limitations, integration challenges, and staffing gaps.

Alarmingly, 11% felt technology was a limiting factor and 2% said they were just beginning to explore its strategic potential.

"Universities that harness AI and advanced analytics are becoming more agile, able to pivot quickly in response to volatile environments and shifting demands," said Mathur.

"These technologies empower educators to personalize learning, streamline administrative processes, and foster deeper engagement, creating seamless, inclusive, and resilient experiences for students."

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