Sharpening Our Vision: Exploration of the AAA's Possible Future Roles AAA Annual Meeting Monday, August 5, 2013 Anah

1. Sharpening Our Vision: Exploration of the AAA's Possible Future Roles AAA Annual Meeting Monday, August 5, 2013 Anaheim CA

2. Thanks to the Broad Participation • Mike Diamond – past president and volunteer leader • The Board • Council • Task Forces

3. Agenda • Our path • Overview of the changes facing higher education • Overview of our process • Insights from Council • The time is right: One-Time Opportunities • The journey: Task force reports • Where we are – and where we’re going • Feedback? Questions? Insights?

4. Overview Mike Diamond Past President of the AAA University of Southern California

5. Why are we’re doing this?

6. The challenge: a rapidly changing educational environment ripe for “disruptive innovation” Two key elements as relates to higher education • Technology • Business model disruption

7. Technological Forces “Technology is doing to education what it’s done to countless other industries: disrupting it.” -- Victor Hu, Goldman Sachs Stanford U. President John Hennessy on online education: “There’s a tsunami coming.”

8. …a Technology is changing the way our students learn…and courses are delivered

9. Bain/Sterling white paper conclusion “Higher education in the United States is at a tipping point. In its time of need, the leaders of our colleges and universities have a tremendous opportunity to reshape and reinvent an industry…” • The Financially Sustainable University, July 2012 Source: www.thesustainableuniversity.com

10. VALUE PROPOSITION RESOURCES PROFIT FORMULA PROCESSES Business Model Disruption Christensen, et al Disrupting College (simplified)

11. From Society’s Perspective Their Tuition The Value of their Degrees

12. From the University’s Perspective:Their profit model > + + < Tuition Income Public Funding Their Costs

13. Headline: July 23, 2012 US Higher Education at ‘Tipping Point’ with One-Third of Schools Financially Unstable “The data is clear: A growing percentage [currently about 1/3] of our colleges and universities are in real financial trouble.” • The Financially Sustainable University, July 2012 Source: www.thesustainableuniversity.com

14. Reducing University Costs? • Inefficiency is part of it – but not all • Economies of scale? • Increasing volume? • To manage means reducing complexity • Changing the model means changing the value proposition • MOOCs, for example Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012

15. Raising Tuition? • Increasing the real price decreases access • Decreasing access reduces opportunity – bad for society • Increasing the real price is causing rapid growth in student loans • We are in trouble with tuition! Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012

16. VALUE PROPOSITION: CHALLENGE FOR HIGHER EDUCATION • We’re facing complaints • Growing demand for demonstrable outcomes • Government spending scrutiny • Students and families concerns with increasing tuition • We must increase value • What we teach: Move beyond algorithms • How we teach: Use emerging, proven techniques Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012

17. INNOVATION IN PROCESSES • Competency-based education • Defined by panels of experts • When you display the competency, you earn the credit • Changes time to degree • Enables transfers, comparisons • Western Governors University • Bologna Process Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012 Photo by EarthLED and used under the Creative Commons license. Photo is available here: http://www.flickr.com/photos/62324368@N06/5927652703/sizes/z/in/photolist-a2NLCF-9FUj2C-9FUu6f-9FRkyB-9FUxfu-9FRxZc-dDYcwN-9YGXqC-9YGYSA-9YGXAj-9YE5ix-9YGXjY-9YE3Ye-9YE3TP-9YGY9w-9YE4yr-9YGYGE-9YGYdG-9YGXRS-9YGY4m-9YGYuq-9YGX7w-9YE54x-9YGXZf-9FVhV9-9FRnEx-9FUAfj-9FUwjf-9FRDTP-9FV3G7-agwPPw-9FSnS4-9FUrpL-9FRqei-9FUKfq-9FUQtW-9FRG2H-bMhmjx-bynDeN-bynE8b-9LDaw1-99jY9H-agwPPs-w1PKK-8HFjm6-9FRR2P-9aCWV1-4Uqv85-5K827n-5qxWLQ-c55YEj/

18. BUSINESS MODEL DISRUPTORS • NUMEROUS POTENTIAL NEW “UNIVERSITIES” • MOOCS • Available everywhere • Low cost, quality courses “taught” by famous faculty • A huge disruptor • Corporate universities • Publishers and media companies • Companies and foundations using open source materials Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012 Photo by EarthLED and used under the Creative Commons license. Photo is available here: http://www.flickr.com/photos/62324368@N06/5927652703/sizes/z/in/photolist-a2NLCF-9FUj2C-9FUu6f-9FRkyB-9FUxfu-9FRxZc-dDYcwN-9YGXqC-9YGYSA-9YGXAj-9YE5ix-9YGXjY-9YE3Ye-9YE3TP-9YGY9w-9YE4yr-9YGYGE-9YGYdG-9YGXRS-9YGY4m-9YGYuq-9YGX7w-9YE54x-9YGXZf-9FVhV9-9FRnEx-9FUAfj-9FUwjf-9FRDTP-9FV3G7-agwPPw-9FSnS4-9FUrpL-9FRqei-9FUKfq-9FUQtW-9FRG2H-bMhmjx-bynDeN-bynE8b-9LDaw1-99jY9H-agwPPs-w1PKK-8HFjm6-9FRR2P-9aCWV1-4Uqv85-5K827n-5qxWLQ-c55YEj/

19. BUSINESS MODEL DISRUPTORS • Accreditation makes entry difficult – for now • Lack of some input requirements • Competency-based outcomes OK now for accreditation • Likely to be more institutions accredited on outcomes soon – offering essentially free degrees Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012 Photo by EarthLED and used under the Creative Commons license. Photo is available here: http://www.flickr.com/photos/62324368@N06/5927652703/sizes/z/in/photolist-a2NLCF-9FUj2C-9FUu6f-9FRkyB-9FUxfu-9FRxZc-dDYcwN-9YGXqC-9YGYSA-9YGXAj-9YE5ix-9YGXjY-9YE3Ye-9YE3TP-9YGY9w-9YE4yr-9YGYGE-9YGYdG-9YGXRS-9YGY4m-9YGYuq-9YGX7w-9YE54x-9YGXZf-9FVhV9-9FRnEx-9FUAfj-9FUwjf-9FRDTP-9FV3G7-agwPPw-9FSnS4-9FUrpL-9FRqei-9FUKfq-9FUQtW-9FRG2H-bMhmjx-bynDeN-bynE8b-9LDaw1-99jY9H-agwPPs-w1PKK-8HFjm6-9FRR2P-9aCWV1-4Uqv85-5K827n-5qxWLQ-c55YEj/

20. CONCLUSIONS • The business model is changing • Change will not effect all institutions equally • Professional associations that represent those institutions, their faculties, and their graduates will need to move in ways that reflect that evolution Source: Adapted from work by Lloyd Armstrong, presented to Council, Nov 2012

21. Higher education in the midst of disruptive innovation AAA-specific opportunities Board commitment New council structure One time financial opportunity Commitment to fulfill our mission “To further the discipline and profession of accounting through education, research and service.” Why are we doing it now?

22. How are we doing it?

23. Our Mission: reevaluated – and we recommitted to it!

24. Our timeline: Major events in 2012-2013 With many, many conference calls and work sessions!

25. Insights from Council Pat Poli Chair of Council, AAA Fairfield University

26. The time is right - Insights from the Finance Committee Steve Moehrle VP of Finance - Elect, AAA University of Missouri – St. Louis

27. Thanks to strategic decisions and a great community… journals pages Journals and pages published by the AAA

28. When we faced challenges… we found opportunities • IPTF 1: Recognized the strategic role of “expanding knowledge” • IPTF 2: Recognized the strategic importance of our capabilities to manage partners • The AAA successfully negotiated with EBSCO • So we have a (likely) one-time opportunity to increase revenues • Continue operations • Protect a conservative “rainy day” fund • Make strategic investments to insure a strong future, even if publications change radically

29. How should we think about the publications revenues? • Revenues used to fund our current model • Approximately $2MM historically built into the budget • Budgets usually targeted to be net neutral • Require these funds to continue with the current business model Presented at the Finance Committee budget meeting, February, 2013

30. How to think about the additional revenues? • We are in a time that is • Exciting • New models • New types of IP • New audiences • Unpredictable • Range of revenue models • Thoughtful balancing of • Investments for the future • Preparation for a potential “Rainy day” ? ? Presented at the Finance Committee budget meeting, February, 2013

31. Recommendations for 2013-14 • Support a task force to explore organizational/structural alternatives • Focus on capabilities needed to be • Member value producing • Agile • Efficient • Strategic • Sustainable • Recognized this would likely require • Professional support • Face-to-face meetings • Budgeted for the task force

32. The journey –Task force reports

33. Expanding Knowledge and Idea Development Steve Kaplan Council Representative, AAA Arizona State University

34. Our Task Force Members • Christine Botoson, University of Utah, Co-Chair, • Steve Kaplan, Arizona State University, Co-Chair, • Bonnie Klamm, North Dakota State University, • RanjaniKrishnan, Michigan State University, • Elaine Mauldin, University of Missouri – Columbia, and • Steve Sutton, University of Central Florida

35. Our Timeline

38. Informing and Influencing Policy & Practice Hughlene Burton Chair-elect of Council, AAA University of North Carolinaat Charlotte

39. MODEL: Span of Influence Other Stakeholders Software firms Advisory Services Regulators FASB GASB IASB NASBA State Societies Corporate Accounting IMA Controllers, CFO’s Public Accounting Big 4 Regional Firms Smaller Firms University Administrators Deans Provosts Presidents National Global AAA Faculty Members Department Memberships? Practice Members

40. Overview of BIG Idea • Develop a AAA Center for Education, Research and Thought Leadership • Sponsor joint conferences between AAA sections and practitioner and policy making groups

41. BIG IDEA – Develop aAAA Center for Education, Research and Thought Leadership • Value Proposition • Currently there is no single place for someone from practice or policy makers or for AAA members to find information relating to academic research or educational materials. This center would promote many of the ideas provided by the individual groups inside the AAA.  By establishing a center to birth, nurture and house the ideas, the center can begin from a modest base and grow in whatever direction the challenge that lie ahead direct us. 

42. BIG IDEA – AAA Center for Education, Research and Thought Leadership • Some examples of things this Center could do • Joint Conferences with Practice and Policy Makers • Repository of Online Educational Resources (OER)– • Think Tank focused on practice / professional challenges • BIG DATA and Qualitative Analysis

43. Promote Joint Conferences • Value Proposition • Currently there are few opportunities for faculty and practicing accountants to interact. As a result, there are concerns that our research isn’t relevant because faculty don’t know enough about current issues in practice; and practicing accountants don’t have access to (or visibility of) current research to inform their efforts.

44. Promote Joint Conferences • Benefits • This would allow AAA members to partner with practice to do research and hold discussions that would be a benefit to both policy and practice.  This is also a way that we could partner with practice globally as well.  Many of the practice and policy organizations are global/international.  We could have different themes for these conferences. Also could partner with some of our AAA section journals to have publication outlets for some of the papers/research from these conferences that could be disseminated to a wider audience than can attend the conferences. This would also help with one of our other proposals to focus more academic research on relevant practical issues for policy and practice. • Suggestion for first conference – BIG DATA

45. BIG DATA and Qualitative Analysis • Value Proposition • This is one of the biggest problems facing the accounting profession today. Society faces problems with accounting for health care, federal budgets, etc.  Many of these problems relate to BIG DATA and how to analyze these large and cumbersome systems.  This would be a great place for the AAA to get involved in some important societal questions and make an impact on practice and policy makers.

46. Repository of Online Educational Resources • Value Proposition • These would be short topical video segments available to AAA/Practice for use in class or by practitioners in their training.  Created from practice and educational point of view.  Could have global reach to many users.  Free for AAA members, with some cost to others.

47. Promoting Effective LearningandAdvancing Faculty Careers Julie Smith David Chief Innovation Officer, AAA

48. Promoting Effective Learning

49. Support faculty through career services Reward and celebrate accomplish-ments Help faculty learn about future capabilities Realize faculty growth at all stages Acknowledge a wide range of contributions

50. #2 Educating the Membership Knowledge is Power! sample rec’s • Accounting Faculty of the Future Panels • Annual meeting • Midyear and regional meetings • Centers for Research Databases and/or Centers for Faculty Development and Teaching Excellence • Member/institutional empowerment