UMUC Plans to Create a Company to Help Colleges Harness Big Data

The Maryland Board of Regents on Friday approved the University of Maryland University College’s request to create a for-profit business-intelligence company. The new company will offer data-analysis technology and services to universities across the country, and the revenue will go toward the university’s endowment.

The company, called HelioCampus, will provide two main services: the technology to combine and analyze a university’s data, as well as analysts to help administrators understand what the data mean.

“The market as it currently stands has some very traditional software tools,” said Peter C. Young, UMUC’s senior vice president for analytics, planning, and technology. “You buy software licenses, you pay for very expensive implementation. Fundamentally, you’re doing your own thing.”

UMUC, an online-only arm of the University System of Maryland, was an early leader in online education, but in recent years it has struggled. The university has strong ties to the military — about half of its enrollments come from members of the military and their dependents overseas — but a smaller U.S. military presence abroad has caused UMUC’s overseas enrollments to drop. And as the economy has improved over the last few years, and more prospective students have entered the job market, domestic enrollments have also fallen. In 2012 the university’s president, Susan C. Aldridge, resigned with no explanation. And last year the university laid off 70 employees.

“We’re a nontraditional school,” Mr. Young said. “We have to earn our tuition revenue each year by enrolling students on a continuous basis.”

UMUC credits its analytics team with building the tools that pulled the university out of its enrollment slump. Now it’s hoping to use those tools to generate revenue.

“We know what data is valuable and what data is not,” said Darren Catalano, UMUC’s vice president for analytics. Most colleges aren’t using their data effectively, he said, and the ability to understand your own data “is no longer optional in higher education.”

HelioCampus will gather data from throughout an institution and compile the numbers into a series of dashboards, which include information like tuition revenue, retention and graduation rates, and prospective-student data. Once the numbers are compiled, an analyst will help the university find what it needs.

The most valuable part of the new company, Mr. Catalano said, is its ability to combine data from across an institution. If a university wants to identify unsuccessful courses, for instance, an analyst would look for those with high enrollments but low completion rates. Or if a university is trying to improve one-year retention rates, an analyst might identify the students who succeed, and then look at where those students are from or why they were initially attracted to the university.

“There’s no silver bullet to improve retention and graduation rates,” Mr. Catalano said. “What this product provides is the ability to identify pockets of opportunity.”

Mr. Catalano will serve as HelioCampus’s chief executive. Along with the rest of UMUC’s analytics staff, he will leave the university to work at the new company. “It will have its own Board of Directors, as any private company would,” Mr. Catalano said. “It just so happens that the sole shareholder will be UMUC.”

UMUC hopes the new company will diversify the university’s revenue and help fund an endowment that would provide scholarships for graduates of Maryland community colleges. If HelioCampus succeeds, said a university spokesman, Bob Ludwig, the scholarships could lessen “or even eliminate” the cost of a degree for community-college graduates.

The University System of Maryland’s chancellor, Robert L. Caret, said in an interview that he supports UMUC’s decision and believes that other institutions will benefit from the company’s services. “The product is something that many need — including the Maryland campuses,” he said. “If made available and known to them, I believe they’d really make use of that opportunity.”

The university will provide funding to support HelioCampus’s first five years of operation; eventually, it may consider either selling the company or going public.

“Strategically speaking,” Mr. Young said, “UMUC does not necessarily want to be in the business of running companies forever.”