The scale of this problem varies quite a bit based on institution type and based on the primary sources of revenue for the institution. A medium size two year institution has a very different (lighter) organizational structure from a large four year residential institution. In general, emphasis on the full featured residential experience leads to more "programs" (product bundling) and more administrators to run those programs. This might not be a bad thing especially for endowment driven institutions that have chosen a high cost strategy. These schools can afford to pay the large number of administrators and pay their faculty well pretty much without trouble.
The problem truly arises with the second tier of institutions that are trying their best to "keep up" with first their peer institutions and then the top tier in the US News rankings. Their budgets are generally more tuition driven which starts to put some constraints on what is possible. These schools build the same expensive high touch programs and resources to attract the best students and try to keep up in the rankings. Higher ed is like a school of fish - everyone wants to swim together but only a few really have the money to do it. This is where the cracks in the model really start to show.
There are definitely opportunities for disruption and change in higher ed. Intelligent application of technology both to teaching and learning and to the other elements of the current bundle (research, certification, etc.) will lead to disaggregation and (probably) reduced employment for higher education administrators. The wildcard is how accrediting organizations will respond to the changes on the horizon. They act as a brake on innovation, and since most federal and state funds are tied to accreditation, institutions are loath to change too quickly.
The problem truly arises with the second tier of institutions that are trying their best to "keep up" with first their peer institutions and then the top tier in the US News rankings. Their budgets are generally more tuition driven which starts to put some constraints on what is possible. These schools build the same expensive high touch programs and resources to attract the best students and try to keep up in the rankings. Higher ed is like a school of fish - everyone wants to swim together but only a few really have the money to do it. This is where the cracks in the model really start to show.
There are definitely opportunities for disruption and change in higher ed. Intelligent application of technology both to teaching and learning and to the other elements of the current bundle (research, certification, etc.) will lead to disaggregation and (probably) reduced employment for higher education administrators. The wildcard is how accrediting organizations will respond to the changes on the horizon. They act as a brake on innovation, and since most federal and state funds are tied to accreditation, institutions are loath to change too quickly.