Artificial Intelligence

Rethinking Tertiary Education: Preparing for an AI-Powered Future

Australian universities face shrinking growth and rising student expectations. To stay competitive, they must modernise with AI-enabled platforms.

Michelle Gillespie

Higher Education Principal Industry Advisor

Workday ANZ

In this article we discuss:

Australian universities are losing a major growth driver. For decades, international students have been the financial engine that sustained local institutions. Now, with shifting government policies, managed growth targets and tighter immigration rules slowing that engine, institutions must compete harder for domestic students – who have shifting expectations of what higher education should look like.

Students of the Future

Today’s students were born into a digital world. Gen Alpha grew up watching Peppa Pig on their parents’ iPhones. And now they’re entering a university with the same systems I was using 25 years ago.

Ok, the systems have had some minor enhancements, but they’re mostly not natively mobile or AI-enabled. Often, students still have to grapple with outdated portals and clunky enrolment tools. It’s a far cry from the seamless, mobile-first, intelligent interactions these young people experience in almost every other aspect of their lives.

Offering a seamless, smart digital experience isn’t just a nice to have – it will soon be an entry-level requirement supporting enrolment, retention and reputation.

If universities want to be competitive, then creating modern, engaging, AI-enabled experiences must be a top priority. Especially now the Australian Government’s Universities Accord has set ambitious participation targets, urging institutions to attract more students from low socioeconomic, Indigenous and disability backgrounds. At the same time, it is bringing in hard caps and managed growth targets, creating an uncertain and complex funding environment for all.

Attracting and retaining these students takes personalised customer journeys with tailored support – the sort of service provision that can only be offered cost effectively through automation and AI.

Offering a seamless, smart digital experience isn’t just a nice to have – it will soon be an entry-level requirement supporting enrolment, retention and reputation. And the investment will be worth it. Just as businesses know it costs more to acquire a new customer than retain an existing one, keeping a student engaged is more cost-effective than replacing them. Retention has never been more important.

Systems of the Past

Most Australian universities are running systems designed long before AI, mobile computing or cloud, which are becoming increasingly expensive to maintain. This means institutions trying to deliver great research and great teaching are having to divert money into keeping really old software running.

What’s needed is a step-change: modern, agile platforms designed for the digital era, with AI built in to support decision-making and automate manual work.

The risk isn’t just related to cost and security. With legacy systems, when government policy changes, institutions often wait weeks for coders to rewrite systems. A change to reporting requirements, visa compliance, student support obligations or funding models can trigger a cascade of manual interventions. IT teams raise tickets, vendors scope the work, programmers code custom fixes – and staff scramble to adjust processes while they wait. And wait. And wait.

This lag creates real risk. Policy settings can shift overnight – as we’ve seen with Ministerial Directions affecting international student caps, TCSI changes, new funding rules or rapid pivots to online learning. Until the system update arrives, staff are left in the lurch, relying on spreadsheets, workarounds and late nights to stay compliant. It’s an inefficient and stressful cycle. All of this at a time when universities need their staff focused on creating better student and staff experiences, not maintaining old tech.

Replacing 'old tech' in the cloud with a like-for-like lift doesn’t solve the problem. It risks embedding inefficiency for another decade. What’s needed is a step-change: modern, agile platforms designed for the digital era, with AI built in to support decision-making and automate manual work.

In an AI-enabled cloud-native platforms, configuration changes that once required specialist coding and testing over weeks can now be completed by AI agents that can see where changes need to be made, make recommendations for a member of staff to review, and make those changes once they’re approved in a matter of minutes.

These are not hypothetical questions. They are live challenges facing Australian tertiary education.

Questions For a Brave New World

The AI genie is out of the bottle. As it reshapes teaching, learning, testing and working, universities need to ask themselves:

What does the future of assessment look like if essays can be generated at the click of a button? For better or worse, students are already using generative AI as study aids. Traditional essay-based assessment used to be a proxy for testing critical thinking and written communication skills. But in an AI-powered world, the act of generating text is no longer proof of either. Universities need to reimagine assessment in ways that focus less on outputs and more on process, judgement, and application. This might mean shifting to real-time problem solving, project-based collaboration, or portfolio work that demonstrates how students engage with tools like AI – not avoid them.
How do we prepare students for careers that don’t yet exist? By the time today’s undergraduates retire, they may have cycled through a dozen different roles, many of which we can’t yet define. But we do know workers in most industries will need digital literacy, ethical reasoning and human-centred skills, like communication, leadership and creativity. If universities are to continue to play a critical role in workforce development, they need to expose students to emerging technologies, data-driven decision making and interdisciplinary problem solving.
What’s the value of a degree in a labour market being reshaped by AI? A degree of the future will be judged less by the transcript and more by the skills, confidence and connections it unlocks. Universities have new opportunities to position their qualifications as gateways to networks, experiences and capabilities that extend well beyond the classroom. That may mean connecting students to industry and conferring credentials that tell employers not just what someone knows, but what they can do and how they can adapt.

These are not hypothetical questions. They are live challenges facing Australian tertiary education.

Building in Resilience and Agility

Modernisation is no longer optional. Universities need to act now to redefine their value proposition for students, staff and society.

It’s time for universities to think boldly about the kind of institution they want to be now and into the next decade – and the technology foundations that will make it possible.

By embracing AI-enabled cloud-native platforms, they can:

Deliver lower-cost, higher-quality services at a time of fiscal constraint
Create student experiences that reflect the expectations of Gen Alpha and beyond
Build resilience against policy and market uncertainty
Free up resources to invest in new types of teaching and curriculum reform, rather than maintaining outdated systems

The Way Forward

Australian tertiary education is rightly proud of its global reputation. But reputation alone will not sustain institutions through this period of upheaval. Universities need the courage to ask hard questions, the foresight to invest in future-ready systems and the willingness to reimagine what sort of tertiary education is needed in an AI-powered world.

The student of the future is already enrolled at your institution. It’s time for universities to think boldly about the kind of institution they want to be now and into the next decade – and the technology foundations that will make it possible.

About the Author

Michelle Gillespie Higher Education Principal Industry Advisor Workday ANZ

Michelle Gillespie is the Higher Education Industry Advisor for Workday ANZ. She has spent more than 30 years working in leadership roles at both higher and dual sector education institutions across Australia, including the University of Melbourne and Swinburne University of Technology.

She was previously at Victoria University, where she was Chief Student Officer and Registrar. She led teams across the entire student lifecycle — from the initial enquiry to student life and graduation, as well as a range of wellbeing and academic support services.

Michelle now leverages her vast network and deep experience in ANZ to help our higher education customers address the multitude of challenges they currently face, from regulatory and cost pressures, to AI adoption and rising student expectations.

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