Published on 2014/10/07
The Happy Medium: On Outsourcing, Local Control and Partnering
Partnering on periphery services, in addition to keeping costs down and improving efficiency, allows institutions to focus on delivering their core mission.
For a number of years, higher education institutions have been in a squeeze. On the one hand, it’s important to maintain the unique character and traditions of our institutions. There’s value in maintaining our sense of ourselves as skilled craftspeople in an artisanal industry, perhaps one of the last remaining. On the other hand, we face the pressures all industries have faced in recent decades, and more: tightened funding, rapid technological change, an increased need for accountability, more entrants into our market and the President’s college completion agenda urging us to do a better job aligning higher ed with the nation’s workforce development needs.

In other words, our market, if you will, is evolving. Does Clayton Christensen et al.’s description of disruptive innovation in higher ed apply here or not? As they suggest, our sector is rife with complicated products/services that are expensive and inaccessible, and serve only a few sophisticated customers; however it’s being transformed into one that offers products and services that are simple, affordable and convenient afforded to many — no matter their wealth and expertise.

If we were in any other market sector, this would not be an issue. We would look to see what efficiencies were to be had, consider investing in new technology, outsource what we could and review our staffing and organizational structure. As educators, however, we resist these options. Yes, these might save us money, but at what cost to the unique education we provide our students? Pearson offers to develop and administer our classes for us, and is doing so at a couple of institutions. Virtual-TA allows institutions to outsource essay grading. Are we at this point abandoning what we see as our core competencies?

Such outsourcing or privatizing of functions has been more common and accepted in recent years, especially in non-educational areas. Aramark provides food service to 420 college campuses; Compass, through its subsidiaries, runs even more. Sodexho not only provides food services, but also building and project management services. Technology and parking services are also commonly outsourced. As Geoff Chatas, CFO at Ohio State University, noted in the Chronicle of Higher Ed, “What is our business? Our business is the business of ideas. We [at Ohio State] talked about returning to the core — teaching and learning — and developing a new funding strategy to support that. When is the last time a parking space found a cure for cancer?”

Those of us who might accept Mr. Chatas’ approach might still object to the idea of outsourcing the instruction itself. Many institutions see themselves as producing educated individuals in their own image: imagine the idea of the Yale Man, or the Wellesley Woman. In cases like those, the prospect of outsourcing anything can begin to crumble the walls of the total institution. For most of us, however, economies of scale have to be a consideration, especially because our missions require it. In many cases, we choose not to recreate the wheel in every aspect of our institutions: we rely on research carried out by other institutions and national organizations and subscribe to and trust standards laid out by professional organizations and accrediting bodies. In fact, colleges themselves created the regional accreditors and organizations such as the College Board to share resources and maintain standards. These are partnerships, if not outsourcing.

The question, then: where is the line drawn between the educational core competencies that we must keep for ourselves and those we can entrust to others? Or maybe a better question: how do we make sure that when we do hand off a part of the operations, we can feel confident it’s being done to our standards?

Some functions we need to keep close: the core competencies, but also, to some extent, the things that provide our sense of identity:

  • research (to a certain extent)
  • unique, niche academic programs
  • regional or local distinctiveness
  • anything that creates or maintains close ties with local employers or cultural institutions.

Other pieces we can let go easily without worrying we’ve watered down the program: parking, for example. I worked at one institution whose printing office was the biggest sinkhole at the college — publications went there to die. Finding a private vendor to handle our printing actually improved our ability to fulfill our mission.

More relevant than such activities that are non-essential to the core function, though, are our educational activities. But here, too, higher ed can scale its work without compromising its mission. The answer lies in part in consortia, which we have used for decades. Such groups strengthen the offerings of their institutional members. The Great Lakes Colleges Association, for example, which is made up of 13 liberal arts colleges and has as its mission “to take actions that will help strengthen and preserve our colleges.” Such partnerships can be effective among like-minded institutions, but also among partners who don’t pose a threat to one another, such as through poaching each other’s prospects.

For example, my institution is a member of two consortia, each designed to enhance our offerings in a cost-effective manner, without compromising our control of our academic standards and goals. In the first one, the Consortium for the Assessment of College Equivalency (CACE), we work with six other institutions that all conduct reviews of training programs, licenses and certifications offered by non-collegiate organizations to determine whether they are equivalent to college-level learning. The members of this consortium have pledged to share the results of these reviews with one another, to work together to establish common standards and to conduct reviews jointly when feasible.

Though all of these institutions are primarily adult-serving institutions, with similar flexible approaches to learning and degree completion, we entered into this consortium agreement only after determining it was rare for students to transfer from one to another of us, and that we rarely competed for students. The lesson here: we could share costs and effort without worry of losing students and, in fact, sharing standards and policies actually strengthened our programs.

Our other consortium is the New Jersey Prior Learning Assessment Network, or NJ PLAN. In response to a growing interest in reaching out to the state’s adult learners, my institution provides assessment services and administration to other public institutions in New Jersey. Since our institution has offered prior learning assessment (PLA) to students since its founding more than 40 years ago, it made sense for us to extend our functions to other institutions that lacked such programs, rather than force each to create its own infrastructure to manage this process for what’s likely to be only a small percentage of students. Rather than our institution dictating how such a program should work, though, in NJ PLAN each of the participating members is part of a committee that shares information and discusses and determines policies. Additionally, each institution creates its own policies governing how they will use PLA. Thus no one is subordinate to anyone else, and the fact that we serve different though overlapping populations in the state (adult students, displaced workers, former students with some credits but no degree, veterans) further strengthens the arrangement: our PLA needs are similar, but in service to different goals.

In both consortia, most importantly, each member can assess the final product ourselves. All members can evaluate our joint products and determine for ourselves where and how they fit into our institution’s programs. In reviewing the standards by which other institutions in CACE conduct reviews of non-collegiate learning, for example, we provided each other feedback, made adjustments to our own standards, and determined the institutional “fit” of each review. The process functioned like a miniature conference or symposium, in which leaders in their fields made presentations, shared best practices, answered questions, and took ideas back home for further consideration.

While such an approach might not always work in the business world, and is not the same as outsourcing, the effect is still a cost savings while at the same time improving our efficiency and our ability to provide essential services. It stops short of simply offloading our work, but moves beyond an insistence on recreating the wheel. In other words, medium is beautiful.


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Readers Comments

Sally Kerwin 2014/10/07 at 1:09 pm

This is absolutely spot on. We need to outsource periphery, critical services to ensure we can focus on the core mission of the institution.

    Jessica Monohan 2014/10/07 at 5:12 pm

    It goes further than that, really. What Singer is trying to say is that these periphery functions are critical to serving students properly and to staying ahead in the marketplace. It’s critical we’re able to focus on our central mission, but equally important is ensuring these periphery functions are best-in-class. Outsourcing is the best way to guarantee this.

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