Published on 2014/01/08
Seven Responsibilities Perfectly Suited for Vendors
There are a number of functions that, though critical to student and operational success, fall outside the expertise and central scope of institutions.
Colleges and universities were traditionally organizations that had little interaction with external support organizations for the academic administration of their programs. There are long-standing organizations, such as ETS, The College Board and the Association for Continuing Higher Education, that have provided assessment and some data gathering support, but in recent years, many new types of organizations have emerged under the term of “vendor.”

In this conversation, I am excluding internal university offices or internal units that might operate as profit centers within the institution. I do not consider them vendors, even though some universities have created an internal marketplace for “purchasing” and “selling” of services with a transfer-price model. These have always existed and, in recent times, some institutions have created these units as “profit centers” rather than the cost center format. For example, libraries typically are cost centers, but internal online support units are increasingly becoming profit centers. These internal “support” units typically work only with departments of the home institution and share revenues.

“Vendors” are the for-profit service providers external to the academic institution. In a typical case, the institution controls the academic content and instruction while vendors provide a particular point of “excellence” in the supply chain. The vendors market and provide their services to multiple academic institutions. Learning Management System (LMS) support companies such as Blackboard are an example of a vendor. In early years, several institutions created their own LMS; however, the recent trend has been to outsource this function to a vendor. Using a vendor allows the academic institution to focus on teaching, learning and assessment — often considered the core mission of the academic institution. Some of the other services universities and colleges consider from vendors are for the following purposes:

1. Creating and Updating an LMS

Vendors are typically more efficient with the creation and updates needed of the support component.

2. Program Funding and Risk Sharing

A small institution might not have the financial resources to scale an online program geographically and, in this case, the vendor functions as a venture capital firm for a newly emerging program. It could be that even though the institution has significant financial endowment, its board and administration are not putting the financial resources into play. In this type of relationship, a revenue-sharing model is typical.

3. Market and Marketing Expertise

It could be that the academic institution lacks the expertise or the needed people power for a new market. In some cases, institutions might have expertise for a section of the products offered (e.g. traditional day regional market), but not for the newly launched products (e.g. online graduate program in an emerging field directed to the adult learner). The vendor might bring market research support the institution does not have.

4. Student Success Support

One of the challenges institutions have is the differing support needs of the various types of students. Student support and retention rate might be improved for an organization with strong student support practices. Purchasing support services from a vendor may be more economical than operating them in-house, and stronger.

5. Prospect Mentoring

The “admission funnel” requires significant attention from the academic institution and the process can be strengthened by an external vendor with the structure and processes in place.

6. Student Coaching

After entering a program, students increasingly are offered “mentoring” and “coaching” support services by their institutions. Support can come from a vendor rather than the academic unit or the institution’s career planning office, which might instead be geared toward a different segment. In some cases, the career planning office provides general tools, such as resume preparation and interview skills, but program-specific coaching/mentoring is handled either by the academic unit or by a vendor.

7. Market Assessment and Institutional Support

Sometimes the institution employs a vendor to examine the feasibility of a programming idea or to assess the infrastructure to handle a new market (e.g. online programming or international student enrollment). Vendors provide these services and ensure the institution is going to be successful.

These are only some of the typical examples for employing a vendor. Institutions should always retain the ownership of the curriculum, teaching and learning assessment. The institutions and the vendors should be very careful to screen each other to assess the longevity of the relationship. The two partners bear a significant risk if a careful due diligence is not exercised.

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Readers Comments

Ryan Loche 2014/01/08 at 7:30 am

I agree with Ugras’ point that institutions should consider partnerships for auxiliary services so they can reserve their focus for their main missions. However, I disagree that curriculum, teaching and learning assessment should necessarily be kept in-house. There may be cases where curriculum design can benefit from an external vendor; for example, a vendor might be able to introduce a new learning format or operate a segment of a course. As institutions are forced to cut costs while maintaining program offerings, alternative solutions like these may need to be considered.

Ugras 2014/01/08 at 9:08 am

Loche makes some good points on this controversy. I wonder how the regional accrediting bodies feel about this.

Jim B 2014/01/08 at 1:09 pm

Ugras’ piece sheds light on new areas I had not previously considered could be outsourced, in particular, the idea of using an external vendor to deliver mentoring/coaching services. My understanding of mentoring/coaching is that it is always tied to an institution’s network and alumni. To suggest that an external vendor might take over this function, and (presumably) do it better than the institution, intrigues me. Perhaps someone with experience in this area could comment further on what this sort of partnership looks like on the ground.

Shawn R 2014/01/09 at 11:48 am

While I am not a fan of bringing in outside vendors, my tongue in cheek response would suggest focusing on outsourcing Administrators that run post-secondary institutions. More often than not they are ill suited to run multimillion dollar operations.

In my experience, the individuals responsible for teaching and working closely with students are the cornerstone of all post-secondary institutions. It is the administrators that can easily be replaced by vendors who know how to run large organizations. Most schools are bloated with this level of managers / administrators so start there first.

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