Published on 2014/01/13
Vendor and Institutional Practices Must Change to Improve Student Outcomes
Institutions must focus on implementing good business practices, while vendors must recognize that student outcomes and efficiency must come before short-term profits.

There was a time when finding services was a major challenge. We had to search for a good textbook, peruse technology journals to identify a good learning management system (LMS) and conduct extensive research to find the service, technology, textbook or product that best fit.

Now, we have an army of vendors hawking wares in much the same way as door-to-door salesmen. The process has jumped to a scaled inefficiency that turns out new versions of products seemingly for the sake of doing so. For example, with textbooks, we see new releases every three years where the only major difference is a chapter change, and it is not uncommon for a new version of a text to be nothing more than having Chapter 16 now be Chapter 17.

This process transformation created a few large companies from many small companies and this growth has been unable to match the goals of profit, efficiency and student benefit.

Let’s begin with an absolute: the traditional vendor models in higher education are in their last days. Why? The most basic reason is the old sales model of vendors wining and dining with faculty and administrators has created a process of scaled inefficiencies. In other words, the more publisher, LMS and other software representatives, the more inefficient and costly we make education.

Higher education vendors have created an interesting conundrum, with expansion and contraction coexisting in the current market. Rather than innovating products and advancing higher education through available services, vendors continue to create and market outdated and irrelevant products. Not that long ago, Blackboard (an LMS company) bought Angel along with other smaller companies and merged them, but did not merge their sales forces, thus allowing the acquired companies to continue marketing their products as add-on services. This occurred even as administrators were hearing rumblings that the LMS as we know it is dead.[1]

Rather than focus on the next generation LMS, you have more representatives for the same company marketing a dated product. Some schools now have several representatives calling from the same company trying to each sell an add-on service. This is extremely inefficient.

Profit, rather than the desire to improve the student learning experience, is driving change. We find publishers moving into adaptive learning, LMSs and interactive textbook options. Each service, of course, comes with a company of representatives. Each new feature excites a new group, but with all of this happening, one group gets lost: students. Everything is supposed to help students learn but all things come with price tags, new service representatives, license fees, upgrade charges and more. Added to the malaise is the open educational resources (OER) movement working to drive down the cost of textbooks and other learning aids.[2]

Admittedly, there are always trade-offs and cost-benefit analyses; there are justifications for cost increases. What is not happening, however, is a collective approach to acceptable models for evaluating when to purchase.

Regardless of the product, two driving forces will guide education student success and cost reductions. Vendors have created this scaled inefficiency by continuing to drive old business models of acquisition, retrenchment and increased sales rather than look for new models of partnership and strategic alliance. The new vendor will need to become a partner that has an interest in working collaboratively for the long term, rather than one focused on short-term gains in sales. The new student success partnerships will create relationships rather than sales. While technology has made impressive learning options and many with good research results, the cost and success outcomes are inescapable. How do companies create profits without sales or drive innovation without revenue growth?

No company survives long without profits, but short-term gains have little effect on longevity. Relationships built through strategic alliances based on the long term will supply regular profits. Similar to the general industry concepts of supply chain management, all vendors will morph into suppliers working to reduce costs, creating cost economies through service relationships dedicated to student success. In some market segments this alignment is starting to take shape. The solutions lie with collegial relationships, which, for the most part, we have yet to see. For example for-profit schools are disparaged for having a profit motivation, yet all vendors are pure profit-driven entities. Education as an industry needs to come together and begin adopting best practice business models, regardless of where they are created. This will change the current vendor model and allow for relationships where a collaborative approach will be the only way to recover the cost of innovation.

This will also force institutions to consider managing the supply chain through centralized purchases for items with large cumulative dollar costs such as textbooks. This approach could even create competition for textbook prices and publisher services. This is a common practice for capital expenditures: three quotes with criteria and requests for proposals. The practice needs to permeate the academy to manage excessive time needs by sales calls and increases in costs for unreasonable changes.

Commonsense pragmatic business approaches need to be instituted; business is not always the enemy and fear of financial accountability creates waste. We need to become good businesspeople with our product, called education, and embrace changing practices. Massive Open Online Courses will not replace online learning and online learning will not replace traditional education. Textbooks are not dead and not every school will be using OER, adaptive learning, computer-based learning or be replacing faculty with technology.

Education — as an industry or economic player — has often not adopted good business practices; vendor sales must turn to supply chain-managed services, building relationships first and profits second, with a central point of contact to create savings, value and efficiency. Then and only then can we create opportunities that help students become educated without unmanageable debt burdens. – – – – References

[1] Stella Porto, “The Uncertain Future of Learning Management Systems ,” The EvoLLLution, December 13, 2013. Accessed at http://www.evolllution.com/media_resources/uncertain-future-learning-management-systems/

[2] Shai Reshef, “How Open Educational Resources are Changing Higher Education,” The Huffington Post, August 15, 2011

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Readers Comments

Natalie Miller 2014/01/13 at 11:58 am

Dull does well to point out a common tactic many higher education vendors practice in terms of selling the services or products of their subsidiaries. It’s a strategy I’ve seen applied more and more as major vendors move into consultative roles. There’s a lot of talk on the institutional side of integrating vendor services into long-term planning, and some companies are unfortunately taking advantage of that opportunity to pitch “add-ons” that the institution might not necessarily need.

Simon Pickering 2014/01/13 at 4:53 pm

Some of these examples made me laugh. It’s clear there are many vendors out there that don’t understand the higher education industry. At the same time, I was hoping this article would address some of the ways institutions want to be approached. What are pitches that have impressed you? How do vendors who may be new to the higher education industry ‘break in,’ so to speak? What does it really mean for them to adapt their products or services to a postsecondary institution environment?

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