Published on 2014/01/27

Considering a Partnership or a Contract Relationship? Food for Thought

Considering a Partnership or a Contract Relationship? Food for Thought
Partnerships can provide massive benefits for both the vendor and the institution, but only if both parties have bought into the concept.
Higher education institutions use a variety of products every day to conduct their operations. Everything, from the learning management system (LMS) to student information system (SIS) to financial aid and payroll systems, not to mention human resources software, needs to function and align with institutional business operations.

But when should institutions want to try to cross a line in their vendor relationships, moving from contract client to partner client? And what can that choice mean for the institution?

To start, be aware that vendors need partners. They don’t need many institutional partners, but they do need them. Partnerships can be formal or informal but they always happen and they supply benefits to the vendor that include things like a deeper understanding of the differences in institutional operations and how institutions respond to market trends and regulatory changes. This information is invaluable to the vendor. But partnerships require substantial investment from both sides and if both parties don’t take the long view, it can foster frustration and a feeling that the partnership is not producing results.

Likewise, an institution can reap significant benefits from partnering with the right vendor. Through the partnership, it can achieve a strong influence across the levels of the vendor organization. This can help drive decisions in the vendor organization in ways that benefit the institution. Institutional administrators can gain a deep understanding of the functionality within the product and know how to make that product run optimally for their constituents. And they gain insight into the future direction of the products and services — seeing how these plans will or won’t align with their future plans. All of these benefits from the relationship then inform an institution’s future direction and help ensure their success.

So, who is the right vendor? The answer really depends on where an institution chooses to, or needs to, invest. Does the institution need more automation in the management of student records and financial aid awarding to drive down costs? Or does the institution need a new learning or experience (identity) hook to attract students to the school?

If a school is looking for the former, it might want to consider a partnership with an SIS vendor. If it’s looking for the latter, then the LMS vendor might be a better choice.

Each institution should try to partner with one or two carefully selected vendors based on the needed results for the university and the limitations on its resources to invest.

So, as an institution or vendor, what do you need? When should you partner and when does a contract-only arrangement make more sense? Choose to partner, but carefully. Chosen well, partnerships can provide great mutual benefits. Chosen poorly, they’re a drain on resources with little return on the investment.

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Readers Comments

Erica M 2014/01/27 at 10:24 am

I agree that in order for a partnership to work, both sides have to be willing to take the long view. In my experience, institutions are quite willing to do this, as their custom is to take their time making decisions that will carry them for a decade or longer; in other words, they regularly engage in long-term planning. That can be difficult to reconcile with vendors’ style of making decisions quickly with the view of maximizing profits. I may be generalizing both sides a bit, but it does show how difficult it can be to make a partnership work for both parties.

John G. Karmen 2014/01/27 at 4:13 pm

Whitehead makes a good point that there is a difference between a partnership and a contract relationship. Not every contract relationship an institution enters into must become a partnership. In some cases, it’s enough for a vendor to deliver a product or service as requested. In other cases, however, it’s valuable for the institution to involve the vendor in its long-term planning. That’s when the elements of a good partnership — open communication, trust and complementary goals — really matter.

Tawna Regehr 2014/01/27 at 4:43 pm

One of the most interesting points I pulled out of this is differentiating client-vendor relationships from partnerships based on institutional needs.

If the institution needs to make larger, sweeping changes – a partnership is key.

The the institution needs to make smaller, skin-deep changes that do not impact processes too significantly, they can get away with a client-vendor relationship.

Frank Gowen 2014/01/27 at 5:05 pm

This article is quite useful in helping institutions determine whether they need to pursue partnerships in a particular area. The best advice I’ve ever gotten regarding partnerships is that you should always seek them in the areas where you want your institution to stand out. That way, the vendor is with you as you engage in strategic planning, and can offer industry knowledge and subject-matter expertise to help you reach your goals.

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