Three Questions to Consider When Entering a Partnership

Three Questions to Consider When Entering a Partnership
Forming service partnerships with vendors is one way for institutional leaders to keep costs low, but there are still potential pitfalls that must be navigated.

Twenty years ago, I was a young college president anxious to improve my institution and cut costs. After all, budgets were tight then as they are now.

Students regularly complained about the food in the cafeteria, so after reviewing options, I made the decision to outsource our food services. There was an outpouring of dismay from some quarters; the community was afraid of losing jobs, the faculty decried that I had sold out to corporate America. However, the students were delighted because the food was better and meal tickets were cheaper.

Outsourcing things like food service seems pretty ho-hum today when colleges and universities are forming partnerships with a variety of vendors to outsource everything, from enrollment management to course design and faculty development.

New technology and corporate ventures offer college leaders a wide variety of options to outsource services that may decrease cost, improve quality and increase speed to delivery. The savvy leader will make the most of them. College officials have a fiduciary and leadership responsibility to consider alternatives. To be accountable to taxpayers and students, it is important to weigh the pros and cons of in-sourcing versus outsourcing and provide a good rationale for either.

As new types of partnerships are developed and implemented, regulatory bodies and accrediting agencies are challenged to develop policies and procedures to manage them. Whether it is food service or a competency-based degree program, one guiding principle to base the partnership on is the quality of service to students.

The college, the vendor and the regulators always need to come back to this principle. Will students be well served? Will the curriculum help them learn what they need? Will the instruction be effective? Will the materials be current and appropriate? Will the costs be reasonable?

Vendors and colleges can create very effective, long-term partnerships where each contributes and benefits, as long as they keep the quality of the student experience paramount.

The following are three questions institutional leaders should ask when considering outsourcing:

1. Is the Contract Clear?

Lawyers are helpful but not sufficient. The academic leader should be able to explain the terms of the contract in simple language so they understand what they are paying for and their colleagues understand what’s changing. Business people are good at using metrics to measure performance, and this tactic should be integrated into higher education partnerships. A good practice is to include metrics and sample reports in the contract so both parties are clear about expectations.

2. Who’s Going to Manage the Vendor?

Signing the contract is just the beginning of the partnership. Managing the relationship needs to be part of someone’s job description. Careful thought should be given to how much time this will require and not just assumed the designated person will add this to his or her current job. There may be visits to and from the vendor to arrange. There will be reports to read and write and questions to clarify. Performance reviews need to be undertaken. Major contracts may require one or more people from the institution in a relationship management role. Hiring a vendor is like hiring new staff; somebody needs to supervise them.

3. How Do We Change?

Everything is negotiable. It is difficult to anticipate all of the contingencies that may arise. Circumstances change. The vendor may go through leadership or ownership changes. The institution may have misjudged when making usage estimates. Both parties need to be able to raise issues and both sides need to adapt to reasonable requests. One side may “win” in the short term but both will “lose” in the long term if they don’t negotiate and renegotiate in good faith.

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Readers Comments

WA Anderson 2013/08/20 at 10:12 am

Today’s poll actually raises a really interesting question about this particular topic of discussion…

Even if it is more efficient to partner with a vendor to deliver a particular service, should an institution partner with a vendor to deliver a service that is central to its mission?

I would be interested to learn your perspective on this, Mr. Clinefelter.

Kelly Tibbit 2013/08/20 at 2:46 pm

How should an institution react to a leadership/ownership change at one of their vendors?

Surely the vendor has a responsibility to follow through on all contractual obligations made by the former owners?

Rob Young 2013/08/21 at 3:40 pm

It’s easy to say impact on students should be at the forefront of all contract negotiations. The reality, unfortunately, is many presidents don’t think like Clinefelter anymore. Due to fiscal constraints and pressure from the state and federal governments — for public institutions, at least — cost savings become the main attraction in pursuing third-party services. Whether these services end up providing a high-quality experience for students seems more like an added bonus than a necessity.

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