Economic challenges are driving systematic changes in higher education. Some might call it outsourcing and others might refer to it as shared services. For far too many, those words can refer to a loss of control and autonomy that appears disruptive to organizations, as it potentially leads to the loss of both service quality and jobs. At the University of Texas, over 100 faculty members signed a petition objecting to a University plan to consolidate common administrative functions – IT included – in order to save millions of dollars annually. Similar initiatives at other institutions, including the University of Michigan and the SUNY system, are underway and have encountered similar opposition.
The positive outcomes from these sorts of initiatives can be often overlooked. At my University of Georgia, when implementing the Banner student information system, we chose to host the system in our own data center but we contracted with Ellucian for system administration, upgrades, database administration, and support of the software. Our own IT staff focus on working with our business offices to use the Banner software, while the more routine “IT centric” tasks are managed by Ellucian. This strategy has been a resounding success, and as tough as the implementation has been, the operation and reliability of the software – even when registering 20,000+ students for courses – have never been in question.
Leaders in higher education need to drop the word “outsourcing” and the phrase “shared services” from their vocabularies, as the issue driving these new service delivery approaches is the need for greater scalability. Ellucian is administering Banner for the University of Georgia simply because they can provide better economies of scale when it comes to software and database expertise than we can create ourselves. The need for greater scalability has led us to take similar approaches with other projects.
- Microsoft now runs UGA’s 120,000+ email accounts out of their Office 365 service, simply because they can provide greater reliability and service performance by aggregating our accounts along with those of thousands of their other customers. The outcome is far greater services to our faculty, students, and staff at a much lower cost.
- UGA’s new learning management system (LMS), Desire2Learn, is hosted and administered by the University System of Georgia as a part of a multi-tenant instance of the software. As a result, three UGA full-time IT professionals now focus on support and faculty, instead of administering and taking care of the software.
- New academic information systems for housing and facility activity information are hosted in Amazon’s Web Services Cloud, with software and system administration responsibilities provided by DLT Solutions. By leveraging the economies of scale provided by Amazon and DLT, implementation of these new systems no longer requires purchasing servers, configuring, and supporting them. We anticipate taking a similar approach next year, as we begin moving hundreds of University web sites off-premises under a similar model.
How can higher education leaders pick and choose among the myriad of opportunities to leverage greater economies of scale? Here are a couple of criteria to consider.
- Is the service asset-based (technical, content, or process)? Then look for ways to create better economies of scale, either internally by standardizing the service across decentralized units or externally by working with others outside the institution, including commercial partners.
- Is the service connection-based; that is to say, is greater human connection an intrinsic or expected good? If so, those are the services that are best delivered in-house using staff resources whose knowledge of institutional history, culture, and context enhances the value of the service delivered.