Educational institutions work hard to provide the best possible college experience for students while keeping costs under control. Colleges and universities are complex organisms, requiring a wide range of skills to staff, manage and maintain them. To put all of these skills on payroll would be prohibitively expensive, so most institutions outsource some subset of them.
Today’s economy offers a wide range of opportunities for outsourcing services and systems that have long been a part of the college experience. Deciding which functions to outsource may be more important than you think, as mistakes can be costly and embarrassing. In this post, we pose a series of questions you can use to evaluate outsourcing opportunities as they arise.
1. Why would you outsource the service? It’s important to articulate at the outset why you are considering an outsourced solution. The reasons can help set the criteria you will use to evaluate possible contractors.
- Cost savings: Will you be able to find a highly qualified contractor who can provide the service for less than a fully loaded employee?
- Quality improvement: The institution will seek a provider with capacity to improve on a product or service that it currently delivers in-house. Price will still be considered, but the selection might be made from among those applicants who meet some desired quality threshold.
- Flexibility: Sometimes using an outside provider for a short period or for seasonal needs can deliver a better student experience without a long-term financial commitment. If this makes sense for your school, make sure the provider will be available when you need them.
2. What opportunities are available in the marketplace? Answering this question may take some creativity and research. Once the institution has identified a function or system that it might outsource, it needs to determine if a provider actually exists. Dining services, custodians and other basic functions are available in most markets, but highly specialized operations may or may not have a clear service provider. In some cases, the business officer may need to develop a list of requirements that a service provider can use to propose a fully customized offering.
3. Will there be any internal or community implications? Ask bidders to explain how their services will affect these three critical areas:
- Campus culture: How will the change affect the student experience on campus? Dining services are an excellent example of how outsourcing can have unintended effects on campus culture. In some cases, students may see dining hall staff more frequently than their professors. If the faces they see at mealtime change overnight, it could have an impact on their experience.
- Community: Will the new service displace a significant number of jobs in the community? If so, is it likely to introduce friction between the school and the town or city? If displaced employees are using their positions to qualify for affordable tuition for themselves or their children, how will you address their needs? Any proposal that affects existing staff should identify the implications of any personnel changes and include provisions to help affected workers with the transition.
- Control: Without significant oversight, a contractor could cause permanent damage to important institutional assets. Lack of control in this situation can leave the school facing significant repairs costs. Be sure you have people and processes in place to oversee any new contractors, especially where incompetence or negligence could put critical infrastructure at risk.
4. What is the process for transformation? Any outsourcing proposal should include a detailed transition plan to help the institution get from its current state to the desired result.
- Timeline: Break the transition plan into measurable increments with milestones and completion dates to help everyone understand if the project is progressing on schedule.
- Logistics/internal support requirements: Identify the school resources that will be needed to facilitate the transition and establish clear lines of communication between staff and their counterparts at the outsourced firm.
- Rollout options: Can you test the rollout on a small group before taking it campus-wide? A limited test can identify potential problems before they become major inconveniences or public embarrassments.
Here are a few additional questions you may want to ask potential vendors:
- Do you have experience working in a university environment?
- What relevant trends are you seeing in institutions similar to ours?
- What are some of the most common missed opportunities you see when an institution outsources services?
Every outsourcing discussion is different, with its own set of requirements, objectives and past experiences. Use these questions as a starting place — a general roadmap to guide the conversation. Ultimately, it’s up to the business officer to understand the needs of his or her institution, explore each opportunity and decide if outsourcing a particular function makes sense. The answers to these questions should make it easier to make a confident decision.