Outsourcing student services – lessons from IT

I read an interesting blog post by Mark Leach (@markmleach) on the possible impact of wholesale outsourcing on universities’ ability to respond quickly to consumer rights issues. Leach opined that the current relationship between student bodies and university management, where issues are generally resolved by negotiation, is at risk in an environment where many student services have been outsourced to commercial organisations. He suggested that the involvement of a third party would drive a wedge between the student and the university – “a wedge in the shape of a vast, monolithic, faceless bureaucracy whose motivation is profit and at best factors student concerns in to unintelligible calculations of risk, and at worst is entirely uninterested in them”.

The first question that came to mind was whether any institution could afford to let that happen. The increase in student fees has brought the student experience to the fore as a key performance indicator in many institutions. Being responsive to customers’ needs is part and parcel of delivering a quality service and that is the case whether or not the service is managed in house or provided by a third party. The difference is that where the service is provided by a third party, the response mechanisms and times need to be set up in a service level agreement (SLA) between the institution and the supplier. That agreement has to have teeth – it the supplier does not meet their obligations then there should be appropriate recompense. The agreement is two way; the institution will also have to make commitments in order to assist the supplier to deliver the service.

This gives rise to the second question – whether the sector has the skills to manage outsourced contracts. Outsourcing is already a recognised way of delivering aspects of IT services in universities but there are challenges. Defining the SLA itself is not a trivial task and will probably need to involve procurement and service specialists in discussion with the supplier. Even then it is unlikely that it will be wholly satisfactory first time around and so regular review needs to be built into the agreement. The goal should be to move the relationship in an outsourcing project from supplier-consumer to one of partnership where both parties understand the others’ aims and objectives. Supplier management though is a skill in short supply. Universities need to invest in developing their staff so that they are able to work with suppliers and move towards partnership. The University of Nottingham (winner of a UCISA Best Practice Award in 2010) is one that has made that investment and is now reaping the rewards.

There are a couple of further points that are relevant in the debate on outsourcing student services from the experience of higher education IT departments. One is that the main reason for moving to an outsourced solution has rarely been to reduce costs. Improvement of service has often been top of the list with resolving staffing issues (either addressing skills shortages or to free up staff time to reinvest elsewhere) also featuring strongly. In any case, it is often difficult to accurately assess whether an outsourced service will save money as few institutions know what it actually costs to run a given service*. The other point is to consider what your options are at the end of the contract. It would be rare in IT for there to be a single supplier for most applications/services so there is likely to be choice (in addition to bringing it back in-house). It is not clear that the same will be true of some aspects of student services although it is possible that if some institutions look to become providers of student services to others then there will be alternative options.

There will be some outsourcing of student services but I doubt that it will be wholesale in the immediate future. I don’t believe that the market is currently mature enough for any institution to take the risk of making that step. In IT the focus has tended to be on commodity services (such as email, storage, desktop) or on improving service (resilient data centres, 24 hour support). It is perhaps harder to split commodity from added value student services which may prove to be a barrier to outsourcing. Shared services set up by universities may provide a viable alternative to commercial companies and we are already seeing increasing collaboration between institutions in areas such as overseas student recruitment. It is important though that, where outsourcing is being considered, the lessons learned from the IT side of the business are applied to other projects. Institutions need to know what they are looking to achieve from outsourcing, they need to invest in their supplier management in order to build partnerships that deliver the quality of service they are aiming for. And with student experience becoming ever more critical, quality of service is key.

* UCISA is running an event in December looking at cost of services. See www.ucisa.ac.uk/ucprice

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