Should We Outsource IT?

• By Linda L. Briggs
• 10/20/05

Smart schools are discovering that by freeing up IT to focus on core competiencies, outsourcing may be the great higher ed ‘enabler.’

AN INSTITUTION’S CORE COMPETENCIES are what make it unique and desirable—strengths that vary from school to school. Managing IT, however, may not always be one of them. That’s why institutions of higher education often look at ways to outsource some of their IT functions to outside experts.

At the University of Florida, for example, outsourcing certain IT-related projects has proved to be a smart decision. The university’s distance learning program serves up sophisticated video, text, animation, and simulation content via high-speed Internet connections to students at four campuses across Florida. Instead of trying to handle the complexity of supporting streaming video, the school decided four years ago to outsource the project to Nashville-based DigiScript (www.digiscript.com), explains Bill Riffee, associate provost for Distance, Continuing, and Executive Education.

“After we decided what resources we’d need to physically capture, host, and support [the project], we came to the conclusion that we didn’t have the infrastructure to provide the reliability we needed,” he says. His reasoning is a classic example of what often drives outsourcing in higher ed: “We didn’t have people on campus who got up in the morning thinking, ‘I need to capture lectures today and that’s my number one priority.’ They had 50 other things to do instead.”

So, DigiScript now supplies all the encoding, equipment, hosting, and support for the distance learning project, and four DigiScript employees work right on campus. Unlike Riffee’s staff, those employees do spend their days thinking about how best to handle complex streaming media projects. In fact, says Riffee, DigiScript has proved to be an excellent outsourcing partner, and not just vis-à-vis performance (the service vendor has maintained 99 percent uptime over four years, and has captured and served thousands of hours of lectures), but as a partner in helping to improve the process. For example, the university and DigiScript are now working together on a sophisticated keyword search function that can search videos for spoken words. “We believe we’re the first in the world to do it,” Riffee discloses.

The question is: Without its partnership with DigiScript, would the school be where it is in its distance learning program? “Without them, I’m not sure I would have pursued any of it,” Riffee says honestly.

In another example of strengthening a program by outsourcing to experts, Riffee cites the university’s non-traditional Doctor of Pharmacy program. “We outsource the marketing of that to a company that has developed a proprietary system that follows our students from initial interest to enrollment.” Through that company, they discovered an interesting fact:25 percent of potential students for the program take up to five years to enroll. Without an outside partner with professional data-tracking and marketing expertise, Riffee says, the school would have abandoned marketing efforts to those students. Instead, they now know to continue pursuing them.

To Outsource or Not to Outsource

Clearly, outsourcing d'esn’t have to mean working with an overseas help desk vendor; nor d'es it mean dismissing the IT department. Rather, as the University of Florida examples illustrate, it may mean that when you add a new service or take on a complex project, you’ll want to carefully select a partner with expertise that complements your own—especially if the project is outside your staff’s knowledge base.

Outsourcing is nothing new to higher education, of course. Areas like facilities management and food services have been outsourced for many years, points out Geoffrey Tritsch, president of Compass Consulting International (www.compassconsulting.com), an independent consulting firm focused on technology in higher education. And as IT has grown as a cost center and focus of interest, outsourcing has “been filtering into technology more and more over the years,” he says.

Still, in strategic planning with higher ed clients, Tritsch adds, the questions always come up: “Should we be outsourcing? And if so, how much should we be outsourcing?” Although cost is almost always the impetus behind outsourcing, most experts agree that outsourcing may or may not be less expensive than keeping a function in house. Importantly, outsourcing certain areas frees up staffers to focus on core competencies and their improvement. Tritsch agrees that, indeed, when it comes to outsourcing, there are other things to carefully consider, including control of the project or technology. Furthermore, with IT, Tritsch says, some outsourcing is inevitable. “It’s really not a matter of if; it’s a matter of how much.”

In that case, where should you start? “We’ll usually look for where the customer is having the most trouble and is weakest,” he says. “That varies from customer to customer.” Compass helps schools figure out what those problem areas are and calculate the dollars it would take to outsource a specific function.

Tritsch, who has been an independent consultant to higher education for more than 25 years, says he’s watched the outsourcing pendulum swing in and out of favor several times over the years. Right now, “I would say we’re probably pretty far to the outsourcing side, and it’s starting to swing back,” he says. But many factors—including national and worldwide economic climate changes—can affect the pendulum as well. For a useful Q&A white paper about outsourcing in higher education, go to compassconsulting.com/articles/outsource.html.