2006 Campus Technology Innovators: Outsourcing
TECHNOLOGY AREA: OUTSOURCING
Innovator: Drexel University
BIELEC, AT DREXEL: Bringing IT benefits to
his
university and its campus partners, via an ASP model.
Challenge Met
A majority of the over 3,500 colleges in the
US have fewer than 2,000 students. Realizing
this, Drexel University (PA) has partnered
with more than 50 colleges in an application
service provider (ASP) arrangement in which
Drexel hosts the software and services on its
campus. Through the ASP arrangement,
headed by John Bielec (Drexel CIO and VP for
information resources and technology), the
partner campuses now fund 27 percent of
Drexel’s central IT costs, and 20 percent of
central IT staff. This has enabled the university
to maintain its IT spending costs at a
constant level since 1997, and if annual
cost-of-living adjustments are considered, IT
spending has declined.
The ASP arrangement, which began with a
single school five years ago, benefits both
Drexel and its partner schools:
- Partner schools can access world-class IT
services and resources while avoiding the
costs and requirements of managing them.
- IT spending by partner schools remains
constant after partnering with Drexel.
- Processing power and storage resources
at individual partner schools have
increased by an estimated 5,000 percent
since joining with Drexel.
- Drexel’s income from external partners has
increased 400 percent over three years,
exceeding revenue-enhancement goals.
- Drexel has documented a 2,500 percent
increase in its internal processing power
and storage performance.
- Drexel can replace a small college’s entire
ERP system within an eight-month window.
- Drexel can replace 100 percent of a
partner institution’s business processes
in less than 12 months, on a cycle
reflecting modern business rules, systems,
and web-based transactions.
- Partner institutions offer nearly 500
online courses that are transparently
hosted at Drexel.
- Partners leveraging Drexel volume discounts
can cut costs and shorten equipment
lifecycle replacement to four years
or less.
How They Did It
Drexel established relationships with various
technology companies based on industry
leadership, product acceptance, and out-ofthe-
box integration with other segments of its
solution. Primary products used include Sun-Gard Higher Education’s Banner and Luminis suites; Oracle’s
relational database and
application server; Blackboard’s WebCT Vista; IBM’s xSeries servers; Sun Microsystems’ Sun Fire servers, Solaris, and
Java Enterprise System applications; Red-Hat’s Enterprise Linux
Advanced Server; SAP’s complete suite of ERP applications for educational
purposes; Hyperion’s Intelligence query system; and
Microsoft’s Windows,
Exchange, SQL Server, SharePoint Portal, and
Windows Media.
Next Steps
Because the ASP model has been so successful,
Drexel is currently moving forward
with plans to provide IT hosting services to
K-12 institutions.
Advice
Perhaps the largest obstacle to a higher education
ASP model, Drexel has found, is each
college and university’s perception that it is
unique, and that IT must maintain control of
critical assets and services. To address that,
Bielec says, Drexel’s model is straightforward: A menu of available services, along
with a liberal customer contract termination
clause, helps mitigate perceived risk, facilitates
buy-in, and eliminates the need for
complex service-level agreements. Bielec
stresses that trust is a key ingredient in each
agreement: Issues like lengthy contracts,
service-level metrics, and penalty clauses can
doom the relationship and increase costs.