Outsourcing campus IT: what next?

This week we learned that one Michigan campus will outsource its entire IT department.   I’d like to explore the story, as well as reflect on this as a way of thinking about the future of outsourcing in higher ed.

1. The story

Washtenaw Community College decided to drastically redesign campus IT after a major network outage.  WCC’s board and president, Rose B. Bellanca, worked with consultants to identify what they saw as serious IT problems:

Even with increased support for its IT staff, the review suggested, technical challenges facing the college continued to outpace its resources. Cybersecurity threats, aging IT systems, increased demand for online learning and classroom technology, and difficulty attracting and retaining IT talent are putting pressure on many colleges, not just WCC.

In response, they decided to outsource technology operations to Ellucian.  Ellucian commits to not only solving those problems, but also saving WCC $600,000 annually.

Campus IT staff are outraged, unsurprisingly.  Inside Higher Ed adds that some faculty members protested the move as well.

“Please don’t do this to us,” [Nicholas Hunt, who has worked within the department for 12 years] said. “Please do not put 31 families in disarray. Please, do invest in us, because we have invested in WCC as students and as staff.”

2.What else do we know about this story?

There are conflicting views and accounts of what happened to WCC IT over the past few years.  Some blame problems on very high turnover for the CIO position, with one anti-outsourcing board member stating: “I take personal responsibility as a member of the board, that we have failed in our mission by allowing our IT department to wallow without strong visionary leadership…”

Others argue that IT costs have shot up: “The college also noted demand for technological services continues to grow, with a projected IT budget of $8.2 million for 2020 – a 25-percent increase from four years ago.”

According to MLive, WCC’s president says she wants to bring back in as many of the current staff as possible:

WCC President Rose Bellanca said she anticipated blowback for the decision to outsource IT services, but ultimately believes it will help the college streamline and expand its IT capabilities. She noted all 31 full-time employees will not only have the opportunity to join Ellucian’s staff, but be guaranteed positions within the WCC.

“I know it sounds like we don’t value our employees, but we do, or we wouldn’t have given them a transition plan that is probably one of the most generous out there,” Bellanca said. “We tried to show our employees that are here facing this challenge that ‘we do value you.’”

Those taking a buyout offer would get one year pay, based on the employee’s current wages, along with medical coverage for themselves and dependents for those who have more than 10 years of service.

Those with five to 10 years of service would get six months salary and medical benefits, while employees with less than five years of experience would receive three months salary and medical benefits.

Saving money doesn’t seem to be a major factor in this story.  WCC’s chief financial officer told one local paper that “The outsourcing recommendation isn’t financially motivated.”  Which makes sense, comparing $600,000 to the campus annual budget of $110 million.  It seems to be about improving service.

(I can imagine that’s a terrible thing to hear if you work in WCC IT. )

One problem with outsourcing is that campuses view personal relationships very highly.  In higher education we like to see ourselves as facilitating communities in ways the for-profit world often fails to accomplish.  In this view, outsourced staff might not make those personal connections.  As Harold Hale observed on Twitter,

Or as one WCC professor stated,

Breege Concannon, a chemistry professor at Washtenaw, also had questions about how the transition would work. “Is Ellucian going to be here? Will I be able to call them up on the day before my lab and say, ‘Can you come and update 24 laptops before tomorrow?'” she asked, adding, “I seriously doubt it.”

(One commentator tartly replied to this: “If you behave this way, you are in sore need of organizational change.”)

Why Ellucian, as opposed to any other provider?  WCC already uses Banner, an Ellucian product.  But one IHE commentator alleges the decision to go with Ellucian didn’t involve competitive bidding; I can’t determine the truth of this.

3.What does this story tell us about the future of education?

Outsourcing is a well established and fairly popular tool for corporate management.  It’s also an established tool for American academic leadership, as Rob Gibson observes. As higher education draws closer to the business world in certain ways, perhaps this idea will become more available to nonprofit leaders.  We’ve already seen American higher ed turn the majority of faculty into part-timers; post-Fordist labor relations are already baked in.

Some may also view outsourcing as a more practical way to manage campus tech needs.  In May WCC’s president said this to MLive:

“The advances in technology have far outpaced what realistically could be expected from any college IT staff,” Bellanca said. “While technology enables the college’s core mission of teaching and training, our mission is not to be an elite provider of technology resources.”

I’ve heard similar thoughts from multiple campus leaders.  They can dread IT’s role as a growing cost center, and want to step away from that, seeking to realize cost control or savings from businesses they deem more devoted to that cause.  They might view their staff as incapable of competing with those of Google or Amazon (this is one argument for outsourcing certain services, such as email or storage). Bellanca’s statement is a fascinating one as well for futures purposes.  I can imagine senior admin, boards, or state legislators arguing that VR, AI, etc. are steps too far for their campus staff to take… which means campus IT has to fight that much harder, make that much stronger a case, for support.

Susan Scranton went further, asking colleges and universities to collaboratively outsource:

On the other hand, one expert (and great Future Trends Forum guest) doesn’t see a rising trend in IT outsourcing:

“There is a long history of colleges working with companies like CampusWorks to find temporary IT leadership. But it’s not clear that colleges are outsourcing IT management more now than they did a decade ago, said [Kenneth C. Green, founding director of the Campus Computing Project]. “These things ebb and flow. There’s not a lot of consistency to it.”

Reasons not to outsource are plentiful and known.  Besides what we’ve already discussed (human suffering, cultural disconnections) there are concerns that vaunted quality might fail, that outsourced workers might suffer from low morale and/or poor skills.  In addition, Teresa Hartman points to one process problem:

And Art Fridrich identifies another problem.  What happens if the business ceases to exist?

All of this discussion is about outsourcing one aspect of contemporary American higher ed, information technology services.  What can we learn from questions around outsourcing others?  How far will academia unbundle itself?

(thanks to Anne Elias for sharing links and answering my questions; thanks to Andrew Peterson for requesting the topic; protest photo via MLive; graduation photo by the official WCC account)

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25 Responses to Outsourcing campus IT: what next?

  1. Robert Ubell says:

    As universities require high-quality expertise to run essential services, outside of core education requirements, especially at institutions that cannot afford or attract top talent, outsourcing will continue to emerge as an option for academic leaders. This example is merely one instance of an inevitable trend. Think of catering and security that long ago succumbed to the allure of outsourcing at many institutions. My guess is that industrial-scale national corporations will soon move in to this niche if entrepreneurs see this segment as an expanding market opportunity. Since IT is not my area, there is a good chance that investors may have already invaded.

    • Bryan Alexander says:

      Good thoughts, Robert.
      Industrial-scale: imagine if one of the tech giants offered to do this for a cluster of universities and colleges.

  2. Chris Davis says:

    I worked at an institution where the CIO on down was outsourced to one of the companies that became Ellucian. Where to begin with the problems…first, the CIO was bonused in part on how much he could sell us in IT services and products. There were times when it was clear is loyalty was with his employer (as it should be), but there in lies the problem. As a member of the executive leadership he was in a position to influence decisions to support his employer over the best interests of the university. It is an inherent conflict of interest.

    The story that Ellucian tells is that you can buy a fractional expert rather than having to employ full-time database administrators. I questioned how true this was and if what they were doing was selling more than 100% of staff. If you sell 25% of a cybersecurity expert to 5 colleges, Ellucian makes out like a bandit. That is how they can justify the reduction in expense, because like all contracts it is cost plus. Ellucian can hire former employees at the same pay and then tack their fee on top of it.

    In business strategy in general, you outsource what is not your core business. WCC is saying that IT is not part of their core business. I am not sure if I would make that claim in this age.

    Having interviewed CIOs in higher ed, it is a hard position to fill. It does not help that WCC is in the same area as the University of Michigan, so the demand for qualified IT talent is going to be severe. Ellucian will “solve” this by not hiring locally except as necessary.

    My strategy would be to form of a consortium with other community colleges and create a shared IT services group. But hiring Ellucian is the easy way.

    • Bryan Alexander says:

      Excellent points, Chris. I appreciate your background on this topic.

      I also love your consortium idea. Have you seen anyone doing anything close?

      • Christopher Davis says:

        No. I recall a Chronicle article talking about some consortium efforts, but it would be politically challenging to do this. The cost savings means reducing headcount, or at the very least, if 3 schools agreed to share IT services, they don’t need 3 CIOs. That would make it unlikely that such an arrangement would spontaneously happen. It probably requires someone selling the idea the way that Ellucian does versus shared services.

  3. Roger Schonfeld says:

    Campuses outsource all manner of services, from journal publishing and various cloud systems to dining halls and grounds maintenance. To me a key story here is that many if not all IT services at an important community college have been commodities, at least arguably. I wonder how long it will be before a university with a larger and more complex IT shop can try this.

  4. Andrew Peterson says:

    If your IT department has multiple CIOs in a handful of years, there’s some disconnect with leadership. Either pay isn’t recruiting (keeping) talent, or there’s mixed priorities from existing leadership, or no support for tasks that need to be complete. As a campus you can say you want 1st class technology, but then when IT asks for a couple million to upgrade hardware, it’s easy to overlook the line item, because “Everything already works”. Then 6 months later, when some critical hardware dies, everyone looks around to find someone to blame. There seems to be a communication problem between IT and senior leadership (at least the budgeting side). I’m not sure how wide spread this is in the industry, but it seems (informal experience) to be widespread. IT is the new maintenance crew, it’s a sunk operational cost that you just have to pay. Any college admin/instructor/student unplug your computer/wireless, and see how functional you are. Unless you are walking around giving campus tours, 99% of your job function probably relies on IT infrastructure. Classes are online, registration is online, e-mail, phones, webinars, meetings…. all online. We all seem to smile and nod at how critical IT is, but when it comes to giving it the respect it deserves, nope. Outsourcing might seem like a band-aid, but I’ll bet it gives leadership some time and some data to see what they need to do. From the sounds of it, this particular college was trying to fix a broken system while making use of it every day. Outsourcing will likely give them the breathing room to take a longer look at what IT does, and what they can do in-house. It sounds like a bumpy road, but I think the outsourcing will provide that stability.

    • Bryan Alexander says:

      Andrew, I’m afraid that I’ve seen that attitude on far too many campuses.

      Do you think this college might turn back to an in-house IT dept after a period with Ellucian?

  5. Joyce Ogburn says:

    Seldom do these decisions evaluate the potential loss of knowledge that occurs when the organization outsourced key functions. I wrote about this in the early 90s. On the ground and institutional knowledge and memory go out the door with the contractor. Knowledge management and retention is an afterthought at best.

  6. Jim Parker says:

    Having worked in IT at a major university and having been either faculty, staff, or student at several I’m on the fence about this one. IT staff have been wonderful at some schools I was at and at others they were arrogant and not really concerned with end users issues.

    I will be interested to see if this trend continues.

    • I want names. I suspect most college presidents wouldn’t know what a katamari is even if a big ball rolled by and they stuck to it. Yes, I’m trolling. That’s about the best I can figure to do because I doubt anything serious I say will cause any college president to actually start learning things they should reasonably be expected to know. The level of irresponsibility exhibited in the world right now is just astounding, and it starts and ends with college boards and their presidents. I’m just going to rant and rant and rant about it until I start seeing some competence happening. But hey, at least their fashion sense doesn’t hide the fact that they like acting like four-year-olds being dressed up by their mommies for a photo shoot.

  7. DOYLE FRISKNEY says:

    Seems to be viewed from the local campus perspective that anything local is better. Fails to capture the role that consumerization is having at many universities, most students do not require the assistance of a campus-based organization that has a tendency to place “hoops” in the way of innovative new services. Many IT staff do not have the skills necessary to maintain the demands of new services further frustrating the user community. 2020 will begin a debate on what should the role of IT be in 2025. The outcome will be interesting. A wise person stated that looking back at “what was” does not solve the challenges of “what will be”, a view from a campus CTO of over 30 years..

  8. Yet another in a string of higher education failures in which people who don’t know what they’re talking about saying things like “The advances in technology have far outpaced what realistically could be expected from any college IT staff”. It’s too bad the administrators and board members don’t understand IT well enough to responsibly hold their positions in the first place. It’s time for college presidents and board members to suck it up and learn some IT.

    • Bryan Alexander says:

      Some have tried, in my experience. Too many others have not.

      • Some have tried? Were they successful? Why do you think others haven’t? Isn’t it an implied part of the job? Is it too hard for them? Are they too busy? Maybe they should consider going back to college and learning how to prioritize tasks and manage their time. They teach that there, right?

  9. Brandon Sheppard says:

    I read this article the other day and your post has given me a chance to think on the subject a little more. The article as well as the comments above speak of the cost savings(minimal in context to overall budget) and the idea of the inability of the staff to keep pace with technology demands. Might it not have been a sound idea of this institution of higher learning to invest the monies paid to consultants instead into developing the knowledge and skills of the IT group?

    • Bryan Alexander says:

      Professional development instead of consulting?
      Good idea.
      There’s some overlap, as some consultants do deliver that service.

  10. Carrie L. Saarinen says:

    The president and others involved in the decision sadly only saw IT as a cost center (fta “IT’s role as a growing cost center”. Colleges and universities don’t always see IT as a resource rather than an expense. For those that value IT, inclusive of its leadership and IT specialists employed by the institution, IT is a core component for institutional success. From supporting data and tech needs in marketing, recruitment and admissions; IT for teaching & learning, support systems for campus IT in the dorms food service, and social areas; IT for athletics, the bookstore, and HR; IT for finance; and IT for scholarly research and institutional data and analytics.

    IT is not just for hardware and software management; it’s not just the help desk and finding lost passwords or changing a light bulb in a classroom projector. Colleges who see IT as only a cost center are not seeing the bigger picture.

    As mentioned in comments by Brandon Sheppard and Doyle Friskney, investing in local IT expertise will serve the institution well. If IT is not meeting the needs of the organization, find out why and address that issue – which may be revising job descriptions, updating IT worker skills, reorganizing the IT structure, or empowering the CIO to be more involved in institutional planning.

    If the president, C-level executives and Board members are unable to articulate the role of IT and the IT leader in institutional planning they are likely unable to justify the cost of IT, as evidenced in this case. If they are not routinely engaged in conversation with the campus CIO/CTO/Director of IT, they are not utilizing IT as a resource. Richard Liston wrote “It’s time for college presidents and board members to suck it up and learn some IT.” Maybe so.

    Not all CIOs are members of the executive committee on campus. CIOs need to advocate for themselves to exercise their C-level position. They need to be present in C-level meetings to learn how all departments on campus work, to learn about needs and issues across campus and contribute their knowledge of IT to running the college or university business. CIOs need to position themselves as experts in campus IT and demonstrate that consistently. Show the president and the board what IT can do for the institution on a variety of levels. CIOs can easily walk around campus and introduce themselves to department heads, make sure department chairs know who they are, offer IT services, training or anything they need. Get the IT staff out there, too, to meet people become known as colleagues in campus goals, and develop respect as well as recognition. If people on campus don’t have a relationship with the CIO or IT members, they can’t advocate for IT services, either.

    Wishing everyone at WCC the very best.

    • Bryan Alexander says:

      Great defense of academic IT, Carrie!
      It sounds like the college’s lack of a CIO sapped their ability to make that kind of case.

  11. Ananadh AD says:

    The outsourcing company should be flexible. The terms and conditions on which they work should be flexible and not rigid so that you do not face any problem in future. The BPO Company should be flexible enough to make some changes as per client’s requirements.
    Business Process Outsourcing Companies

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