Co-Sourcing Partnering

Building a Sustainable Higher Ed Back Office Business Model

Unlike its traditional outsourcing forbearers, co-sourcing involves a partnership of equals, providing a one-stop total solution from the student’s perspective, making high-quality academic programs available at affordable prices, and increasing the institution’s value proposition yield and competitiveness. Importantly, the cost savings can be reinvested in the institution’s own workforce for their professional development and enrichment in consideration of their service to the college or university.

What if there was a one-stop, total solution for an institution to gain quality improvement, economies of scale, efficiency in increased conversion yield, increased student retention and academic success and competitive market advantages commonly associated with traditional outsourcing without adverse operations and impact on the institution’s current workforce?   Imagine a scenario where both the institution and employees would actually benefit with quality services, cost savings and the time to focus on the college’s true mission of teaching, research and community service.

It is currently taking place with great success at other higher education institutions through dynamic co-sourcing. Unlike outsourcing, a co-sourcing arrangement involves equal collaboration between the employees of an institution and those of the outside partner.   By placing both partners on the same page, partners can help colleges and universities meet institutional and strategic goals – the result usually being something positive that generates new sources of revenues for an institution or efficiencies that enable an institution’s employees to be more successful in their roles.

In the era of doing more with less and effective management, co-sourcing is a reality in higher education today.   A recent Chronicle of Higher Education article “Student Services, in Outside Hands” stated that co-sourcing “can benefit more that the bottom line:  More so than colleges, specialized companies may have the focus to hone one process or tool, the flexibility to innovate, and the scale to operate more efficiently”.

Co-sourcing provides institutions with a wide array of expensive technologies and expertise for both small and large institutions who choose to increase their bottom line results.  Furthermore, a co-souring partner works in tandem with an institution’s processes and culture. In essence, an organization gains all the benefits of outsourcing without having to make hard sacrifices whether control or reductions in workforce.

Sounds too good to be true?

Consider the major public university that co-sources its telephone financial aid advising. The co-sourcing partner provides costly technology that the institution otherwise could not afford as well as the ability to scale staff during periods of peak demand. The school’s internal staff approves of the relationship because it enables them to focus on students that walk into their offices with more complex advising needs versus answering congested phone lines and mostly general questions. The three-year relationship has also enabled the institution to hire more unionized financial aid employees.

Consider the case of the typical small, tuition dependent, private not-for-profit institution. This school wanted to offer continuing education programs to subsidize its traditional population and growth. At the same time, it had few resources, expertise, or capital to compete against the big for-profit education corporations. The institution turned to a co-sourcing partner who was able to provide the marketing, technology, and recruitment expertise to help this otherwise small not-for-profit college effectively compete for students in a difficult marketplace.

Today, this institution generates tens-of-millions of dollars annually from its distance learning programs and, despite the recession, has not had to resort to any layoffs or cutbacks. Conversely, the school has actually grown its employee ranks since 2008. The co-sourcing relationship has been a win for the institution, its workforce, and the school’s outside partner.

Co-sourcing is quickly becoming the sustainable, forward-looking trend that benefits all parties, allowing an institution to benefit from the core advantages that outsourcing can create, without encountering adverse impacts. Unlike outsourcing, co-sourcing is a concept that all constituencies at an institution can get behind and benefit from.