University Business - July 2006 - (Page 87)

In just three years with the higher education market, the conversation has gone from `Don' t say the O word' to `We need help.' Kristy Elmore, Johnson Controls A local firm cut what turned into a longstanding deal to handle groundskeeping at Lehigh U Pa. . Yet, when the university embarked on a often, and officials can't leverage their in- tities. It hampers flexibility. Everything has to major upgrade to its energy management sys- ternal economies of scale to keep up. When be negotiated and renegotiated as opposed to tems, it made sense at the start to outsource the technologies needed for skills like floor making a decision and moving on. the highly technical maintenance needs that cleaning, for instance, don't require certifica- Of course, many public IHEs have an accompanied it. Over time, however, our tion or special tools, they keep it in-house. economic incentive to put up with the hassles facility staff had to develop expertise in those In the next breath, he reverses himself. of outsourcing. For example, often they'll use new systems, so when it came time to rene- There is another line of thought that says money saved from outsourcing for capital gotiate that contract, it was not as financially to do complicated stuff in-house because it improvements on campus, Peterson says. As advantageous and not as necessary, Plym- gives staff more of a challenge. These cam- a private institution, Richmond can borrow pton reports. So long, HVAC vendor the puses outsource the routine, basic stuff, money for things like renovations less expen- boilers are back in house. he reports. And that's what's so confound- sively. Having more avenues for borrowing Baylor's Bagby oversees vendors that ing with universities. You see just as many money makes outsourcing less important handle maintenance, groundskeeping, food thinking one way as another. Then the ad- from a financial standpoint. service, cleaning, even elevators. Most of ministration changes and the new person Such a variety of experiences signals one them came on board one at a time. That decides to use exactly the opposite logic. truth for Johnson Control's Elmore: Today's timetable is one reason he dismisses the no- In other words, there's no discernable pat- IHEs are making informed, deliberate deci- tion this was a stressful change. There really tern as to how IHEs handle outsourcing. Nor sions rather than being sold a program. Men- weren't very many fears. As long as we have can vendors pinpoint whether it makes more dicino has seen the same shift. Administra- the right people in place on the Baylor side sense for public or private institutions, large tors are looking at facilities differently, with to manage that, everything's fine, he says. or small campuses although some experts a greater sense of urgency to use them to the But vendors shouldn't expect much from do admit the heavy union representation at greatest advantage, he says. The context for a sales call on Herbert C. Peterson, vice pres- larger schools can nix a lot of outsourcing outsourcing and the discussion about out- ident of Business and Finance at the Univer- possibilities. Perhaps most shocking of all, sourcing are different as a result. sity of Richmond Va. . He did outsource the players can't determine if this strategy is a Don't Ask Why food services years ago, and then tried the savings, and whether they care either way. strategy again with information services over From Christensen's seat, if outsourcing Many of Rick Justis's contacts cite the clas- nearly a five-year period in the mid-1990s. doesn't make sense from a financial liability sic reasons for outsourcing: Facilities man- That was not a happy arrangement, he says standpoint and then also comes at a cost, agement simply isn't a college's core busi- bluntly. It's a culture clash between two en- why bother? Financial benefit weighs in ness or the task is complicated, changing universitybusiness.com July 2006 | 87 FacitlitesOutsourcing.indd 87 6/21/06 3:11:41 PM http://universitybusiness.com

Table of Contents for the Digital Edition of University Business - July 2006

Contents
College Index
Advisory Board
Company Index
Editor's Note
People Watch
Sense of Place
Stats Watcch
Viewpoint
Marketing
Human Resources
Future Shock
Money Matters
Community Colleges
Diamond in the Mudd
Higher Ed at the Crossroads
Property Values
The President Next Door
Good Medicine
The Outs (and Ins) of Facility Management
Business Technology
What's New
Calendar of Events
Direct Connect
End Note

University Business - July 2006