University Business - July 2007 - (Page 31)

VIEWPOINT The Ins of IT Outsourcing Learn the facts behind seven common misperceptions of outsourcing information technology on campuses. By Ed Nadworny OR MANY, THE WORD “OUT sourcing” conjures up images of jobs being lost overseas. Others envision writing blank checks and becoming increasingly frustrated by unmet expectations. It’s a word that has gotten a lot of media attention in recent years and has served as a key issue for many political campaigns. GROWING CAMPUS INTEREST Outsourcing, the business of contracting with an outside vendor to provide goods and services outside an institution’s core competencies, has traditionally been more associated with services such as the operation of bookstores or dining halls. Increasingly, colleges and universities are considering outsourcing all or part of other services, such as IT support. More than 80 percent of chief ﬁnancial oﬃcers surveyed last year by Eduventures (www .eduventures.com) said their institutions had outsourced some technology-related services during the previous year. This growing interest in outsourcing IT is driven in large measure by two factors: cost and eﬃciency. With 4 to 7 percent of annual institutional operating budgets spent on information technology, administrators are searching for ways to contain cost and increase revenue. And the demand for the latest available technology put on them by students and faculty is increasing with each new class. DEBUNKING THE MYTHS All of the public attention on outsourcing has created some common mispercep- F IT is the digital thread that binds together campus communities. tions. Following are some of the ones we hear most often. • Outsourcing costs people jobs. There are, of course, diﬀerent models for outsourcing, and some positions are subcontracted to foreign countries to take advantage of cheaper labor. This model, however, has not been as prevalent within institutions of higher education. IHEs have been more interested in on-site managed services or hosted relationships in which some services are provided from a central location. One of the challenges colleges and universities face today is recruiting talented IT professionals, often to remote locations, in a highly competitive environment. Commercial vendors enjoy the luxury of scale and can attract skilled technicians by offering additional beneﬁts and opportunities for promotion. Vendors supporting multiple customers also have the ﬂexibility to move personnel among locations as needed and don’t face the same limitations as that of a single institution. The greatest reluctance IHEs face when considering outsourcing is from internal IT staﬀ. Technicians fear being replaced by better-skilled workers. Yet half the senior administrators surveyed by Eduventures last year indicated their primary reason for outsourcing IT services was the lack of availability of in-house staﬀ and skill sets. Because of their knowledge and experience leveraged across multiple sites, vendors are able to evaluate the skill sets of existing staﬀ, upgrade those skills where appropriate, and bring more up-to-date skilled personnel to the site as appropriate. In 1998, for example, Immaculata University (Pa.) elected to outsource its IT services. The majority of its IT staﬀ were retained in the conversion and provided the people power to lead the institution in implementing a new administrative system. And while most of the university’s servers are located on campus, several supporting the new ERP system are hosted, providing the institution additional remote database and systems support. • Outsourcing costs more money. While outsourcing the management of technology should not be approached Ed Nadworny is president of SunGard Higher Education Managed Services. www.universitybusiness.com July 2007 | 31 http://www.eduventures.com http://www.eduventures.com http://www.universitybusiness.com

Table of Contents for the Digital Edition of University Business - July 2007

Contents
College Index
Company Index
Advisory Board
Editor's Note
People Watch
Sense of Place
Marketing
Viewpoint
Human Resources
Money Matters
Financial Aid
Community Colleges
Seeds of Scandal
Controlling the Flow
Special Delivery
Presidential Progress
Best Foot Forward: SOX and Financial Standards
Business Technology
What's New
Calendar of Events
Direct Connect
End Note

University Business - July 2007