Due to the word-count limit in Linked In, I’ve moved a conversation to this blog post. Please feel free to comment.

Original Question: Programme Outsourcing: Could it be real?

Sections of Indian private higher education may be moving in the direction where a “platform provider” offering physical infrastructure hires a “content provider” offering content and enrolments. Any precedents?

Keith Hampson, PhD • Shashi,
You may want to take a look at Navitas, an Australian company (navitas.com). Although I’d need more information to know if this is exactly the type of outsourcing you are describing, there are likely to be some aspects of the Navitas model that are pertinent to your question.

Shashidhar Nanjundaiah • Hi Keith, Thanks very much. I will check them out. There seems to be a market in India all right… maybe much of the market doesn’t know it yet 🙂

Shashidhar Nanjundaiah

Keith, From the looks of the way Navitas works, the company offers programs on its own campus in affiliation with universities worldwide–somewhat like the “study center” concept in India. (We developed that kind of a relationship at Indira School of Communication with the University of Central Lancashire, UK.) In that concept, a university “lends” a program to another college or institute, which then offers its program on its own campus.
This is different from what I’m talking about. Indeed, it could be in some ways the converse of it. An independent academic company that has or develops expertise in one or more subject domains (eg., ours is in mass communication) markets it to a university (or another large, multi-discipline institution)–offering to deliver on that university’s platform the content, along with delivery method and even management of the program (hiring faculty, curricular administration, admissions, placements).
This may work especially well with for-profit universities. With a 40 million strong universe but a 7 percent enrollment, most Indian higher education institutions struggle to rope in enough students and then deliver the goods satisfactorily.
In that sense, the arrangement can be a convenient solution for the university (and a rather gleeful one for the company). But most importantly, this specialized input could help raise academic standards, since the transaction is commercial and induces the accountability in input quality and income.

Shashi

I think you’re exploring an important issue. The capacity of colleges to scale-up quickly and to better manage costs will lead more of them to consider these and other models when introducing new academic programs for students.

Let me start by noting that some North American professionals I’ve spoken with believe that the introduction of new models will be more common in emerging markets – like India. Just as some emerging markets have leapfrogged certain technological states (e.g. Africa: from limited landline phones to broad use of mobile phones in two decades), they will bypass traditional, Western models, and craft multiple new business models in higher education that make sense for the 21st century.

With respect to Navitas, my understanding of their business involves the following elements:

– Serve as the international recruitment office for established traditional colleges

– Provide international students with educational programming on behalf of the client (i.e. traditional college)

– Programming focuses on “university skills” and English-language proficiency

– Fully manage all aspects of the student’s experience on behalf of the client

– Get client approval on the educational programming so that the credits earned by the International student are recognized by the client, but maintain control over the curriculum and hire your own Instructors (herein lies one of the key ways they can bring down their costs and maintain quality)

* I know that there are members of this group from Navitas; please let me know if I’ve misrepresented the activities in any respect.

As you wrote, Shashi, the Navitas model is dissimilar to the model you are exploring. I’ve pulled together a couple of thoughts about the model you are considering (for what it’s worth):

1. Striking the right balance between adding value and duplicating services. Acquiring a new academic program from a third-party may introduce a second set of logistical issues and infrastructure demands for the host university that, in turn, decreases the seamlessness and simplicity of the experience for the student and, likely, increases the administrative complexity (and costs) for the host school. In a sense, the more services you provide for the host school, the greater the duplication, and the less the value.

The objective, then, is to find the right balance between offering value-added services for the host school, while not increasing the complexity of adding the program or the costs that arise from this complexity. If you offer nothing more than the content of the program (readings, instructional activities, assessments), then you can quite easily fit this into the host institution’s existing systems (the “program-in-a-box” model). But if you assume responsibility for other matters such as hiring faculty, admissions, student placements (as noted in your message above), then the complexity and time requirements for the host institution climb because of the need to integrate these functions with their own, existing systems. (Interestingly, many Western colleges have sought to offer the “program-in-a-box” model to colleges in emerging markets, only to learn that the host institution wants an affiliation with the Western college more than they do the actual program content.)

Brand management is a related matter. When a college turns to another enterprise to provide services, they lose control over certain aspects of the brand. For traditional colleges, this is all–important. Others, of course, see outsourcing as an opportunity to increase quality and thus improve their brand.

2. What are the actual savings? From a business perspective, anyone considering investing in this model needs to be very conscious of the actual costs (both perceived and real) to the host institution of adding new academic programs.  In my experience, people outside of higher ed tend to assume that these costs are considerable – which is not always the case, particularly for traditional (non-profit) colleges.

For traditional institutions, the labour required to create new programs comes largely from internal staff already on the payroll. These staff members are a  “sunk” cost and thus requiring no further investment. And unless aided by consultants, the process of determining whether a new program is sustainable is remarkably informal, and based on limited insights into the needs of the student population.

Nor is it difficult for colleges to find new academics to teach these programs. You can’t throw a rock in North America without hitting an underpaid, overqualified academic (in most, but not all disciplines). In the end, the lack of new program development in traditional institutions is inhibited as much by institutional inertia as by costs.

This scenario contrasts sharply with “product development” in private enterprise where extensive market analysis, risk assessment, and prototype development and other activities are standard-operating procedure.

The question is this: is the cost of creating a new program sufficiently high, and the knowledge base for the discipline (e.g. mass communications) sufficiently limited, that enough colleges will (clearly) see the ROI in outsourcing?  The answer to this question will surely differ in the North American and Indian contexts. However, I suspect the variables that need to be considered are roughly the same.

 

 

 

4 thoughts on “Programme Outsourcing: Conversation Notes

  1. The company I work for, Meritus University, located in New Brunswick Canada, fits the brief profile of the sort of independent academic institution Shashi describes. How might I contact Shamshi directly to explore the possibility of collaboration?

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  2. Keith, The two challenges you’ve mentioned are both spot-on. In the Indian context, the challenges are somewhat (or greatly) different:

    -Finding good faculty (stress on the adjective, because our faculty has typically grown up on the traditional methods of learning that we are victims of. Even within the traditional spheres, finding full time faculty is painfully difficult.)

    -We could be duplicating services if we simply replicate the academic content and methods as they have been followed. The whole idea is to offer expertise that the parent institution does not. Now, while this is a big challenge, education management companies have also been successful in selling themselves to private universities because the end result may be less operational hassles for the university.

    -The financial model would determine why the outsourcing would be useful. The scaling-up of enrollments would be a big draw.

    -Many of our traditional universities lack marketing skills, and many of the private ones are established by academics or businesspersons. In the former case, they would need a marketing push; in the latter, they may need academic direction.

    -In a for-profit situation, the model may be a combination of income-sharing and upfront charge. The usefulness could be determined by a simple formula: pass on a hike in tuition and fees to students, increase enrollments. In tandem, this would result in a win-win situation. Cut costs also on any administrative redundancies (which are normal in the Indian education environment).

    -Placements would be another big draw. Our own efforts need to be in ensuring a student goes from raw-material to employability status, and the proof of that pudding would be in marketing the students for industry recruitment. If successfully done, this process creates a verified and workable model for an upward graph of enrollments. Hence the scalability we talked about.

    Thanks for the opportunity again, Keith.

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  3. Shashi,

    I would like to add on placements of engineering graduates in India.

    The colleges should undoubtedly concentrate on honing the engineering skills of their students. At the same time, they should see that there are certain programs ENFORCED throughout the first year till the graduation year EG: Communication Skills, presentation skills, Team development, etc.

    I work in the Education department of an organization in India ( moved from hard core engineering to the Education field). We have started such programs and at the same time, providing training to the students to crack aptitude tests which are conducted during campus recruitment for screening purpose. Let me tell you, out of our 500 final year students, almost 480 are placed in good organizations.

    – Amar Dixit

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