Twokin Consulting: Outsource Campus Services to Reduce Long-term Expenses

This post is a continuation of a series of Twokin Consulting articles on how higher education institutions need to challenge the status quo using innovative ideas for reducing costs, increasing revenues, and improving campus operations.

Twokin Consulting Estimate of Implementation Difficulty	Medium
Twokin Consulting Estimate of Implementation Timeline	Long Time Frame (6 months to 24 months)
Twokin Consulting Estimate of Direct Financial Impact	Sizeable
Twokin Consulting Estimate of Campus Controversy it will Generate	Some will question it

In Twokin Consulting's experience, a typical college campus is a small city with a power plant, food service, and mail service. When considering opportunities for improvement, an option to explore is outsourcing key campus services. A focus of higher education is to educate students. Anything else is ancillary and should be considered for outsourcing.

Over the past fifteen years, the range of operational tasks that a campus can outsource has greatly expanded. Options that Twokin Consulting has seen include food services, cleaning, yard maintenance, processing of financial aid, program management, information technology, bookstore operations, and admission processes.

Positive impacts from outsourcing services include:

• Cost savings: Outsourcing can be a more cost-effective solution than maintaining in-house services. This can be significant when one accounts for employee benefits, retirement, pension, , and tuition support provided to employees.

• Increased efficiency: Outsourcing can bring in specialized expertise and better technology to improve service delivery.

• Flexibility: Outsourcing allows the college to scale services up or down as needed, without the need to hire or lay off staff.

• Focus on core mission: Outsourcing non-core services can allow the college to focus on its main mission of teaching and research.

In Twokin Consulting's work, a common options to outsource is the management of the bookstore. In this model, an outside vendor operates the bookstore and provides the college with some percentage of revenue share on sales of books and other merchandise.

Outsourcing is not without challenges. Risks include:

• Loss of control: Outsourcing services can mean giving up some degree of control over how they are performed.

• Quality concerns: The quality of outsourced services may not be as high as those provided by in-house staff.

• Dependence on external provider: Outsourcing services can make the college dependent on the reliability and performance of the external provider.

• Risk of job loss: Outsourcing can lead to job loss for current staff. In Twokin Consulting's experience, this can be mixed as the outsourcing company often will hire experienced staff.

When looking at improving operations, a college should build explore all options. Twokin Consulting woudl recommend building a financial models which account for the rewards and risks of outsourcing an operation.

Twokin Consulting specializes in helping supporting colleges, universities, and nonprofit organizations in brainstorming strategies and ideas for improving operations.