Fee for service? Not in education!

Despite the .org suffix for my domain name, I am very much a for-profit person. However, I think there’s little place for a for-profit, fee-for-service model in education. I work for the residential computing group of a university and the department, in turn, is part of larger computing group that aims to serve the academic needs of the university community through the provision of public computer clusters and consulting and technology resources for faculty, staff and students. (This organization is separate from the overall IT organization for the university that is more focused on university-wide systems and infrastructure, such as the network and central databases.)

Somehow, the larger computing group that my department is part of was given the responsibility to turn around a fee-for-service group on campus. They were something like two million in the hole, but the university hoped to give them to us so that we can make them self-sufficient and possibly, profitable. While I’m sure they’re good people and don’t want them to be put out on the street, I don’t really see how the group fits into our department’s, much less the university’s mission as a whole. In general, they provide Web services (Web site design, online surveys, logo design, etc.) to groups on campus that can pay market prices for their services. They are encouraged to conduct business only with university organizations, although they can work for outside clients on a very limited basis (if only to break even).

There are two major problems I have with this model (outside of my own reservations about the quality of their work):

  1. A fee-for-service group of qualified professionals is a great resource for those university groups that can’t afford to, or even want to hire full-time staff for special projects, like conducting an online survey or having their Web site redesigned. However, if they are charging market prices, it makes the entire endeavor less cost effective for the client. Because they are a fee-for-service group, long-term support is either non-existent or existent, but very expensive, cancelling out the value of having the fee-for-service group in the first place.
  2. The group was made part of a regular university department, I’m assuming, to be tied into that department’s and the university’s mission and to take advantage of the management resources available within the department. They are required to be financially self-sufficient (which is good in this economy and the current state of budget cuts), but they still take resources from the department. Besides the management resources required to keep the group running, management has been encouraging “working together,” which essentially amounts to taking homegrown software solutions and other tools built within the department and selling them as part of their services. While we are being monetarily being compensated for use of our products and staff time (as we normally do since we offer them as services for other departments ourselves, albeit at a much, much lower price), they are essentially getting to offer a much more valuable suite of services because of their attachment to our organization. In exchange, the theory is that they offer their own services– free Web design work, consulting, etc. However, since we are a computing group, we already have staff that are specifically assigned to work on those types of projects. So, the question is: is the exchange equal or even necessary?

In my opinion, no.

A better approach is to have the group work as regular, full-time staff at the university as an independent department. Any money being spent to currently manage the department could go toward staff compensation, equipment, etc. Other costs could be recovered through the fee-for-service work, but the group should charge much lower prices, making it truly cost-effective for departments who have little money, but many technology needs. Still not enough money? They should really start looking into student labor. While full-time staff is able to respond quickly to high-priority projects, student staff is a valuable resource for long-term projects, such as the development of useful tools that can become value-add services for future clients, and for administrative and lower-priority work.

Whether or not my version of this model would work is up in the air, but the real solution to providing technology resources to university departments is regular, full-time staff who is trained, experienced and truly believe in the university’s academic mission. Educational institutions are not known for being lucrative endeavors. Yes, many private universities have large endowments and countless donors, but to be cutting edge, it takes great faculty, staff and facilities. In the end, university employees will still be underpaid by market standards. However, great universities– and great companies in general– become great because of the buy-in they get from their employees. We believe in the academic mission, the chance to serve students and affect future leaders, and the opportunity to use the educational playground as the scene for innovation, creativity, and learning. Making decisions based on financial factors alone just doesn’t work because there isn’t much “finance” to discuss. Instead, what drives us to get and go to work everyday is that we get to pursue these goals and get paid to do it. Isn’t that how every job should be?

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