Emerging trends in technology: the application service provider model in higher education

University Business, May, 2005 by John A. Bielec

U.S. colleges and universities are challenged to contain and even reduce technology costs while at the same time responding to the expectations of the "New Millennial Generation" to upgrade administrative systems, support online course management, and provide as many online services as possible. Prospective college students searching for the right college expect to be able to register online, find information about academic programs and services on the web, communicate with faculty and admissions counselors electronically, and even apply for and receive financial aid online. Once enrolled, this Internet-savvy generation expects to check grades, access a myriad of courses, and monitor their financial and personal records online.

While all of these expectations are reasonable, online services are not simple or inexpensive. Colleges must offer e-services to remain attractive and competitive but are hard pressed to maintain current hardware, software and the required range of professional expertise needed to install and support these services. In the January/February 2005 EDUCAUSE Review, Brian Hawkins, president of EDUCAUSE, makes the controversial case for new models in delivering higher ed services. Hawkins notes:

We in the higher education community need to "get over" our traditions, our histories, and our many excuses for why we should try to replicate each other's resources.... The times and the conditions call for new models and innovative means for facilitating collaboration.... colleges and universities need to outsource to.... other higher education institutions--similar to the arrangement among Cabrini and Neumann colleges and Drexel University.

Drexel has been at the forefront of higher education IT organizational and service transformation via an Application Service Provider (ASP) model based on the concept of mutual strategic collaboration. Drexel's role as a service provider was first discussed by Drexel President Constantine Papadakis in a Philadelphia Inquirer interview in 1996. An application service provider simply provides application access (e.g. e-mail) over the internet to other institutions. ASP arrangements enable organizations to have access to essential applications and services without the expense and burden of owning and operating the assets required to run those applications.

Business and industry have long recognized the value and efficiencies of ASP arrangements and are increasingly entering into contractual or back door (e.g. dot-corns such as Expedia, Orbitz, Staples, Amazon) IT application "outsourcing" relationships. A recent report by the Gartner Group states that by 2010, the market share of IT utility providers will be within 29 percent of the total IT services market. John Hagel and John Seely Brown, in an article titled "Your Next IT Strategy" (Harvard Business Review, October 2001), write that "Companies will in the future buy their information technologies as services provided over the Internet rather than owning their own hardware and software."

HIGHER ED IMPLICATIONS

The implications for higher education are evident since a majority of the 3,500-plus colleges in the United States have fewer than 2,000 students. These schools cannot afford to make costly, recurring investments. They frequently cannot afford to upgrade equipment, acquire expensive academic and administrative software, and provide the staff necessary to support IT systems. The wide scope of professional skills necessary to administer servers, manage complex databases, do web development, and provide training and support to users is a constant, often losing, battle. Partnerships, like the many Drexel has developed, provide colleges with the opportunity to experience the quality and breadth of a comprehensive research university's IT services.

Drexel's model is straightforward and based on institutional "choice" normally at the president or board level. There is no attempt to reach a consensus about issues, directions, solutions, or strategies. It is a matter of identifying a service or problem which needs attention, explaining Drexel's solution, and letting the other college leadership decide if the approach will work for them and if so, proceed with implementation as quickly as possible. The partnership has not changed the culture, values, and visions of partnering institutions. However, it has changed the way "things get done." Drexel, in effect, has become the infrastructure for partner schools and provides the model for back office business practice and process management.

For example, when Cabrini College (Pa.) was confronted with the decision to either upgrade its current administrative system or obtain a new one the natural question was could Cabrini leverage the ASP model (Drexel through prior arrangements was already providing e-mail, WebCT course management, web hosting, help desk and other services) in the administrative area: finance, purchasing, human resources, payroll, and student information? Cabrini's president appointed a college-wide committee to investigate possible providers.