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Outsourcing Plus

October 12, 2010

With budgets tight and the commercial market flush with companies willing to take on various tasks that come with running a university, it has become relatively common for institutions to outsource parts of their operations to outside companies.

It is less common for a public university to entrust an outsider with such a wide swath of duties that it calls that private company an equal partner in online education. But Arizona State University announced on Monday that it is doing just that with Pearson, the education and media company.

Under the agreement, the Arizona State faculty will teach online courses through Pearson’s learning management platform, LearningStudio, using the tools embedded in that platform to collect and analyze data in hopes of improving student performance and retention. Pearson will also help with enrollment management and “prospect generation," while providing more "customer-friendly" support services for students, the university says.

Arizona State, meanwhile, says it will retain control over all things academic, including instruction and curriculum development.

Universities often strike deals with private companies to manage parts of their online operations, particularly when they are trying to quickly grow their online enrollments, which is Arizona State’s stated goal in this case (now serving 3,000 online students, it hopes to grow to somewhere between 17,000 and 30,000 within five years). Companies such as Embanet, 2Tor, SunGard Higher Education, Bisk Education, Colloquy, and Compass Knowledge Group have, to varying degrees, taken over online program management at other name-brand universities in exchange for a cut of the tuition revenue.

 

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The relationship between Arizona State and Pearson will be different, says Philip Regier, dean of ASU Online. The university is not so much outsourcing to Pearson as going into business with it. “In this case, we really looked at it as a joint venture,” Regier said in an interview Monday. “Both sides have expenses, and at the end of the day if there’s a residual [revenue], we decide together what to do with it.”

Regier added that whereas outside companies are often tapped to manage a particular online program, Pearson will be providing its services across all 30 undergraduate degree programs offered through ASU Online. “We’re doing something more comprehensive than what’s really been done at a large institution to this point,” Regier added. “We see this as a public-private partnership that will drive [growth in] high-quality online education.”

As for Pearson, the Arizona State deal represents a step toward the company’s goal of becoming a “comprehensive services solution” for its higher-ed clients, said Don Kilburn, CEO of Pearson Learning Solutions. Some universities already use LearningStudio and other back-office services from Pearson, but there is “nothing as comprehensive as this,” Kilburn said.

To the degree that some relationships between nonprofit colleges and for-profit companies are perceived to violate the sacred wall separating business interests from the academic mission, some universities have taken criticism for aligning with partners whose primary mandate is money making. Early last year, professors at the University of Toledo banded together to kill a partnership with the for-profit Higher Ed Holdings that would have ceded responsibility for most daily contact with students to “coaches” procured by the company. Fort Hays State University, in Kansas, faced criticism for giving credit for courses administered by StraighterLine, a company that sells individual courses in a range of general education fields. (StraighterLine now has partnerships with 20 colleges.)

Regier was adamant that ASU Online, whose graduates get the same degree as any other Arizona State students, will not be ceding any pieces of “the academic core,” such as teaching or admissions, to Pearson in the deal. The same professors who teach on the university's four brick-and-mortar campuses will still design and teach the online courses, and there certainly will be no co-branding, he said.

Asked what his response would be to any backlash from faculty or students, Regier said the relationship with Pearson would allow ASU Online to benefit from the strengths of both partners.

“Public universities do some things exceedingly well -- some things we would never turn over to the private sector,” Regier said, citing teaching, admissions, and financial aid as examples. But the private sector has shown skills too, he continued, especially in marketing and providing just-in-time support services for students. “So with this relationship, we tie together best aspects of the private sector with what we do very well,” said Regier.

Gary Grossman, an associate professor and president of the University Senate at Arizona State, said Regier's assurances are good enough for him. “What they seem to be offering is a comprehensive platform for doing online education where it had been much more difficult and burdensome before," said Grossman. "So I guess if you give me the choice of celebrating it or chafing at it, I’d be in the celebration camp.”

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