Educating Universities About Outsourcing | Article

graduate w/diplomaWhen you’re 17, one of the hardest decisions you have had to make in your young life is where to go to college. Then, you arrive on campus and have to embark on a whole new way of living away from Mom and Dad. There’s no doubt these decisions can be tough for teen-agers.

So, five recent college graduates decided to do something to make this trying time easier. Young Shin was just 29 when he and his fellow Wunderkinder launched Embark.com, a San Francisco application service provider. (Shin, chairman and chief technology officer, was the oldest.)

In their IT and management consulting jobs, the founders observed how big corporations behaved. They saw them invest a significant amount of money in new technology to receive an operating advantage, thereby saving dollars, or to make more informed decisions, which made them more competitive in the marketplace.

The founders wondered why consumers didn’t use the same technological know-how to help their outcomes. The friends visited stores like CompUSA and saw few consumer-oriented products on the shelf that helped them “make tough decisions easier.” They decided they would write a program to help consumers do just this.

Software To Make Choosing Easier

At their stage in life, one of the toughest decisions they had had to make was to figure out where to go to college and how to adjust to college life when they get there. So they opted to focus on this one decision. The original plan was to help teen-agers with college selection – there are currently over 4,000 institutions of higher learning in the U.S. — and financial aid opportunities.

The five pooled their savings for the start-up. In the second year they raised more money through “angels,” their family and friends who believed in their mission. Then the dot.com fever struck. Embark.com raised $40 million from venture capital firms in the last 24 months.

In 1995 the Web was just beginning to expand beyond academia with the advent of browsers, which provided an effective, easy-to-use interactive medium that could access large amounts of information. This new technology provided Embark.com’s missing link to the high school students who were facing this complicated choice.

In 1996 the founders made the next logical step: they added the admissions process to their site. Shin went to MIT, his alma mater, and asked if the admissions committee wanted to receive applications over the Net. MIT said yes. Today, Embark.com is helping the university eliminate the need to send out 20,000 paper packets a year.

Another founder who went to Harvard got a no. (Harvard Business School did join later.) But seven other Boston colleges became charter members. The founders launched their on-line application module in December 1996.

Applying to 560 Schools At Once

Today, Embark.com services over 250 unique schools. (For example, the State University of New York’s many branches are considered one school.) But students can apply to over 560 colleges through common applications housed on Embark.com’s Web site.

Embark.com supplies each member university with a suite of five tools called the Enrollment Services System. The secure, Web-based interface allows them to send e-mail to one student or broadcast the message to a large pool of applicants. It also automates the inquiry process. There’s an autoresponder that sends an e-mail informing students the school received their on-line applications, for example.

For the first time, students can apply to college over the Internet. Universities like this new delivery system because they don’t have to mail application kits and expensive four-color brochures to every student who takes the SAT test. One prestigious business school told Shin 84 percent of its inquiries came from Embark.com. “Universities don’t need to hire three temps to respond to these requests. We handle the routine tasks so admissions officers can focus on working with recruits and their parents,” says Shin.

The on-line application process saves dollars by making the admissions process more efficient. It also gives the universities access to state-of-the-art technology. Embark.com runs its Web site from a multi-million dollar data center. It has hundreds of servers in a server farm to support its millions of users. “Small colleges certainly can’t spend this kind of money on technology and many larger universities prefer not to,” points out Shin.

Hardware provides one leverage point. Another is people. Shin says it’s difficult to find talented call center staffers. “You have to invest in your people,” he says. Currently Embark.com employees 215 to keep the site current and provide network support around the clock.

Outsourcing Helps Recruiting

Even more important, outsourcing the applications process allows universities to do a better job of recruiting and enrolling the students they want. “This adds value to their school,” he says.

By the end of 2000, virtually all American high schools will be connected to the Internet. The Web is now the best way to reach this market.

Students know about Embark.com because the company runs ads in media popular with high school students, like MTV and Channel 1. The company also formed a number of partnerships with portals that use its content on their sites. Embark.com has co-branded with [email protected], Snap, Lycos, About.com, and Business Week, among others. As a result, Shin says 90 percent of American teen-agers have seen Embark.com’s ads somewhere.

On-line admissions have been so successful, they have become a core part of the company’s revenue model. While Embark.com’s services are free to users, the company charges the universities for set-up and usage.

In four years Embark.com has only lost one university as a customer. Shin is proud of the company’s 99 percent retention rate. “We lost that one because of politics, not because of our customer service. I’m optimistic we’ll get that one back,” he says.

Lessons from the Outsourcing Primer:

  • Universities can save money by outsourcing the routine aspects of the admissions process. The savings come from reductions in mailing costs and labor-intensive data entry as well as the ability to access expensive network technology at a fraction of the total cost of ownership.
  • Universities can gain increased visibility and a new marketing channel to reach their target market using an ASP.
  • University admission offices can concentrate on their core mission of recruiting a better qualified and diverse freshman class.


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