Transforming University IT: From Cost Center to Revenue Generation Engine

I recently spoke at conference targeted at the IT departments of a group of universities. The purpose of my talk was the same as the title of this blog… a discussion on how to change the operating model of the IT department from cost center to revenue generator. The need for this now is simple: everyone has a cell phone. Charging for a telephone in the dorm room, long distance calling, and voicemail is no longer a significant source of income. So how does a school recoup that lost money (and then some)?

Many universities (if not all of them) impose a standard per-semester “network fee” or “technology fee” which usually runs in the range of $120. This fee allows students to do whatever they want with an open pipe to the world and it is usually accompanied by standard help desk access and an e-mail account. The IT department also has other responsibilities. They need to provide bandwidth and special application support to each department within the University. They need to deal with the integration of every specialize piece of lab equipment, projector, scanner, etc that comes equipped with a network connection. They need to maintain a high level of security around student information and monitor their networks in both directions for illegal downloads and hacking. All of this costs money, but cash flow isn’t unlimited.

In a different category but equally (if not more) important than all of the above, IT needs to offer a competitive salary and keep their teams well trained. Universities are well known as “hacker farms” – students are often more in touch with newer technologies than the IT departments and this creates a strain on the school. The school needs to keep its staff well trained to keep up with student demands for new technologies not only to stay ahead of malicious activity, but to create competitive technology advantage over other schools on a perspective student’s list.

One possible solution is for Universities is to adopt a wireless carrier-like approach. Wireless providers make very little money off of devices and the basic minute plans. The bulk of their revenue comes from text and multimedia messaging, high speed data plans, video calling, and IMS-driven applications (IMS is what enables the download of games, ring tones, wallpapers, watching TV on your phone, etc, etc).

Applying this model, a university could offer the “basic connection” of $120/semester and add additional services on per month, subscription, or per semester increments. For example:

• Offer a study group their own voice/video conference bridge along with application sharing and IM capability
• Create a contact center with skills based routing for 24-hour a day tutor access to students who need it
• Provide a customized portal with integrated schedule, registration, and other information in it, fully tailored to a student’s needs
• Enhanced, secure multimedia communication services between students and their friends/family
• Allow fixed-mobile convergence between a student’s device and the school’s telephony network to enhance mobility and allow seamless roaming so students can stay on the phone even if they need to run to a class
• Selling ad space to local merchants and using student data (class year, personal interests, selected majors) to send the right ads to the right students, either through a portal, on an IP phone, via e-mail, or on the student’s mobile device

These are just a few ideas to get the creative juices flowing, but the bottom line is that the above services could net an additional $100-$200 per student per semester. It will offer an advanced learning environment, provide badly needed competitive advantage, and most importantly put IT on the map as a source of revenue, not just a cost center.