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Chapter 5: Outsource More Services

Colleges and universities are ostensibly in the business of producing and distributing knowledge. Yet huge portions of universities are given over to doing other things: running food and lodging operations, hospitals, recreational centers, building repair and maintenance, high school education (remedial education), entertainment operations (especially intercollegiate sports), information technology services, etc.  Many of these operations could be more efficiently provided by specialists in those activities. Many colleges have made some progress in this area, especially in food services, but vastly more can be done.

Colleges should explore contracting out or selling their food and lodging businesses, but also much more, such as IT operations, building maintenance, student health centers, remedial education, and even campus recreational centers. Universities with large hospitals should consider separating the hospital operations from the core university businesses. In some cases, the sale or long-term lease of capital assets is appropriate, particularly dormitories and dining halls. Resources from assets sales can finance capital projects in core academic areas. Done adroitly, colleges can rid themselves of some money-losing auxiliary operations and actually earn revenues from the leasing of campus facilities to private entrepreneurs to operate businesses (e.g., fast food restaurants in student union buildings).  Some schools are even outsourcing some instructional services to for-profit companies, partnering with such companies in, for example, offering on-line or remedial education.

Although more controversial radical, the complete separation of highly commercial intercollegiate athletic activities from the university would seem to be appropriate. This is particularly true of schools with big time sports programs that often have budgets approaching and even exceeding $100 million annually.

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