Article
Rethinking university administration
The case for managed services in an era of uncertainty
Feb. 12, 2025 · Authored by Adrienne Larmett
Colleges and universities today face mounting pressures from multiple fronts. Shifting political landscapes, executive orders, regulatory changes, and evolving federal funding priorities are creating unprecedented challenges. With compliance requirements growing, funding becoming less predictable and scrutiny from both government and the public increasing, institutions must reassess how they allocate resources.
At the same time, institutions must remain committed to their core mission: educating and supporting students. Given these realities, leveraging managed services for key administrative operations presents an opportunity for institutions to enhance efficiency, reduce costs and reallocate resources to student-centered initiatives. Now is the time for higher education leaders to embrace new models of operation that allow for agility, sustainability, and long-term success.
Why managed services is a strategic imperative
The notion of managed services in higher education is not new, but its strategic importance has never been more relevant. Institutions are struggling to do more with fewer resources and maintaining large in-house administrative teams is becoming increasingly difficult. By leveraging third-party expertise, institutions can reduce overhead costs, streamline operations and focus their budgets on academic excellence.
Key benefits of managed services for higher education
1. Cost savings and budget reallocation
With declining government support and unpredictable funding streams, institutions need to stretch every dollar. Managed services allow institutions to convert fixed costs into variable costs, eliminating the financial burden of maintaining a large administrative staff while ensuring compliance and operational efficiency. The savings generated can be redirected toward:
- Student support services (e.g., mental health, career counseling, financial aid assistance)
- Academic programs and faculty development
- Infrastructure improvements and technology upgrades
2. Enhanced compliance and risk management
Regulatory requirements in higher education are expanding, particularly around data security, Title IX compliance, financial aid, and accreditation standards. Specialized third-party providers stay ahead of evolving regulations, ensuring institutions remain compliant while reducing legal and financial risks.
3. Access to specialized expertise
Many administrative functions—such as IT, cybersecurity, HR, financial aid processing, and procurement—require specialized skills that institutions may struggle to recruit and retain in-house. Third-party vendors bring:
- Industry best practices and cutting-edge technology
- Dedicated compliance teams focused on evolving regulations
- Efficiencies gained from serving multiple institutions
4. Increased institutional agility
In today’s rapidly changing environment, institutions must be able to pivot quickly. Managed services provide the flexibility to scale services up or down as needed
What can colleges and universities leverage through managed services?
While academic functions should remain at the heart of the institution, many operational areas are ideal for managed services:
- Information Technology (IT) and cybersecurity: Managed IT services ensure robust security and system reliability while keeping up with rapid technological changes.
- Facilities management: Maintenance, custodial services, and campus security can often be managed more effectively through external providers.
- Human resources and payroll: Many institutions already utilize managed services for HR tasks such as benefits administration and recruitment.
- Financial aid processing and student services: Third-party providers can ensure compliance while enhancing service delivery for students.
- Sponsored research administration: Managing compliance, grant administration, and financial reporting for research funding can be complex. Third-party providers can help streamline these processes, ensuring institutions meet federal and sponsor requirements efficiently.
- Procurement and supply chain management: Leveraging managed services for purchasing functions can drive cost savings and efficiency.
A road map for university leaders: Next steps for evaluating managed services
For presidents and leadership teams seriously considering managed services, a structured evaluation process is essential. Here’s a road map to guide the decision-making process:
Step 1: Conduct a comprehensive operational assessment
- Identify administrative areas that are resource-intensive or struggling with inefficiencies.
- Benchmark operational costs against industry best practices to determine potential savings.
- Engage faculty, staff, and stakeholders to understand concerns and opportunities.
Step 2: Define strategic goals for managed services
- Clarify whether the primary goal is cost reduction, risk mitigation, operational efficiency, or student service enhancement.
- Establish key performance indicators (KPIs) to measure success.
- Ensure managed services align with the institution’s long-term strategic plan.
Step 3: Research and select third-party partners
- Identify reputable vendors with higher education expertise.
- Evaluate service providers based on experience, compliance capabilities, and cost-effectiveness.
- Conduct due diligence, including reviewing case studies and speaking with peer institutions.
Step 4: Develop an implementation plan
- Create a phased rollout strategy to ensure a smooth transition.
- Establish governance structures to oversee third-party relationships.
- Communicate clearly with faculty, staff, and students about the changes.
Step 5: Monitor, evaluate, and adjust
- Regularly assess vendor performance against KPIs.
- Gather feedback from key stakeholders.
Addressing the impact on staff and local economies
One of the primary concerns with managed services is its potential impact on existing employees and the local economy. Institutional leaders can take proactive steps to mitigate these effects:
- Redeploying staff: Institutions can prioritize transitioning impacted employees into student-facing roles, academic support, or other strategic initiatives.
- Retraining and upskilling: Institutions can offer professional development opportunities to help staff gain new skills that align with institutional needs.
- Vendor partnerships with local businesses: Ensuring that service providers engage local businesses and employment pools can help sustain the surrounding economy.
- Phased implementation: Gradually integrating managed services allows for thoughtful workforce planning and minimizes disruptions.
A call for bold leadership
Higher education is at an inflection point. The old models of administration may no longer be sustainable in the face of financial pressures, increased compliance requirements, and shifting political landscapes. Now is the time for leadership to rethink how they operate and embrace managed services as a strategic tool for efficiency, innovation, and resilience.
Managed services is not about reducing quality or relinquishing control - it’s about making smarter, more strategic choices to ensure the longevity and success of our institutions. By reallocating resources to student-centered initiatives, institutions can adapt to changing realities while continuing to fulfill their mission of education and research.
With the right partnerships in place, managed services presents an opportunity not just to survive, but to thrive in an era of uncertainty.
