E-Commerce: Your Business Solution: For Solving Problems across Multiple Areas of Campus Business, E-Commerce Is Unbeatable. (Online)
Goral, Tim, University Business
No longer just a buzzword in technology circles, e-commerce has found a permanent home at colleges and universities across the country, as more and more institutions make the Internet a central focus of their business strategies to provide value-added services that ultimately enhance their bottom line.
In fact, electronic commerce has become a driving force for higher education in a fairly short period of time, helping students and staff with a myriad of tasks and functions--from streamlining paperwork, paying bills online, and gathering alumni donations, to more accurately forecasting future cash flow. As a result, a growing number of schools are reaping big benefits in terms of cost savings; new revenue opportunities; greater administrative efficiencies; and enhanced service and support for students, families, faculty and staff, and others.
John Carroll University in Ohio successfully employed an e-commerce system that enabled the school to allow its alumni and others to reserve rooms and schedule events for a large alumni reunion held earlier this year.
And in 2002, in a period of just four weeks, Cornell University (NY) collected more than $2.1 million in tuition payments via e-commerce. With specialized technology, students and their families were able to review and pay their tuition bills online and in real time, giving them unprecedented convenience, says Robert Morgan, director of Information Services at the school. Moreover, the technology could mean even greater savings for the institution, as the potential for late payments is reduced.
Officials at the University of Maryland-College Park said their decision to use the power of e-commerce was, in part, based on the increasing number of students who conducted business via the Internet. The school began shifting traditional paper transactions to electronic channels last year, employing e-commerce to accept credit card payments online. Ultimately, the decision has resulted in a tremendous increase in Internet activity, according to Michael Landi, assistant bursar, who anticipates continued aggressive growth in the future.
Proponents and users of the latest e-commerce systems contend that key advantages of the technology are convenience and time savings. Consider, for example, a purchasing department at a large university. With e-commerce, employees who are responsible for making institutional purchases--whether a laboratory beaker or a larger expenditure such as an office copier--no longer need to manually sift through a multitude of product catalogs. Rather, they place their orders electronically, an invoice is prepared, and bills are subsequently processed and paid--all transacted online and in real time.
In addition to improved efficiency, schools are realizing significant cost savings from e-commerce--dollars that may then be put into new academic services for students, or to defray rising tuition costs.
A FLEXIBLE APPROACH
For Morgan at Cornell, e-commerce technology offered a flexible approach to enhancing the school's ability to manage donations from alumni and school employees.
"We have a large number of donors--anywhere from 4,000 to 5,000--who have continually requested we charge their credit cards on a weekly, monthly, semiannual, or annual basis. But managing this workflow was extremely difficult," Morgan says.
"We also have a large number of faculty and staff using payroll deductions to give to the university. The previous process we used to transact these donations each period--donations ranging from 13 cents to $1,000--was very laborious. It used to cost somewhere around $g for the school to process a transaction from each donor every pay period; and the average transaction gave the university about $7. In essence, every time we entered a transaction, it would cost us $2 per transaction in excess of the amount we actually received as a gift!"
The resolution, he says, was to find an alternative that enabled donors to conduct electronic fund transfers directly from their banking accounts. "It's been a great deal more efficient," Morgan notes. "And I view it as something that will allow our donors to more easily give to us in the long run."
The school uses the Advanced Payment System, part of Sallie Mae's Net.Pay product suite (www.salliemae.com/school/netpay.html). The Web-based process allows donors to schedule future payments over a predetermined number of years. Cornell's advance-pay arrangement, for example, allows donors to schedule regular payments over a five-year block.
Rosalie Massey, director of Alumni Reunions at John Carroll University, also offers praises for e-commerce technology. Specifically, the institution was seeking a process that could enable alumni to make their alumni-event reservations online. In the past, the school had used an e-mail-type system, but it did not offer a secured site, said Massey. "Some people left their credit card information and others didn't," she said. "In the end, it was quite an undertaking, because we had to contact individuals one by one to retrieve the appropriate financial and personal information we needed."
The school found a solution to these challenges via an e-commerce suite of services that provided a secure "shopping cart" site. The technology allowed individuals attending the alumni event this past June to reserve rooms and select from a variety of events and classes to participate in. Beyond that, the system allowed registrants to indicate whether their children or spouses were attending, which, in turn, helped the school better plan how many meals it would need to provide. Registrants were also presented with an opportunity to easily donate to the school at the time they registered.
Says Massey, "The technology enabled the funds from reservations placed with credit cards to go directly to the bank. The information then went to our business office that keeps tracks of which budget the information goes into, and we ultimately got the reservation here. Time was saved because if a credit card did not go through or there was a problem, we didn't have to try and track it down; that notification simply went back to the person making the reservation."
Emory University (GA) also is among the growing number of IHEs that have taken the e-commerce plunge. The technology has been a mainstay at the school since going "live" three years ago, according to Rex Hardaway, Emory's director of Purchasing. Hardaway says he has witnessed an evolution of e-procurement solutions, as e-commerce companies devise and re-devise the technology to successfully address the unique needs of the higher education marketplace.
"There is a dichotomy that exists between the need to rationalize the supply chain--to make it much more pragmatic--and the need to diversify it all at the same time," explains Hardaway. "Corporately, an institution has goals or mission statements that suggest the call for diversifying the supply chain, to create opportunity. Initially, the e-commerce model that emerged suggested it would be more cost effective to rationalize and make the supply chain much more pragmatic. Those two fundamental differences of opinion create some of the slow adoption of e-commerce in higher education, because it's not just about controlling rogue spending. To be effective, it has to address much broader aspects of the academic community and its mission."
As e-commerce products and systems are developed, with functionalities implemented to better serve needs specific to higher education, the end result can be advantageous for colleges and universities. Says Hardaway: "At its best, e-commerce will indeed provide tremendous cost savings inherent to the procurement practices that most universities use. Decision-making is decentralized, and Internet-based approval-routing mechanisms speed up processes of acquisition. Combine this with catalog-content type functionality that not only speeds up approval routing, but also dynamically changes and improves the speed with which one can affect the delivery of a material, service, or a product." For Emory, the investment in online purchasing is projected to translate into direct and indirect cost savings in excess of $10 million over a five-year period.
Hardaway notes that some colleges and universities were slow to embrace e-commerce for procurement, because the early models of the technology failed to provide solutions for non-standard, non-catalog products. For example, a vast array of scientific supplies for university researchers is comprised of specialized items. These products, explains Hardaway, are frequently perishable items with short half-lives, they may not be something routinely carried in the typical catalog but are acquired every day by IHEs nonetheless.
To meet this challenge, newer e-commerce products have emerged; they are retooled, refined, less costly, easier to use, and more functional than their predecessors were. "The latest products allow you to diversify your vendor database/community with a lot of the one-time, specialty-type procurements that routinely crop up in an educational environment," says Hardaway.
Looking ahead, as colleges and universities compete for students and look for ways to provide new and improved services, e-commerce will no doubt factor into their short- and long-term strategic visions. Simply put, the potential for schools to boost their fiscal performance with the latest e-commerce solutions, while at the same time being able to provide unprecedented benefits to their constituents, grows stronger by the day.
"The advantages of e-commerce are worth any potential risk, as long as you build into the e-commerce model all of the diversity, approval, and security issues that you currently have with your manual model," says Hardaway.
"It's the way the times are now," concludes Massey. "The technologies associated with e-commerce provide a type of independence for the customer that is unbeatable."…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: E-Commerce: Your Business Solution: For Solving Problems across Multiple Areas of Campus Business, E-Commerce Is Unbeatable. (Online). Contributors: Goral, Tim - Author. Magazine title: University Business. Volume: 6. Issue: 1 Publication date: January 2003. Page number: 40+. © 2009 Professional Media Group LLC. COPYRIGHT 2003 Gale Group.
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