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Market Focus: Education -- Making CRM Mandatory for University Administration
Why higher-education spending on CRM is set to almost double by 2012.
For the rest of the August 2008 issue of CRM magazine please click here
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Many colleges urge incoming students, with their first steps on campus, to take a wide variety of courses to get a more complete education. The fear was that a student would only home in on one major course of study, and then forget about all other subjects. One analyst argues that some universities have failed to heed their own advice in terms of CRM -- and are only now starting to come around.

Speaking about the way universities handled CRM in the past, Nicole Engelbert, lead analyst of vertical markets technology at Datamonitor, and author of the study "CRM in the Higher Education Market," says, "Historically, institutions have used a collection of fairly limited point solutions on a departmental basis." Noting what seems to be an epiphany within these halls of higher learning, she adds, "Now they're saying, 'Gosh, this is expensive to do it this way and it's actually not providing our institution the value and functionality that we really need.' "

Hard numbers apparently support Engelbert's claims. According to her recent study, IT revenue from CRM solutions in the higher-education markets of the United States, the United Kingdom, Germany, France, and Australia will grow from $184.9 million in 2007 to $324.5 million in 2012, due to the purchase of new solutions and the expansion of existing installations. Engelbert goes on to explain that institutions finally understand the need for "more robust, more enterprise-class CRM applications in the higher-education market."

These enterprise-class solutions, she argues, can help to bring together the siloed data for the three crucial areas in higher education: recruitment, retention, and development. In turn, this will help create what Engelbert calls "the 360-degree view of the student." Institutions, she adds, "have really had to create a comprehensive view of a student that persists over time."

Keith Hontz, CRM development director for SAP Higher Education and Research (HER), agrees with Engelbert's view. He explains that colleges have been asking about how to incorporate CRM technology into multichannel recruitment, student retention, and donor/alumni management — and it's about time, he says. (See "Customers for Life," July 2004.) "I think universities have been sort of late to the game in terms of looking at these three areas," he explains. "They had a lot of legacy applications [and] older technologies from niche vendors that played in one of these areas, but I think universities are starting to take a much more holistic approach."

While seeking out complete enterprise solutions to paint a complete picture of each student is one major trend in the industry today, another shift lies in the delivery model for these solutions. Following extensive turn-of-the-century technological investments, the depreciation cycle for those on-premise initiatives is reaching its end point — and now higher education is one of many verticals finding itself facing a choice about software-as-a-service (SaaS). "[The growing recognition] of SaaS is the same for higher education as in the rest of the market," Engelbert says. "The difference for higher education is it was positively, vehemently against SaaS until 12 months ago. It's like a light switch has turned on." Hontz agrees that more institutions are asking him about on-demand solutions, but cautions against a pure SaaS model. "Everyone is very enamored and loves the low-cost per-user, per-month story," he says. "But at the end of the day, what they are not getting is complete integration."

Hontz suggests a happy medium, in which users allow the vendor to host the hardware piece, but then actually own the software and can tie that back into the vendor's investment and architecture. "It's the flexibility to bring up the environment quickly without having to actually procure hardware," he says. " 'We host hardware for you, outside of your data center, but then give you fully functional software that also connects back into the [overall] SAP system.' That's becoming a more attractive option with the universities I speak with."

Dr. Malcolm Woodfield, global business development executive for SAP HER, explains that no matter what delivery model an institution opts for, CRM must be able to prove its worth quickly and be able to clearly show how it jibes with a university's strategies. "What [they] really want to know as a president, provost, dean, or executive vice president is how [the data accumulated by a CRM solution] is benefiting [them] strategically," he explains. "They want to have that kind of enterprise picture."

With its endless amount of reading, research, and writing, higher education in itself can be a slow journey — and Engelbert suggests the benefits that CRM can bring to the table represent a similar journey of gradual realization. "Higher education is not a lightning-speed industry by any means," she says. "But the train is out of the station — and starting to pick up speed in the recognition that CRM is valuable."


SIDEBAR: Top 4 Vendors in Education     Source: Datamonitor

  • Oracle
  • RightNow Technologies
  • SunGard
  • Talisma, an nGenera company

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

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To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
Learn more about the companies mentioned in this article in the destinationCRM Buyer's Guide:
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