Posted: 04/1998
By Sherry Manning
One of the most exciting telecommunications applications on campus today and one of the most challenging to manage is student billing. Telecommunications technology, student demand and economies of scale in buying long distance have come together at the same time in history to create enhanced service for students, lower overall costs for telephone and long distance service and new income opportunities for educational institutions.
The University of Wyoming, for example, paid for its new telecommunications system with bonds financed by redirecting funds that had been going to the local telephone company for student telephones--about $500,000 annually. Today, the university provides state-of-the-art telephone service to all residential students with its own system, at less cost to students and the institution and no time delays to students for installation. In addition, income derived from charging for service and buying long distance in bulk has allowed the university to invest in new voice, data and video networks for the university, something that would have been impossible to fund if it hadn't taken over responsibility for telecommunications.
With the enormous opportunity in student billing applications for colleges, universities and independent schools such as the University of Wyoming, many new management challenges unique to the student billing application face business officers and telecommunications administrators, and many important lessons have been learned from the experiences of others.
In theory, the student billing application has enormous potential. Enhanced voice, data and video facilities everywhere on campus enrich the learning environment on campus. The incremental revenue and additional fees of hundreds of students using voice, video and data applications can finance enhanced facilities on campus, enriching the living/learning environment for students, faculty and staff. But in practice, providing student long distance on campus is a formidable task, a complex business application riddled with the challenges of any business: marketing, customer service, billing, accounting, record keeping, management and collections. The understanding and assignment of responsibility of each business function is essential to the success of the application.
In many institutions, student billing is managed by telecommunications or information technology people, who rarely have the inclination, the background or the support staff to manage a successful student billing application. They know their switch and the network; manage adds, moves and changes of telephones and facilities; manage the inventory of phone instruments; optimize the network; and often run fiber optic cable on their own. However, they have little background to run a business, and even less inclination to develop a marketing program or provide customer service. Their business officer will assume telephone service (it's provided by God, after all), but then will ask, "Why are student receivables so high?" "What are we doing about that?" "We have a mother who wants to know why the city code wasn't listed on the bill?" You can see the dilemma.
It is essential for an institution to make the distinction between the business and the technical functions of the student billing application. Business functions deal with service, pricing, marketing materials, communications with students, customer service center hours and response rates, collections and receivables management. Technical functions deal with the switch, the cable and the network. Most student billing applications that fail do so on business functions, not on technical ones. Have you ever heard complaints about dial tone, lack of cable or the type of switch manufacturer? Complaints from students are related to bill formats, customer services center hours, treatment by service representatives and timely, understandable and accurate bills.
So, for a successful student billing application on campus, an institution needs to focus on the business side. For most institutions, the business functions of the institution reside in the business office, and many business offices manage successful student billing applications. Yet the staffing levels, customer service culture or politics of the organization may make it impossible for the business office to assume responsibility for student billing.
If this is the case, we recommend one of two courses of action: (1) manage the function within the university--duplicating the functions of the business side of the application within the telecommunications or information technology departments; or (2) outsource the management of student billing, with special attention to the management of the business functions. Many larger universities have had great success with the former strategy; they build a virtual telephone company within the university. Ruth Mikelecki at the University of Nebraska has been very successful in this model, building an entire customer-oriented telecommunications infrastructure and serving the entire university community and greater Lincoln, Neb. But other smaller institutions, such as Wesley College in Dover, Del.; Williston Northampton School in Easthampton, Mass.; and Appalachian Bible College in Bradley, W.V., outsource the application to the Educational Communications Consortium Inc. (ECCI), with special attention to the business functions. The application and customer service has been extremely successful enhancing service for students; creating new revenue for the institution; lowering costs for both the students and the institution; and inducing only a small additional workload on the institution. In all cases, student billing is managed by the business officer, and outsourced to ECCI with special strengths in marketing to students, billing, accounting, collections and receivables.
The outsourcing decision for student billing has been made poorly in many institutions, leading to horror stories in the business. Again, without a focus on the business aspects of the application, student billing will not be successful. One institution we know received no bills for students throughout the year, only to have a summary bill delivered in May with an immediate demand to students to pay. Several students withdrew from the institution over this issue. A group of institutions served by another company experienced poor management of authorization codes, and student receivables quickly grew out of control. Receivables are neither a technical problem nor a telephony problem, but they became a serious management problem for the institution, affecting its bottom line and the credit rating of the students, and put the graduation of several students at risk. Choosing a company whose primary business is laying cable, or a telephony software house that doesn't include marketing or student service as a student billing partner may not be a good decision.
Beware of long distance carriers. The people who manage long distance networks, write tariffs and install switches don't seem to know very much about educational institutions: the students, the academic calendar, or the culture of service. Richard Bartrem, vice president for finance and administration, Lawrence Technological University, says, "The student billing application is exceedingly complex; one cannot underestimate its management. Long distance carriers do long distance. They don't know schools, and I don't think they understand this application."
Our experience at ECCI is that the carriers come with a different understanding of the division of responsibility in the student billing application than schools do. Carriers focus on network and trunking issues as well as price per minute, and assume little responsibility for student service or collecting receivables. As a result, commissions due to schools are late or not forthcoming. In addition, carriers may actively compete with students directly with a variety of specialized and targeted products such as 1-800-COLLECT or 1-800-CALL-ATT. Using advertisements in the campus newspaper and telemarketing to students, these products create real confusion on campus about long distance choices and dilute student participation in the student billing application on campus.
Managing student billing takes real attention to detail. It requires an understanding of educational institutions and the students they serve. It integrates the technology of telecommunications, but the basics of the application are business ones. And it is the management of the business functions of the application--marketing, customer service, billing, accounting, collection and receivables management--that determine success.
Dr. Sherry Manning, an educator and businesswoman, has served as president of two colleges and trustee of several. She is chair and CEO of ECCI and the ECCI-NACUBO long distance consortium, the nation's largest consortium dedicated to long distance service for higher education and independent schools.
