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Effective Student Billing Strategies for Success

Posted: 04/1998

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Effective Student Billing Strategies for Success

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.


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