Negotiating an OPM Contract

As the Online Program Management (OPM) industry matures, universities increasingly enjoy the opportunity to negotiate a more customized arrangement to accelerate the growth and visibility of their online programs.  But, with expanded opportunity comes increased responsibility to negotiate an agreement that advances the institution’s mission while minimizing potential liability to its operation and reputation.  
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While avoiding the “one-size-fits-all” approach to OPM contracts, universities often overlook a number of key contract dimensions that may result in an agreement that suffers from poor partner relations, weak program momentum, and even an early dissolution of the executed agreement--with a concomitant loss of opportunity and momentum.

Based on numerous consultations helping universities and OPMs create mutually beneficial agreements, we recommend special attention to a number of key dimensions to clarify partner roles and manage expectations:

• Length of Contract
  
  

Don't assume that OPMs always want a long contract and universities always prefer a shorter agreement.  Focus instead on the mutually desired outcomes of the partnership, recognizing that shorter agreements provide increased flexibility, but lack the extensive financial commitment afforded by a longer arrangement.

• Scope of Services
  
  

Many OPMs now offer an “a la carte” approach to their service agreements in addition to their typical comprehensive partnership contract.  For universities, this disaggregation of services permits a more targeted solution to their online challenges, but also opens the door to contracts that fail to make critical internal choices about key partner relationships and the institution’s ability to deliver scalable and competitive services.  
For example, universities often rely solely on inflated and/or subjective internal assessments of their technological capabilities, platform support services, course development capacity, and student support infrastructure when determining which services to include in the OPM contract, only to discover later in the partnership that they can’t deliver--or can’t deliver as cost effectively as the OPM.

• Marketing and Recruiting
  
  

These services represent the ones most desired by universities, but also the most common sources of disagreement and contentiousness throughout the agreement.  During the sales and contract negotiation phases, OPMs promote their expertise and effectiveness in building client brand and increasing enrollment, yet often go quiet or revert to more conservative language and projections once the partnership is implemented--usually in the hopes of under-promising and over-delivering results.  

Conversely, universities frequently over-estimate the power of their brand and the attractiveness of their academic programs, often entering OPM agreements with lofty visions of instant, worldwide success.  OPM partnerships require a thoughtful, rational pre-contract assessment of each other’s capacity and ability, as well as a realistic view of enrollment growth and sustainability.  Control of key marketing assets, such as search terms, marketing channels, landing pages, and institutional messaging requires a transparent approach between the partners that supports all aspects of the university enrollment mix, while building online as a strategic focus of enrollment expansion.

• Definition of Success
  
  

For most partnerships, the development of a realistic pro-forma during negotiations remains an elusive and difficult process.  While OPMs want to create a winsome and exciting vision of the future, universities add to the potential misalignment of projections by believing that only dramatic results can justify a revenue-sharing relationship and the outsourcing of key services.  The product of these underlying forces (pro-forma, business case, or operational plan) often skews to unachieveable and and/or unsustainable goals that result in finger pointing and accusations of non-performance.  Successful partnerships create realistic implementation strategies that utilize the combined strengths of both organizations to advance the university’s mission, expand its programmatic reach and impact, and mutually enhance the financial prospects of both organizations.

JenEd Consulting offers extensive support to universities and OPMs in the brokering and negotiation of contracted partnerships.  Let us know how we can help you develop an achievable and sustainable relationship.

Dr. John E. Neal
JenEd Consulting, LLC

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