Source losers

Last Tuesday the Monroe County Council sent a letter to IU expressing its members' unanimous opposition to the University's plans to outsource services such as the IU Motor Pool and Bookstore to private contractors . The Council is concerned that, if employed by private companies rather than IU, workers will see lower wages and benefits -- in particular, the loss of the ability of them and their families to attend IU at reduced rates. And, the Council said, IU's decision could have wider implications -- producing a demonstration effect that will lead other local companies to turn to outsourcing, driving down county-income tax revenue.\nIU, on the other hand, has argued that outsourcing these services will allow the University to cut costs and divert resources to its core academic programs -- a necessary measure in light of meager state funding and pressure to keep tuition low.\nThe editorial board finds validity in both arguments. It's easy to see how turning over University services to companies that specialize in those services could make them more efficient by lowering costs and perhaps raising quality, while allowing IU to focus on its key products (so to speak): research and teaching. Indeed, by becoming a more efficient organization, the University could better serve its two oft-competing goals: excellence (more funding for top faculty, resources, etc.) and accessibility (more funding for financial aid, scholarships, etc.).\nAt the same time, it's easy to see why the Council is nervous. Outsourcing could mean lowering the quality of life for members of the community, possibly removing jobs from the community altogether. Students pack up and leave after four or five years -- staff members don't. Not to mention, outsourcing hasn't had a perfect track record in terms of efficiency, either. Some companies find that, in turning functions over to others, the effects of the loss of control -- say, over product quality or organizational coordination -- cost them more than the expected savings.\nAll this is reason, then, for IU to move slowly, to tread carefully in this outsourcing experiment -- to see how a privatized motor pool works out before launching into \neverything else.\nMore than 20 years of organizational change in the private sector has shown that it's probably inevitable that outsourcing has come to something as large and complex as IU. Centralized hierarchies simply aren't efficient enough to compete with decentralized organizations (and if you think this doesn't apply to universities, be prepared for a shock).\nBut this doesn't mean IU can't try to get the best possible outcome for both town and gown. In the bidding process, the University should look beyond the bottom line to make deals that offer the best long-term outcomes -- outcomes that must take the good of employees and the community \ninto account.\nSo, if we have to outsource, let's do it right. We'll be stuck with the changes for a while.