OPM in the News – How Does That Affect Deals

OPM as a business offering has certainly been in the news lately

  • New deals continue to be announced, and the market and offerings continue to grow.
  • 2U announced not so good financial results, and the stock market reacted.  Shortly after, 2U followed up with a seeming shift in strategy, and a framework for OPM transparency.
  • The state of California has concerns with the OPM business model. The Century Foundation also raised a number of issues with the OPM business model for schools in a major piece. This based on a study of OPM contracts.
  • Commentators such as Phil Hill have questioned the depth ‘study’ that went into the TCF piece, but do not question the need for a thoughtful approach.

The current publicity around OPM may or may not lead to industry changes, so what are schools supposed to do in the meantime if they are already in an OPM deal or are maybe thinking about entering a new one? The answer, I believe, is simple.

  • Ensure you move forward thoughtfully….  Do not rush, do net get locked in too soon to a single delivery model, or worse to a single supplier.  
  • Whether a new deal or an extension of an existing deal:
    • Ensure the basic contract structure and content is fit for a contract that covers 10’s of millions of S’s in services.
    • Carefully consider and negotiate business terms. Supplier paper and talk of partnership are not viable if you want to retain future strategic flexibility.
    • Be very wary of anything that is presented to you as ‘standard’ or that is never deviated from……  everything is negotiable.

The world of OPM is changing; there are many reasons to move forward, but do so thoughtfully.

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