Editor’s Note: The following article was provided to CR80News by Bruce Lane of the CBORD Group in response to our June editorial titled, “Why is it so difficult for campus card system providers to make a go of it?”
Thanks for providing such a valuable newsletter and resource for the campus card market. In response to your June Editorial, I would like to provide another perspective … here goes:
“Why is it so difficult for campus card system providers to make a go of it?”
This is a pretty difficult business, this campus card system thing. We provide a mission-critical system that touches the lives of many/most on campus. Our systems help control some very basic functions and necessities, like food, facility entry, privilege control, and access to snacks (!). If “the thing don’t work” our customers are in trouble and we are in trouble.
The key question is: Why can so few companies actually do a good job of this and make enough money to stay in business? And this is a valid question as there are a raft of failed efforts, as noted in the June editorial (there are others!), but there are also some very good, solid examples of the other side of the coin: successful, solid, dependable system suppliers.
The CBORD Group, Inc. has just concluded the best year in our history, with record growth and healthy earnings. And we did it with a fee increase of 1.6 percent over last year. General Meters is another vendor that has been around for a long time and enjoyed a good year. What makes these companies different? Read on.
Is the Market saturated with vendors? Of the 3500 institutions cited in the editorial, how many really will invest in a campus card system? The largest part of that group is community colleges and very few have adopted campus card systems to date. Could that sector grow? I hope so, but it will probably be quite slow growth. So, if you look at the residential colleges, I bet you will find that most already DO have campus card systems. Does that then mean there are too many vendors? Probably.
Are the profit margins too slim and the sales cycles too long for companies to make it? We are asked to provide these systems, and maintain them, for relatively little money, compared to other mission-critical, enterprise systems on campus. These are systems that administrators hope will reduce their costs of providing and managing new, targeted services to students. These systems are not just window dressing. They are a critical tool to help manage the campus business in the direction it is evolving!
A long sales cycle? We do, jokingly/lovingly, have prospects that are members of the 3 year club, the 5 year club, the 10 year club, but we are confident they will buy something–someday! It is a feature of our business to understand how schools come to decisions and then implement them. It takes some patience and some financial fortitude.
Yes, there is not a big profit margin in campus card systems; there is a tremendous, continuous investment needed for new features and new products; and support services are demanded to be at a high level of competence and availability. But again, there are examples of companies that manage themselves to compete in this environment. They understand the university budget cycle; the pace and style of college committee decision-making; and how to staff and market accordingly. It is basic business. Don’t spend more than you make and what you do spend, spend it on what is going to yield results (and future sales) to your customers.
Is the solution set being offered simply wrong for the majority of campuses? The editorial posits that all the vendors are pursuing the “big schools”. The trade press and professional conferences have long been the ones that devote all their attention and seminar time to the same “big” campus-wide institutions over and over again. In fact, there are many, many small and medium-sized institutions where you can do more with your card in the campus-wide system than on many of the big campuses. CBORD has its majority of customers in what would be termed the small and medium sized campus world. While we serve many very large operations, our systems and prices have fit the whole spectrum of the market. We serve over 550 institutions of all sizes.
But here is the difference: If you look at the list of “former” system vendors shown in the June editorial, you will hopefully remember what they came to sell you–other stuff! When you look at a CBORD or General Meters or even a Diebold, their goal is not to use a campus card system to get on campus in order to sell you and your students other products and they are not trying to sell a technology that is perhaps sexy but likely a poor fit for the wired campus world.
The goal is to provide a good, well-supported campus card system. There is a pretty direct connection between those vendors with that focus and those with success/stability in the marketplace. And when you are looking for a mission-critical, enterprise system, aren’t stability and dedication to the market some pretty important qualities?
Thanks for listening. I have to go now. Its installation season!
Bruce R. Lane
The CBORD Group, Inc.