Are you investing wisely in EdTech data integration measures?

EdTech publishers want to provide robust, secure, easy-to-implement data and other integration measures for their clients. No argument.

However, a publisher's initial data integration decisions can lock in dependencies on external resources for which they have no control over the measures provided, services, and fees.

There is a common business saying, never allow anyone to come between you and your client. 

Once you implement fee-based data integration services, every day, your clients and you will become more dependent on them. 

Such fee-based data integration services for publishers… and their clients are costly from day one.

Publishers must increase their prices to maintain margins, which are passed directly on to clients. 

Publishers carefully arrive at a target price. Such measures can increase prices to the point that established clients might start looking at other competitor options. 

Client retention is earned year after year, and with all things equal, I have seen pricing tip the scales quickly. Why risk opening that door?

Let’s advance two years into the future after implementing fee-based integration services.

Your integration service provider introduces a rate increase.

This is where the publishers, CEOs, and CFOs who agreed under internal pressure and made the final decision to take this path start to feel anxiety, which grows every year thereafter.

The catch here is also the terms of the original and eventual new contract. With the original contract, a publisher invests much time and effort running many different cost\pricing scenarios and negotiates the terms. If examined closely, these terms are not great, but they are the best they will ever be.

With this increase, there is no negotiation. Essentially, the publisher has no choice.

Over the last two years the publisher has moved their existing and new clients to this fee-based integration service. To take this away from their clients would be disruptive, at the least for them and internally.

In these two years, the total amount the publisher has paid for this service increases annually because they have pushed the service they have implemented onto their clients and the cost grows substantially.

Does the publisher run the risk of raising their client prices again? 

Let’s further explore another possible complication that compounds this investment in fee-based integration services. 

An SIS provider representing 30% of the districts in the US decides they want to provide the same type of service and not provide this data to your fee-based integration service any longer.

Would you now have to purchase these services from both? 

Having to support two different sources will cause a disruption with your clients and internally.

The other reality is Data (rostering), LMS, and SSO integration measures such as OneRoster are constantly evolving with new methods such as EdFi and new resource driven functionality. 

In the US, implementing measures you own is typically your smartest choice in meeting each client’s expectations and the most cost-effective, EBITDA-friendly, investment.

I temper this with companies whose products are distributed globally, for example. The integrations can vary significantly from region to region. This is a much larger investment than just US integration methods, and it makes sense to investigate this.

The most successful companies across all markets are those that tailor their products to meet the specific needs of their clients and at a more competitive price than their competitors can match is always a positive impact on sales.

Finding the balance between buy vs. build is crucial for meeting client needs at the highest level, preventing client event losses, and offering optimal pricing that positively impacts EBITDA.

Your integration measures are as required as having a good product. The more they meet the needs within your market, the better you will be able to meet the needs of large and small clients, providing an exponential boost in sales on top of year-after-year retention.