Understanding the Financial Considerations in e-Learning Projects

1. e-Learning:markets and pricing Paul Bacsich Understanding them? “Financial considerations for e-learning projects”, Birmingham, March 2004

2. Contents • Myself • Some costs-related reminders • Assessing the size of the market • Business plan • The commodity value of e-learning • Funding Councils’ funding of e-learning

3. Myself 1 • Currently two main part-time roles • Director, Matic Media Ltd • Director of Special Projects, UK eUniversities Worldwide Limited: research and competitor research on virtual universities and MLEs • And some other bits and pieces: • External Examiner for several distance learning programmes • Treasurer, Association for Learning Technology • Member of JISC Committee on Networking

4. Myself 2 – formerly • Jobs: • Professor of Telematics and Head of Dept of Networks and Multimedia, Sheffield Hallam U - several DL courses • Many years at Open University finishing up as Assistant Director, Knowledge Media Institute • Roles: • Several “costs of e-learning”, evaluation and policy studies for EU, JISC, HEFCE, LSC, DfES • Many years work on “virtual university” analyses, especially critical success factors • E-University studies for HEFCE since 2000 • Ran several big projects in e-learning including the SHU Virtual Campus

5. Some costs-related reminders

6. Problems of different perceptions • There is slowly increasing agreement on the methodologies of costing e-learning • So why is there a dilemma where Education see “No Significant Difference” whereas Training sees “Return on Investment”? • The challenge is to find a uniform evaluation/planning methodology, including costs, which copes with a world without borders • Borders are not only geographic

7. Hidden Costs – the bane of financial planning • Increased telephone call and printing bills for students due to Internet usage • Entertainment expenses “necessarily” incurred by staff at conferences but not reimbursed • Administrator time answering student queries • Support costs of a new Learning Environment • Costs of content - “created in one’s spare time” • Costs of institutional collaboration • Costs of conformance to standards

8. The other stakeholders

9. Course Lifecycle Model Three-phase model of course development Planning and Development Maintenance and Evaluation ProductionandDelivery

10. Assessing the size of the market

11. Hard data • “Hard data on student demand for distance learning in overseas countries is difficult, if not impossible, to locate” (Fielden, 2000, for HEFCE) • Commission your own research, do not share • Do not be a slave to market research. A lesson of the dot.coms: products can create markets • “Brand” is elusive, time-lagged and subject-dependent • What would you do if you found 1,000 students? • Do not assume your (country’s) pedagogy will transfer

12. Competitor research • Whatever the size of the market, it will usually be contested - there are few unoccupied niches • Attractive subjects, eg MBAs, are over-contested • Focus on student preferences, views, including value proposition to them • Make sure you compare like with like - what is an MSc? • Try to track non-sales (dept store analogy) • global pricing is rare; global syllabi also

13. Business Plan

14. Can use HEFCE’s planning model

15. The commodity value of e-learning

16. What does e-learning content cost? • average £12000 per study hour, but very large standard deviation • 10% of this for simple material • could one aim for < £1000 per study hour? • This is still around £8000 per CATS point.

17. Rule of thirds 1: Study of “engaging” multimedia: expensive 2: Study of existing or slightly modified (learning) resources: mid-price 3: Working on assignments (maybe in collaboration): cheap

18. How to reduce the price • Forget research • Go for templates • Economies of scale: long runs of similar material • Professionalism • Outsource to specialists (outside HE/FE) • Outsource development - and support - to cheaper countries close to UK culture (provincial Canada, Australia, New Zealand)

19. Funding Councils’ funding of e-learning

20. Funding councils - issues • Different home nations • I shall focus on England • Different post-16 regimes (HE and FE) • Different policies at different times

21. Funding councils - HEFCE • Funding (for operational courses) is now by formula, mode-neutral (but not subject-neutral – discuss…) • Not quite true… • Access premiums • Studies on differential effects, in particular “The costs of alternative modes of delivery” (JM Consulting, August 2003) • One suspects a slow drift away from mode-neutrality, perhaps preceded by complex premiums • Lots of HEFCE funding for development and special initiatives in e-learning (TLTP, CETLs, etc), and the ongoing IT aspects (JISC, JANET)

22. Funding councils - LSC • Funding (for operational courses) is by complex formula, but NOT mode-neutral • Several studies to think about simplifying this • Some LSC funding for development and special initiatives in e-learning (not as much as for HE – if one excludes Ufi?), and the ongoing IT aspects (JISC, JANET) • Issues • What about Foundation Degrees, HE in FE, etc?

23. Funding councils - DfES • DfES e-Learning Strategy • The overarching strategy under which HE and FE (and ACLs now) will operate • Beginnings of integration of schools, via the borderlands (6th form colleges) – UKERNA, etc • Studies on long-term embedding and sustainability of e-learning • One suspects this means “no special money”

24. Further reading(on costs) http://www.shu.ac.uk/cnl/ Thank you for listening Paul Bacsichpbacsich@ukeu.compaul@matic-media.co.uk