Maximum profit and ROI in distance ed: planning to refine or launch your online learning programs? Learn from the winners - Online

University Business, May, 2003 by Sean Robert Gallagher

It's no secret that the higher ed community has recognized that growth in online distance learning is exploding. In fact, our most recent estimates (Source: Eduventures.) indicate that nearly half a million students were enrolled in fully online distance learning programs at Title IV-eligible, degree-granting institutions in the 2001-2002 academic year. This equates to an estimated $2.4 billion in tuition dollars--not an insignificant figure. What's more, as enrollments in these programs continue to grow at more than 40 percent annually, the 2002-2003 academic year should see nearly 5 percent of post-secondary students (or one in every 20) studying entirely online.

Still, planning for and achieving such rapid growth can be an immense strategic and tactical challenge for colleges and universities. With so many institutions already online and seeking to scale the growth of and refine their programs--and many more seeking to launch their first online course offerings--it's essential to learn from the experiences of other IHEs with programs of scale or note that have been particularly successful in creating strategies for launching effective and profitable online distance learning programs.

TOP-DOWN, INSTITUTION-WIDE MENTALITY

While the genesis of online learning programs varies from institution to institution, many have arisen from continuing education arms, distance or extended education departments, and individual schools and colleges within a university. Many of the more successful IHEs involved in online learning have recognized that formulating an online distance learning strategy must be at the highest operational level: an "enterprise-wide" strategy that takes into account the operations of programs, departments, faculty, and administrators across the institution. The strategy should have a clear set of objectives, and it must address a variety of critical program requirements--an understanding of which is possible only through the involvement of a high-level decision-maker and/or a cross-functional team of stakeholders representing various constituencies within the institution.

ALIGNING PROGRAM WITH INSTITUTIONAL MISSION

Perhaps the most fundamental question in creating a strategy is, "How does the online learning program align with the institution's mission?" Much has been made of the failures of various for-profit spin-offs, as "traditional," non-profit IHEs sought to capitalize on the soaring stock market of the late 1990s and the promise of the Internet. But in many cases, these initiatives failed because they hastily sought profits without a tight alignment with the institution's larger mission. Success for most IHEs is not measured in profits generated, but in successful student and institutional outcomes. Many successful online learning programs are driving these outcomes in support of institutions' academic missions.

In fact, examples abound of online distance learning programs created as a key component of broader strategic goals. Santa Barbara City College, a two-year IHE in California, established its Online College in order to better execute its larger mission of serving its local community through accessible, flexible programs. The University of Central Florida, one of 11 IHEs in the Florida state university system, launched its online programs within the context of its goal to become the country's leading metropolitan research university--while addressing issues of access, quality, and cost. Bismarck State College (NO) and Portland Community College (OR) both created programs as an extension of their missions to serve the community through offering in-demand programs online. As an extension of its long history of reaching students through emerging technologies, Regis University (CO) moved from offering distance learning courses via videocassette and cable TV, to delivering courses via the Web. As institutions that are concerned with generating profits, mid-Atlantic-based Strayer University has utilized online distance learning to provide classes tailored to the needs of working adults, as has the poster child for success in online learning, the University of Phoenix Online. Both of these institutions focus on providing educational programs to working adults in formats founded on convenience and flexibility; maintaining that focus and efficiently scaling their online learning programs enhances the institutions' bottom line.

LEVERAGING THE STRENGTHS OF FLAGSHIP PROGRAMS

But while online distance ed greatly expands the pool of potential students, it dramatically heightens competition in certain disciplines and student demographics, as the physical barriers that confined many IHEs to primarily local competitive markets are broken down. Like it or not, in the online environment, certain types of courses and programs become relative commodities. In seeking a degree in business, education, technology, or another popular and widely offered field, online students have a world of choices. Institutions in a particular geographic area that previously attracted local students on the strength of a given program or curriculum now face direct competition for that student from an institution that may be 3,000 or more miles away. In other words, online, the state college in Florida now faces new competition for enrollments in its nursing program from a small, private university in Oregon; both are equally accessible to the Web-based student in Chicago. While historically, students have been willing to relocate to enroll in the program of their choice, that is the major economic and competitive difference today--they no longer have to.