Inside tips for better online ed: don't just envy the University of Phoenix, learn from it

University Business, July, 2004 by Joseph C. Panettieri

If online education is such a Lucrative opportunity, why do so many distance Learning projects fail? That's the key question many universities are struggling to answer as they prepare their budgets for the 2004-2005 academic year.

In fact, in recent weeks, university presidents and trustees have been sequestered behind boardroom doors, trying to estimate next year's tuition income from traditional classroom settings and online endeavors. Some trustees surely demanded more information about long-term Internet revenue opportunities--and failed distance learning projects from years past. And it's no wonder. For example, one online education company that spent more than $100 million developing a best-in-class distance learning platform. Yet the company's online courses attract fewer than 1,000 students. That's a development cost of $100,000 per student--a horrid return on investment that would get most university presidents fired.

Still, for-profit education companies and some universities continue to spend lavishly on their distance education programs. In some cases, pure envy drives the digital pursuit. Instead of focusing on students' needs, many traditional universities dream of competing with the distance education arm of University of Phoenix (www.uopxonline.com), which had 99,000 online students as of February. During the first six months of its current fiscal year, the university's revenue grew a stunning 59.3 percent to $361.8 million. It's not surprising that University of Phoenix's parent company, Apollo Group Inc. (www.apollogrp.com), is a Wall Street darling. Shares in Apollo have more than doubled over the past 12 months.

In years past, business professors told their students to analyze dominant organizations like Microsoft Corp., up-and-comers such as JetBlue Airways Corp., and Fortune 500 veterans like General Electric Co. Today, those same business professors, their students, and university officials are captivated by the University of Phoenix's spectacular growth. They read about the online university's success in the pages of BusinessWeek, The Wall Street Journal, and The New York Times. Trustees of brick-and-mortar IHEs call their university presidents and demand to know, "How come we're not in that market?"

THE REAL PROBLEM

In fact, most universities do offer distance learning programs. But many of them don't live up to their hype. In some cases, immature technology is to blame for the online woes. Yet far more often, distance Learning initiatives fail because of internal cultural issues across multiple departments--academic, financial, marketing, and so forth.

Combat resistance. I'm wilting to bet that some of your own institution's professors experienced culture shock when your university asked them to teach online courses. That's cause for alarm: You can have the best online toots in the world, but they're useless without buy-in from your faculty and staff. What can you do about such resistance? Instead of making blanket demands of your faculty, ease them into the online learning world. First, identify a few progressive professors who are willing to be early adopters (read: guinea pigs) when you're rolling out new distance Learning tools. Then, have your IT team--whether internal or outsourced--work closely with your early adopters to design intuitive tools for online education. And don't forget to ask the students what they want. Too often, we forget that students are customers. Sometimes, we're so busy preaching about the value of education that we forget to ask our customers how we can serve them better. Be sure to include alumni in these exploratory conversations--especially those who earned undergraduate degrees from your university and are now seeking online MBAs and other graduate degrees.

Shop the competition. Your faculty and administration should also do some comparison shopping. You know the University of Phoenix is successful, but do you know why? Has anyone at your own institution taken a University of Phoenix online course? Without this hands-on competitive research, your university isn't qualified to effectively position its online programs in the broader marketplace. You can bet that Toyota's engineers test drive--and disassemble--Honda automobiles regularly. To stay competitive in the digital world, IHEs would be wise to take a similar approach. Once you've got a good feel for the competition, Let your early adopters and target customers (that is, prospective students) test graphical user interfaces, Web sites, and other core components of your distance teaming system as it is developed.

Go for the standards. All of these systems should be designed on established technology standards, such as Ethernet, TCP/IP, Linux, Unix, Windows, and SQL (structured query Language). And stick with mainstream software tools such as Blackboard (www.blackboard.com) and well-known video streaming software from RealNetworks (www.real.com) or the like. I've seen far too many distance education strategies fail because the system was designed on proprietary hardware or software that mainstream IT managers and programs didn't know how to support.