ExtensionEngine Blog

How to choose an Online Program Manager (OPM)

It used to be simple. If a university wanted to create an online program, they had two choices. One was to outsource to an Online Program Manager (OPM). The other was to do it in-house. Neither was perfect, but both had advantages.

But the world does not stand still and now there are more choices. Choice is good, but more options require more work on the part of the buyer.

Eduventures recently released a research report on the OPM market, titled “Expanding The Opm Definition” — a great start for universities trying to understand these options.

The report was authored by Eduventures’ Principal Analyst for Online and Continuing Education, Howard Lurie, and focuses on the evolving landscape of companies who provide services to help higher education institutions develop, maintain and market online programs.

While the full report is only available to Eduventures’ clients, we’ve outlined a few of the key points here and offer our point of view.

We've also asked Howard Lurie to join us on a webinar to discuss two recurring issues some higher education leaders face when developing online programs. You can view the recording here.

 


We teamED up with Eduventures

What is the role of standardization in online learning? Eduventures and ExtensionEngine have an unscripted discussion in this recorded webinar.

VIEW THE RECORDING


 

A brief history of building online programs

In the old days (ok, not the old days for most of us, but think of old as a millenial would — like 5 years ago) OPMs emerged to provide services to help universities launch online programs.

Though each OPM (think 2U, Academic Partnerships, Wiley, Pearson Embanet) was a bit different, for the most part they had a standard model — the OPM put up the capital, worked with faculty to develop the courses, and did all the marketing and enrollment management.

For this, they took a share of the revenue, anywhere from 30-80%, and required a long-term commitment from the institution (which leads to the overused joke that OPM stands for Other People’s Money).

The other option:

A university could use their Learning Management System (LMS) (think Blackboard, Canvas, Sikai, Moodle) and leverage internal staff to create courses. Most courses built on an LMS are pretty standard — video, text, assessment.

And while this in-house model had the advantage of not handing away millions of dollars in revenue, is also had the disadvantage of having to do everything yourself. You had the pleasure of getting faculty on board, getting funding, getting institutional alignment, getting support from marketing — you know, all the easy and inexpensive stuff.

Because this option actually isn’t easy and online is still a new world for most, OPMs thrived.

A new set of categories for defining OPMs

Stepping back into the present, we’ve seen an expansion of the OPM market.

As Eduventures points out, “the traditional OPM definition has neglected to recognize a broader range of service providers developing more customized and flexible service models. These providers also experiment with alternative business models.”

Eduventures noted two key trends in their report:

  1. “The development of alternative financial models to the classic OPM revenue-share agreements”
  2. “The development of unbundled service tiers as a contrast to the classic, end-to-end OPM provider model.”

And so, we have a new set of categories.

They have expanded the definitions to capture alternative models and the changing landscape. The report now classifies service providers along two dimensions: the extent of the services provided and the initial external investment.

One of the things I like about Eduventures new definitions is that they don’t characterize the categories as good or bad. They just help institutions understand that there are now more choices and new options.

As they note “the marketplace of online service providers has become more diversified, specialized, and differentiated. These new providers reflect important market dynamics that have emerged over the last several years.”

For example, ExtensionEngine is identified under these two categories:

  • Selective provider — “companies that may focus on a particular content vertical, or deliver a targeted range of online program services in which they have particular expertise”
  • Limited initial external investment — “fee-for-service models predominate, in which institutions retain complete control over enrollment revenue, but pay an up-front fee to their service provider”

And while a few years ago an option like ExtensionEngine really didn’t exist, today it, and others, do.

How to choose an OPM

The Eduventures report primarily focuses on the operational and business options, which are important. But there is more to consider when choosing a partner for building online programs or courses.

Here are the steps to take:

Step 1: Define the Learning Experience

Call us idealists, but we always encourage institutions to first consider the learning experience they want for the student. Defining this first (which, surprisingly, we see many institutions fail to do) helps reduce the options and focus your choice.

Ask:

  • What about our pedagogy must be captured in the online experience?
  • Is a high quality online experience an absolute requirement, or if it is too costly, will we accept more traditional online learning experience?
  • Are we going to create a unique experience that excites our students and faculty and stands out in the market?

Step 2: Define the Operational and Business Requirements

Once you define your learning experience, then focus on the operational and business issues.

Think about the dimensions described above: “the extent of the services provided” and “the initial external investment.”

Ask:

  • Do you really want to do revenue share? If you do, go with a traditional OPM. If you don’t, you would look at vendors who don’t require that, but you will need to find capital.
  • What internal competencies do you have today? Which are important for you to build internally? This will dictate where along the “extent of services provided” continuum your service provider will need to be. If you are looking to outsource everything, you should go with a traditional OPM. If you are looking to build internal capabilities, you might choose a vendor with specialized or selective services.
  • And there are more questions — too many to cover in a blog post: Will you focus on a highly differentiated, high-end program or look to build enrollment through heavy marketing and enrollment management services? What is your go-to-market plan? How will you get this project off the ground without external support?

Once you have answered these questions, speak with many service providers, not just the traditional names you’ve known for years. There are some newer companies doing very innovative work.

As noted in the report “Eduventures’ research suggests that the growth and increased diversification in the online program market requires a broader understanding of the range and diversity of service providers. There is clear evidence, however, that there is a healthy demand for customized, agile solutions to the steep slope of online program development.”

Take it a step further

We've asked Howard Lurie, author of the Eduventures' OPM report, to join us on a webinar to discuss two mistakes some higher education leaders make when developing online programs. You can view the recording here.

ExtensionEngine has also developed a number of resources to help with these decisions (and yes, we are biased, but we want to help institutions find the right model for them — it does neither of us any good if we are not a good fit).

VIEW RESOURCES

Chat with an expert

We can also provide a consult with Dr. Scott Moore, who has explored these decisions from a different perspective — former faculty member at Michigan Ross School of Business, Dean at Babson College and now Principal Learning Strategist at ExtensionEngine.

SCHEDULE A CONSULT