Questions: How will the institution get there? Will it be through online program managers (OPMs), internal development, fee-for-service external vendors, joint ventures, licensing, or acquisition?
Higher Education Strategy Series: This is entry #11 of this series. This page describes the whole series and provides links to all of the articles.
Details: The goal here is to address the organizational structure that the institution will use to meet its goals. The choices are varied and are foundational to the rest of the decisions.
Online Program Managers (OPMs)
Much has been written and said about OPMs (including by me) so I will not repeat that here; however, this is almost certainly the first basic decision that an institution will make when thinking about going online.
Internal development and fee-for-service vendors
Using internal resources and using fee-for-service vendors are usually seen as two separate options, but they are actually complementary pieces of the same approach. If an institution wants to use internal resources to design, build, run, and maintain a program, it is unlikely to have all the necessary resources right from the start. Fee-for-service vendors (such as Extension Engine) can fill in those missing pieces. This avenue can also lower the cost (and/or raise the quality) of a program in a way that wouldn’t be available to the institution if it tried to do all of the work internally.
For many decades institutions have cooperated in offering joint degrees. The complexity of both tuition transfer and the sequencing of courses means that these joint degrees are limited. Offering the courses online shouldn’t, in theory, reduce the number of joint degrees, but they haven’t made much of a mark yet.
One long-term, significant play in the market would be for multiple institutions (similar though not competitive) to invest in a technology platform that plays to all of their strengths. (This is similar to the free, community-sourced, educational software platform Sakai but goes further in cooperation.) The institutions could also share some of the development of introductory courses, minimizing any overlap of investment and giving each institution access to the platform that would otherwise be out of reach. It would also allow them to invest in the courses and programs that truly differentiate each institution from others.
Another approach that can be used is to license content or technology. The institution can actually choose to play on either side of this exchange. Just as Harvard Business School writes cases for other institutions to use in their courses, an institution could create online content for use by other institutions. The MIT Center for Real Estate created both an online case management tool and cases for that tool that can be used by both MIT faculty and faculty from other institutions. Further, the concept allows faculty from other institutions to create cases for that platform.
The more common licensing position is for an institution to use content or technology provided by others. This is clearly an approach aiming for cost leadership or being taken as part of a satisficing tactic, since it is explicitly based on someone else’s work. The savings accrued by taking this approach could be spent on some other feature, enabling the institution to differentiate itself that way, but by itself the licensing approach would not result in a winning competitive position in content or technology.
This is the most extreme and difficult to pull off of all of these choices. It’s also often the result of an existential crisis that could not be avoided. The acquisition of one school by another is not unheard of, but neither is it common; however, it has occurred more frequently in the past few years — Wheelock College, Kaplan University, Shimer College, Daniel Webster College, and others were all acquired recently. This is likely a combination of changing demographics and the rise of online learning (and its associated challenges).
When acquiring a college, the acquiring institution must see a strong strategic fit, financial benefit, and an ability to merge (or otherwise manage) the acquired resources (students, faculty, staff, campus, brand, etc.). This complexity will be layered upon the usual complexity of running an institution, so it should only be undertaken when the acquiring institution is on solid financial ground, with secure leadership and strong relations between the board and that leadership.
For this series, I am posing activities for an educational leader to complete. The unifying project for these activities is to define a medium- and long-term plan for competing and winning online.
- Is your program going to use an OPM? If not, do you have the resources to execute all that is needed to succeed online? If not, but if you want to, have you considered using a fee-for-service vendor to help get started?
- Does your program have any opportunities for using a joint venture with a friendly organization?
- Are there resources that your program might benefit from licensing? Are there resources that you would not consider licensing? These decisions should be related to the value proposition that you have defined for your program.
Feel free to reach out to me if you have any questions or comments.
Define and Act on Your Institution’s Strategy
Dr. Scott Moore has written a 15-part series on defining and acting on a higher education strategy to guide leaders during these difficult times. It is targeted at educational leaders who are participating in shaping their school's actions during and after the COVID-19 pandemic.