Shifting the Conversation

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Screen Shot 2017-08-15 at 1.24.55 PM.pngThe value of online program management (OPM) companies is much debated these days. The piece at the top of everyone’s minds is a highly critical report produced by The Century Foundation which suggests these profit-driven companies “present potential risks to quality and value in the education.”

The bottom line on the conversation is that there’s a reason the online program management industry has become a $1.5 billion for-profit industry, and it’s not because institutions are making bad decisions; it’s because third-party vendors help solve problems. And they’re not going away.

Problem solving is a core challenge in higher education. Like any industry, it’s evolving, and evolution presents new obstacles. With limited resources, the list of items in the “too hard pile” is growing, and, for many institutions, the biggest to-do on that list is making a strategic move online.

OPMs help solve that specific problem. They help universities move into the online space by minimizing upfront expenditures, driving process and decision-making, and increasing reach and enrollment through marketing.

Ironically, these past advantages of OPMs are today becoming recognized as disadvantages, especially the homogeneity of mass-produced courses. OPMs are not for everyone. Differentiated, authentic, and visionary work is driving the future of higher education. Now, more than ever, you need to create something that is uniquely you, which means you need to be in the driver’s seat and you need to avoid cookie-cutter courses.

What if you feel like an OPM is not for you? What alternatives are there that will get you online?

Not Choosing an OPM

As with any solution, there are downfalls with OPMs. Institutions can end up paying more — in lost revenue, lost intellectual property, and lost flexibility — than the value they are receiving. Further, you give up control of your programs, you end up with an undifferentiated product in a competitive market, and you lose a lot — up to 65 percent — of your revenue.

So if you don’t choose an OPM, but you still need a strategic partner, how can you move online in a differentiated way?

The short answer is easy: fee-for-service partners, such as ExtensionEngine, put you in the driver's seat, allowing you to build programs and courses based on your unique pedagogy, offerings, and organizational needs and goals. We work shoulder-to-shoulder with your faculty and administration to ensure students are at the center of development, learning outcomes come first, and the IP and revenue are yours to keep. No revenue sharing, ever.

The longer, more nuanced, answer to the question of how to move online in a differentiated way has to do with problem-solving. Go figure.

How to Find, or Create, the Money for Online Learning

OPMs are a good choice if you don’t have access to — and you won’t ever have access to — money. But if you want to move online, if you want to differentiate from your competition, and you want ownership of your own program, it’s time to start thinking about how to allocate money for this extraordinarily important effort.

Here are resources our partners — private, public and non-traditional institutions —have taken advantage of:

Option 1: Corporate Partnerships

Find a corporate partner to help launch a program or course. Corporate partnerships can fund your initiative, but also expand your reach to prospective students. After all, they are interested in hiring more, and better, graduates.

An example: the University of Notre Dame chose us, a fee-for-service partner, to build their first online master’s program. Why did they choose fee-for-service? As explained in an Inside Higher Ed article about the launch of the program, "In the fee-for-service arrangement with Cambridge, Mass.-based ExtensionEngine, Notre Dame keeps the revenue generated by the online program."

How did they come up with the money? Through a partnership with AT&T who contributed “seed money” and whose employees will make 35 percent of the first cohort.

Option 2: Gifts

When we’re talking gifts, we’re mostly talking about alumni. Alumni want their school to shine. They want the value of their degree to go up, and they want a bigger and better alumni network. Is their money best put to use constructing a new building? Or is it creating an online program that will help your institution build a differentiated reputation?

We have worked with a couple schools whose efforts were funded in just this way. We think it's going to become an increasingly common path in the near future. It just makes too much sense both for deans who want to make a mark and for donors who want to make a difference.

Option 3: Budget

Pull the money out of your budget, just like you would do for anything that is important. If you think that online learning is going to determine how successful your institution is in the next 10 years (hint: it is), don’t you want to go beyond the cookie-cutter OPM model and build something that makes you stand out from the crowd while also providing your students a superior experience?

Obviously this is easier said than done. Budget is hard to come by; it takes planning, it takes a vision, and it requires organizational problem solving skills and analysis. The outcome is worth it. You’ll end up with something that is built for your faculty and students, that sets everyone (except your competitors) up for success, and you don’t have to give up control.

If you want to build an online program that is uniquely you, find the budget to do it.

When You Need Help Solving Problems...

Let us know. There’s a reason that universities like Notre Dame, ArtCenter College of Design, Harvard, & MIT choose fee-for-service partners like ExtensionEngine to help them solve these big problems. ExtensionEngine focuses on pedagogy and the learning experience first, and then we integrate and build the technologies needed to make it happen.

Differentiated, authentic, and visionary work is driving the future of higher education. The online education space is getting crowded, so it’s time to start thinking beyond this budget cycle. Let's connect to talk about your ideas for building differentiated programs. We love the “too hard pile.”

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A Financial Model for Online Programs: Revenue Sharing vs. Fee-for-Service EngagementsLearn about the advantages and disadvantages of each engagement model, which one is best suited for your institution, and how you can receive a custom-tailored financial model for your institution incorporating over 30 parameters.

Dr. Scott Moore

Dr. Scott Moore is a former Principal Learning Strategist at Extension Engine. In this role, he led the global Custom Learning Experience practice. He worked with dozens of nonprofit, higher education, and learning business organizations as they considered using online learning to support their mission and margin, using his deep understanding of organizational dynamics, online learning, strategic differentiation, decision-making, and more. Prior to joining Extension Engine, he was a faculty member, administrator, and dean at Michigan Ross and Babson College for 20+ years. He holds an M.B.A. from Georgia Institute of Technology and a Ph.D. in Decision Sciences from the Wharton School of the University of Pennsylvania.

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