This is the third and final article in our series titled “The Adoption of Innovation: Online Learning Business Plans, Strategies, Change Management and Leadership,” in which we have reported on the business side of distance education.

University of Massachusetts Lowell’s Division of Continuing Studies & Corporate Education

We begin with another example of a Self-Funded Independent Unit, the University of Massachusetts Lowell’s Division of Continuing Studies & Corporate Education (CSCE).Like most continuing education units, CSCE is mandated by the state to be self-supporting. “We have to account for, in an audit sense, all of our expenses, including overhead and reimbursement to the campus,” says CSCE Dean Jacqueline Moloney. CSCE’s business model was first set up nine years ago (and fine tuned and developed over time) when it first started to offer online courses. In its basic form, the business model - like in the corporate world - includes plans related to the cost to invest in the development, launch and sustainability of online programs, with gross revenue and return-on-investment estimates included.

“Because we have to invest in the infrastructure on campus as well as the development cost of online courses, we go through a pretty rigorous process,” Moloney says. “We meet with the departments and deans, and we come up with a business plan for each program that I submit to the Chancellor as part of my annual budget and strategic plan.”

In 1997, Moloney wrote CSCE’s first official business plan for an online bachelor’s degree in information technology. Since then, CSCE has grown to offering four fully online undergraduate degrees, five fully online graduate degrees, and 14 fully online undergraduate and graduate certificate programs.

A Successful Example

For a successful example of a business planning and program development process, Moloney points to an online master’s degree program in Education Administration that was launched by CSCE in 2002. “They (the on-campus master’s in Education Administration program) had failing enrollments, and I had been talking to them about moving the program online,” Moloney explains. “Our team here of marketing people, course development people, and curriculum experts met with graduate school of education faculty and the dean. We had planning sessions with up to 25 people participating in these sessions. We reviewed everything from program development to the targeted audience. We developed a five-year budget, projecting costs, growth revenues and tuition.”

In calculating gross revenue, the formula was based on the program starting with 75 to 100 students at a growth rate of 25 percent for five years. The tuition was calculated at $1,000 per year, and the direct costs of instruction, marketing, and course development was calculated at $10,000 per course, plus an overhead charge for continuing education to provide all the student services.

This year all continuing-education-managed student services were transferred over to the institutional level. “We developed this cutting edge response system for students; they took our staff and our automated services and collapsed them into the day school,” says Moloney.

“We also factored in the department’s cost for engaging in this activity, depending on the department’s needs, (i.e., they might need a teaching assistant to field inquiries from prospective students).”

Ultimately the online curriculum for the master’s in Education Administration was modeled after the university’s on-campus degree program, which is designed around the frameworks required for earning Massachusetts state certification for principals, assistant principals, supervisors, and/or directors. Initially there were some tentative feelings about whether or not the program would succeed online because there’s a significant number of competing schools and colleges of education in Massachusetts offering master’s degrees. However, “from the beginning we have not only sold almost every class we have offered, but in many cases we have had to add extra sections,” says Moloney.

Part of the reason for this success could be that tuition and fees are affordable, based on in-state tuition rates. Plus, student enrollment is capped at 22 per class to encourage maximum student-instructor interaction.
 
During the program’s first year of operation, approximately 300 students, about 75 percent of whom were already enrolled in the on-campus program, took online courses. The remaining 25 percent (about 75 students) were new enrollments.

“We have had very high levels of satisfaction and high return rates,” says Moloney. “We have students who are enrolled in this program who are ten miles away and never came to school here” because they could not fit face-to-face classes inside their already busy schedules. In addition to increasing enrollments, the Graduate School of Education (GSOE) has seen an increase in the number of graduates from this program, from a low of 7-10 per year to a graduating class of 26 last year.

Overall, the GSOE benefited by receiving funding from net revenues that they used for teaching assistants, clerical support and adjuncts. As a result of the success in this program, the GSOE has also launched three new graduate online degrees in high demand areas.

Building Administrative Collaboration

Another innovative feature of this program has been the faculty’s deep involvement in planning and development. The deans of GSOE and CSCE, the faculty, and a team of course developers, program developers and marketing specialists from CSCE, meet regularly to discuss progress towards benchmarks that are based on the Sloan Consortium’s “Five Pillars of Quality Online Education.” This process created a feedback loop on the quality of all aspects of the program that resulted in outstanding evaluations by faculty and students and provided an excellent model for building collaboration between academic programs and continuing education.

Online education has enabled this program to make leadership opportunities more accessible to larger numbers of highly qualified people by nurturing, challenging and inspiring these candidates all within the online environment to fill some of the most demanding roles in our society.

About ROI

With regard to return on investment formulas, Moloney says that the rule of thumb is to at least reach a break-even point by the end of any new program’s third year.

Part of that formula includes a 10 percent assessment out of its gross revenues that CSCE pays to UMass Online, the University of Massachusetts system’s (Amherst, Boston, Dartmouth and Lowell) portal to online education.
 
Depending on the program, along with such factors as how the program fits in with UMass Lowell’s brand and mission, 15 percent above the break-even point after the third year is the preferable ROI formula used, and “this is consistent with the goals that the Chancellor has set for continuing education, “ adds Moloney. The master’s in Education Administration program reached its break-even point by the end of its second year of offerings.
 
As a side note, UMass Lowell recently received three awards from Sloan-C: “Excellence in Institution-Wide Online Teaching and Learning Programming,” “Excellence in Faculty Development for Online Teaching,” and “Excellence in Online Teaching.”

University of Massachusetts Lowell’s Division of Continuing Studies & Corporate Education
http://continuinged.uml.edu

University of Central Florida (UCF)

UCF, an institution we have written about extensively in past issues of Educational Pathways, is always an interesting case study in the way fully online and blended courses and programs are managed. As a large and growing institution in a high population growth region, UCF has strong institutional mandates and support to grow its uses of educational technologies for blended and fully online courses and programs in order to help save on valuable physical space.

UCF has three primary units that are relative to distance education: the Center for Distributed Learning, Course Development and Web Services, and the Research Institute for Teaching Effectiveness. These three units, combined, fit into the category of an Overhead-Funded Service Unit. For the purpose of easy nomenclature we will refer to these combined units as Online@UCF.

Overall, Online@UCF is a core activity of UCF, says Joel Hartman vice president and CIO, Information Technologies and Resources. “Everything has been centralized and integrated in terms of support.”

A Planning Process as Opposed to a Business Model

“We are a flat-funded unit with our regular institutional funds,” adds Steven Sorg, director of UCF’s Center for Distributed Learning. “The Center coordinates program planning; internal and external relationships with colleges, departments and programs; accreditation; and policies as they relate to the academic side of this endeavor. To that end we schedule and hold planning meetings with each of our college deans, the director of our regional campus, and many others who are appropriate. All of these people have desires and needs that are, in part, fulfilled by having online courses, online programs, or blended courses (reduced seat time).”

Overall, Online@UCF does not operate under any business models, per se. “It is more of a planning process,” says Sorg. “They (colleges or departments) contact me or get referred to me and I initiate the process of clarifying what it is they want to do, for whom, what’s the time frame, what are the courses involved, who are the faculty - and then we try to get them into the queue (for training and course development) so that their goals, plans and timelines are met by our support services.”

Planning includes establishing a timeline for online support, coordinating with the program itself and the department chair which faculty members are going to need online course development support and training, and when the program is estimated to go online so that students can enroll. An optional promotional service that includes the production of brochures is also provided by Online@UCF to help the departments recruit students.

A financial incentive of $2,000, or a one-course release from their typical teaching assignment, is provided to individual faculty members to conduct their course development work. They are also given a new notebook computer if they are a full-time faculty member. If adjuncts are needed, they are provided with the stipend alone.

Administrative Meetings Help to Manage Growth

Other regularly scheduled meetings drive the development of online and blended learning environments at UCF on a continuous basis. One is a monthly meeting of a Distributed Learning Advisory Group that consists of the lead Online@UCF staff, the Vice Provost of the UCF regional campus system, the Dean of Graduate Studies and the Dean of Undergraduate Studies. Additional staff from across campus, such as the Continuing Education Department, are invited each month. Recent discussions, for instance, have revolved around providing more general education courses online to reduce bottlenecks in various courses.

Another is a weekly meeting of an Enrollment Management and Planning Group, which is a broader group consisting of the aforementioned educators as well as staff from the Admissions Office, the Registrar’s Office, Institutional Research and Planning, and other offices and departments across campus. “We talk about how to manage the growth we have at this university, including online learning as one of the key strategies for managing and planning growth,” says Sorg. “We think we have turned the corner here. While it (online learning) has always been in the back of people’s minds, it is now right up front.”

Collecting Data

In addition, Hartman stresses how Online@UCF has, since its inception, consistently collected data and generated reports based on that data in order to address important issues, questions and concerns related to any online learning initiatives. He says that the road toward success requires “collecting an enormous amount of information about activities and using that information to both inform others and for continuous improvement. We have made a significant number of changes and adjustments along the way based on a variety of feedback that has helped the effort adapt and fit the institutional needs.”

What About Return On Investment?

The colleges receive support for their online courses in exactly the same manner as they do for face-to-face courses. Because the overall institutional budget is tied to enrollment growth, there is great interest in accommodating student demand. Online@UCF has become a strategic resource for accommodating institutional growth.

Online@UCF engages more than 75 percent of the faculty and tens of thousands of students both on an off campus. Online@UCF offers six online undergraduate degree completion programs, nine online graduate degree programs and ten online graduate certificates, Additionally, 240 online courses and 142 blended courses from all academic areas were offered this past Fall semester.

Annual revenues from fully online students, inclusive of matriculation fees and state support, totaled more than $23.5 million for academic year 2004-2005. As a return on the university’s investment in online learning support resources, this represents and ROI of approximately ten-to-one. In addition, the cost of brick and mortar construction that has been avoided due to fully online and blended learning courses exceeds $4.5 million.

Online@UCF
http://online.ucf.edu

Information Technologies and Resources
http://www.itr.ucf.edu/

Center for Distributed Learning
http://online.ucf.edu/cdl/

Course Development and Web Services
http://www.cdws.ucf.edu/

Research Initiative for Teaching Effectiveness
http://pegasus.cc.ucf.edu/~rite/

University of Georgia

The University of Georgia Center for Continuing Education is responsible for two distance education units in the University System of Georgia: Independent and Distance Learning (IDL) and eCore. Both have unique business models that cannot be categorized so easily but are primarily self-funded.

Independent and Distance Learning

IDL has its roots in a long history of correspondence courses offered by the University System of Georgia institutions dating back to pre World War II. In the late 1940s these were centralized in the Center for Continuing Education on the Athens campus. Today IDL offers about 140 credit-bearing “self-paced” courses, with about 60 of these courses being offered in an online format, and the remainder being offered in a print-based format.

The University System of Georgia offers students higher education options at 34 colleges and universities throughout the state, providing a wide range of academic programming, including certificates, associate, baccalaureate, master’s, doctoral and professional degrees.

IDL students do not have to be admitted to the University System of Georgia to enroll, though many current University System of Georgia students supplement their on-campus classes with IDL courses. Students can register at any time for IDL courses. Tuition for IDL courses is $152.00 per semester hour, with the exception of those University of Georgia students who are classified as nonresident (out-of-state) students. Out-of-state students who wish to receive resident credit for IDL courses must pay $661.00 per semester hour.

In each course, there are lesson assignments corresponding to assigned readings in required texts or materials. These assignments are submitted consecutively via snail mail or online to IDL, where they are logged before being forwarded to an instructor. If any students needs to contact the instructor, a note can be included with a snail-mailed lesson assingment, or they may contact the instructor via e-mail or phone.

The maximum time allowed to complete an IDL course is nine months, though students are strongly encouraged to finish these courses in less time. Students must be enrolled in the course at least eight weeks, and all required lessons must be submitted and completed before taking a final exam.

IDL Business Model

“We have perhaps an unusual program financially in that we retain all of the tuition revenue from students who take these (IDL) courses, and that revenue stays here and more than offsets the cost of payroll and operations,” says Brad Cahoon, director for the Division of Distance Education. “The program generates a surplus that is used to fund additional course development and for other programs here in continuing ed.”

Planning of any new courses is the responsibility of IDL. “It is a collective decision based on our perceptions of what our market will support, and sometimes faculty here at the university or from other institutions will approach us with a special interest for creating a course. Some of those projects get off the ground, and some don’t.” Cahoon explains that this decision-making process is more of a “rule of thumb” approach, but “we need to quantify this a little bit more rigorously, and we have, in terms of assessing the financial performance of courses. We have a lot of data about the enrollment of each course and what it is contributing financially.”

Faculty interested in developing a course submit one lesson and an overview of the course. If approved, they will earn $1,800 for developing a complete course. A team of web designers from the University of Georgia Center for Continuing Education Department of Web Instructional Development builds out all of the IDL courses in a standardized format, although there is variability in the way faculty write and present their content. Faculty are the final authorities on what content ultimately goes inside their courses. Faculty are paid another $1,500 per course for a full revision when necessary.
 
The responsibility of learning effectiveness and quality control of IDL courses, which are basically replicas of University System of Georgia face-to-face courses, are shared with the academic units, says Cahoon. “Our goal is to make sure that learning outcomes are equivalent to face-to-face classes.”

IDL hires faculty based on academic department recommendations and approval. However, if an IDL faculty member is not up to speed and his or her evaluations continue to slide, “we relieve them of their responsibility,” Cahoon says. “That is the ultimate control that we have.”

IDL is also responsible for student services through its student services unit, which consists of three representatives who help to register and advise students. However, 70 to 80 percent of IDL students are University of Georgia students who take one or two courses and receive the full benefits of student services at their home campus.

eCore

eCore, which is short for electronic core curriculu, allows University System of Georgia students the opportunity to complete their first two years (the “core” curriculum) of their collegiate careers in an online environment. eCore consists of online freshman- and sophomore-level courses designed, developed, taught, and supported by faculty and staff from the University System of Georgia. Students register for eCore courses through one of six affiliate institutions that offer the courses. The registering institution becomes the student’s home institution.
 
The first eCore courses were offered in 2000. “The main difference between these courses and IDL courses is that these are cohort courses running on a regular semester schedule,” says Cahoon. “The instructional design is more sophisticated because it allows for the fact that students can be involved in group discussions and other forms of group activities.”
 
A unit called Advanced Learning Technologies, that is directly supported by the State Board of Regents, put together teams of faculty from different institutions within the system to develop a common curriculum of eCore courses. With the help of the University of Georgia Center for Continuing Education Department of Web Instructional Development a standard set of 25 eCore courses were developed.

Instructors for eCore courses are recruited and hired by eCore from all the 34 institutions in the University System of Georgia. “Our biggest challenge right now is the recruitment of enough faculty for the number of sections we want to offer,” says Cahoon.

Student services, including advisement, are handled by each of the six affiliate institutions. “One thing we are going to do is pull all the eCore advisors here for a two-day meeting to go through every single service that should be provided to students and find out what is happening on all these campuses,” says Nancy Thompson, director of IDL.“ We know that some campuses are doing a better job than others.”

eCore Business Model

“We are absorbing all the cost of the eCore program, because we compensate faculty, and we create the courses. We also do the technical administration of the course in terms of setting up the course sections, offered in WebCT Vista,” says Cahoon.

eCore pays $1,200 per-credit-hour to the faculty member’s institution as teacher pay. The institution then pays its faculty whatever they would normally be paid for teaching off-load or on-load. “Some institutions do have it as part of the regular teaching load, and, for $3,600, they are able to hire two part-time faculty members to teach two three-credit classes (at $1,800 each),” says Thompson, adding that she does not keep track of how much each faculty member is paid by their home institution.

eCore receives revenue by retaining the tuition dollars from students who remain in eCore courses past the mid-point of each semester. The tuition is gathered at the home institution, and 80 percent of this revenue is sent to eCore. “We will invoice the institutions (after mid point of each semester), and they send us that money,” says Cahoon.

Regarding the decision-making process for adding eCore courses, Thompson says that initially “it was all done through a general ed committee that got together and decided which courses would be developed. The committee was comprised of Vice Presidents for Academic Affairs and faculty members from the 34 University System of Georgia institutions. We have talked about adding a couple more courses that students and advisors have said they needed, so we would probably work with that same group in developing the new courses, if we decide to do that.”
 
“We have much less flexibility than we do with IDL in terms of making a decision about what courses we can add to eCore,” adds Cahoon. “We have had many requests for particular courses, and we have passed those requests up the chain. We would like to develop a few more courses, but it is a very slow process for us to receive approval.”

Current Enrollments and Growth Prospects

eCore is starting to grow quickly. Last fall it had 1,300 enrollments, and this fall it has 1,700 enrollments. “It is growing fast in terms of demand,” says Cahoon. We just have to bring in new people.”

“We will probably need to hire a few full-time eCore faculty members,” adds Thompson. “eCore was really designed to be just the core curriculum of the System, so that any institution could build a complete degree online, and students anywhere in the System could take their core curriculum courses through eCore and then go to one of the other institutions to complete their last two years.”
“I think all of us in this area are kind of making it up as we go along,” Cahoon concludes.

University System of Georgia Independent and Distance Learning
http://www.georgiacenter.uga.edu/idl/

eCore: Georgia’s College Core Curriculum Online
http://www.georgiacenter.uga.edu/ecore/