Shifting the OPM Conversation

Managing online and blended with more choice, control, and differentiation.

GUEST COLUMN | by Scott Moore

CREDIT ExtensionEngine.pngAs the debate over the value of online program management (OPM) companies rages on, the baseline requirements for colleges and universities seeking to expand their presence online remains the same — increased enrollment, revenue, student retention, and student satisfaction.

OPMs emerged about 10 years ago and now comprise a $1.5 billion industry. They help universities address a specific and important opportunity — move curriculum online by minimizing up-front expenditures while also managing enrollment and marketing. By providing the capital and resources to build online programs, OPMs benefit from multi-year, high revenue-share models for developing and managing these programs. The institutional benefits of reduced up-front costs while establishing and/or increasing an online presence has made this an attractive choice for higher education institutions.

An unbundled, fee-for-service model has emerged that is allowing institutions to maintain greater control over pedagogy, student experience, marketing strategy and revenue model.

Ironically, some of these strengths are increasingly being seen as disadvantages, such as the homogeneity of mass-produced courses and the shared revenue model that enables OPMs to take 50 percent or more of online tuition for the life of the program.

The first direction that institutions are turning for a solution is inward, looking for in-house resources to create online learning. It provides the most control over and insight into the process. However, this approach raises difficult-to-answer questions that institutions end up trying to ignore:

  • Does our staff have the needed expertise in project management, modern online pedagogy, applicable instructional design experience, modern user experience design expertise, and technical integration and development for both desktop and mobile? Does this staff have availability when priority demands are placed on them?
  • Do our internal processes encourage and support innovation in conjunction with on-time and under-budget delivery?
  • If we don’t have the staff, do we have the ability to attract, manage, train, up-skill, and retain good employees combined with the ability to release those who under-perform?

Many institutions who have used in-house resources end up realizing too late that their institution’s expertise only seemed to be related to what they were already doing in support of their face-to-face courses. The end result is usually a non-differentiated program that underperforms related to the institution’s financial goals, bores the students, and doesn’t allow the faculty to create courses that build on their strengths.

More recently, institutions are seeking new models that allow colleges and universities to launch and manage online and blended programs with a greater degree of choice, control and differentiation. In contrast to the traditional approaches of either outsourcing to traditional OPMs and sharing the revenue or doing everything in-house, an unbundled, fee-for-service model has emerged that is allowing institutions to maintain greater control over pedagogy, student experience, marketing strategy and revenue model.

As the market for online learning matures and institutions seek new ways to increase revenue and create engaging student experiences, authentic, visionary curriculum is driving the future of higher education. Now more than ever, institutions are seeking more flexible models that enable them to emphasize choice, flexibility, and differentiated educational experiences that complement their internal resources while building on their own distinctiveness and putting pedagogy back in the driver’s seat.

Traditional pure-play OPMs will continue to be a good choice for institutions that need to create an online presence where none exists, those that don’t have access to funding sources—either directly or through partnerships, gifts, or budget planning—and in situations where unique, differentiated curriculum is not a requirement.

The unbundled approach complements institutions that are looking for a more unique and customized learning experience, and want to do it on a fee-for-service basis so they can pick and choose program elements that best align with their program goals and the overall academic brand. In this model, colleges and universities take more control over the curriculum, student experience, marketing strategy and revenue model. Doing so ensures that pedagogy drives technology decisions rather than the other way around. And, unlike the traditional, revenue-sharing approach, institutions make the initial investment for services and then retain all of the tuition revenue.

An Eduventures’ survey of 175 online learning leaders indicated that institutions currently engaged with OPMs are expressing a more nuanced set of goals and priorities for these engagements than they have in years past. Compared to results from a similar survey conducted in 2015, institutions continue to exhibit strong interest in marketing and recruitment services, but appear to have a greater expectation that their OPM provider will improve student performance metrics through better online course experience and enhanced support.

The bottom line is that as online learning continues to evolve, a new market paradigm is emerging — one in which higher education institutions and their students will benefit from the variety of choice and opportunities that emerge.

Scott Moore, Ed.D., is Principal Learning Strategist at ExtensionEngine, where his role is to help institutions navigate the transition to online- and blended-learning. His passion is creating great learning experiences that both work for students and make sense for the institutions providing them. Scott was a tenured faculty member at the University of Michigan for 20-plus years and led the undergraduate business programs at both the Ross School of Business at Michigan and Babson College.

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