IN PRACTICE
Meeting the Measures of Success at UMassOnline
By Peter J. Stokes, Ph.D.
pstokes@eduventures.com <mailto:pstokes@eduventures.com>

Founded in 2001, UMassOnline set out to serve the educational needs of the Commonwealth of Massachusetts and beyond by offering accredited educational programs via the Internet. In 2003, the online institution chalked up 11,239 enrollees, as well as tuition and fees totaling more than $9.1 million, and a year over year growth rate of more than 49 percent. UMassOnline currently delivers a wide range of accredited offerings, including some 18 undergraduate and 14 graduate programs. Not only that, UMassOnline covers its costs.

While much ink has been spilled at the Chronicle of Higher Education and other publications eager to regale their readers with stories focusing on the demise of once high-profile e-learning efforts at name institutions, a handful of colleges and universities is quietly going about the business of making e-learning pay. Slowly, evidence is emerging that schools can effectively leverage online learning to meet their missions, reduce operating costs, generate new revenues, and evolve the concept of education.

No doubt, many schools would welcome the opportunity to emulate the success of the University of Massachusetts, especially in an era of shrinking budgets and reduced funding sources. So how is it done? Eduventures asked UMassOnline CEO Jack M. Wilson what the proper incentives for launching an online program are today. "Serving community needs, cost containment, and generating revenues: those are universal," Wilson said. "We're distinguished by which of those we think is more important." At UMassOnline, the focus is on serving the community - particularly with respect to economic development - and revenue generation. "Every institution has to develop its own priorities," Wilson added. "So my advice is, stay true to your values so that the goals for your virtual university are compatible with your traditional institution."

The key to success, Wilson argues, is business fundamentals: planning and measurement. "We're applying well known management research to our business," said Wilson. "Companies that go outside their core competencies usually experience disasters. Successful institutions are successful because they know what their core competencies are." Not only did UMass engage in extensive research and planning prior to the launch of UMassOnline, it also continues to closely monitor key measures of success. Take, for example, the online school's marketing budget. At approximately $400,000 annually, these marketing expenditures account for a little more than four percent of the institution's revenues - a fairly small percentage.

Nevertheless, Wilson has been able to adjust the levers effectively enough to ensure that these dollars are working for him. "We calculate how much we spend and what we get for it, so that mix changes from year to year," Wilson reported. "Consequently, we're getting more bang for the buck. You make measurements and find out what's working. We started out doing a lot of advertising in local papers because that's what everybody did. But if you looked at the data, you saw it was a waste."

UMassOnline was financed by a $15 million loan at 7.5 percent interest, with additional support in the form of grants for technology. Eduventures asked Wilson whether the UMass experience could be replicated by other institutions or if unique circumstances and luck prevailed in launching the online division. "I wouldn't say there was luck, though there may have been unique circumstances," Wilson commented. "But I think the answer is absolutely yes, you can replicate what we've done but you have to make sure that you have the right models in place. Some other states, when they've tried to do this, have invested the funds but did not put a sustainable business model together." Wilson sites Columbia University's Fathom as a well known example of a project that possessed great content, technology, and business relationships but which lacked key ingredients such as a business plan and product.

For all of his comfort with the rhetoric and strategies of business, Wilson remains an educator and one dedicated to education's fundamental purpose: helping students to learn. For that reason, Wilson has strong opinions about the importance of designing online programs to meet the needs of online students - not least because satisfied students are central to the success of UMassOnline. "Students in online programs are far more demanding than traditional on-campus students," Wilson told Eduventures. "They're older, they're employed, they have less patience, and they have more choices. If you fly out to the University of Nebraska, say, and you get a bad math class, you're going to head off to your English course and forget about it. If you have a bad course online, you can just go elsewhere - and the switching costs are low. It goes to delivery design. UMassOnline is doing a pretty good job of that. Still, there are things we wish we could do better."

The promises of e-learning are starting to mature, creating new opportunities for institutions to expand their boundaries and meet the needs of broader communities. UMass, one might say, has seen the future - and the future is, at least partly, online. And according to Wilson, this movement outward is "a consequence of our changing understanding of the value of the university as a driver of economic and social change." The proof is in the numbers.

For more information, visit www.umassonline.net <http://www.umassonline.net> or www.jackmwilson.com <http://www.jackmwilson.com>. At the latter site, click on the "Presentations" link for a list of Dr. Wilson's many presentations on this subject. Readers may be particularly interested in recent presentations such as "Distance Learning as a Self Sustaining Enterprise" and "Exploiting Opportunities in a Bigger Marketplace."