The growing demand for online learning isn’t new, but it’s here to stay. From 2012 to 2019, pre-pandemic, the percentage of students enrolled in at least one distance education course increased from 25.5 to 36.3 percent. And the number enrolled exclusively in such courses increased by almost a third, from 2.6 million to 3.4 million students. With new enrollment and student and faculty survey data emerging every day, the more recent and significant growth in demand may have more sticking power than many anticipated, especially as systems and individual institutions aim to diversify revenue streams, distinguish themselves from market competition and pursue curricular innovation to align with evolving student needs and preferences.
Although distance education has long been perceived by some as inferior in quality, more than half of American adults surveyed in 2022 believe that the quality of online instruction in higher education is the same as—or better than—in-person instruction, up from 37 percent the year before. One survey found that seven out of 10 students planned to take at least some courses in a fully online format post-pandemic. The global market for online degrees and microcredentials is expected to grow to a $117 billion market by 2025.
Parallel to this growth in demand is the notion that the market will continue to be dominated by a small number of national players. The top 10 online-only institutions enroll 20 percent of the online-only students in the U.S., spending millions of dollars each year on marketing. This imbalance has left many state systems and individual institutions wondering how they can carve out their piece of the pie and how big a piece they should try to cut.
Several public institutions and systems have recently acquired online providers—examples include UMass Global, the University of Arizona Global Campus and the University of Arkansas Grantham—to scale quickly and appeal to broader audiences. While certainly an option, the number of viable acquisition targets is finite, and given the expanded scrutiny and cultural implications that often accompany an acquisition approach, growth by acquisition will only work for some.
A review of recent market successes indicates an approach to online education that leverages finite institutional resources, enhances strategic goals related to access and student success, supports the goals of partner organizations, and ensures a high-quality academic product may be valuable.
In observing efforts by institutional leaders to design market-relevant approaches to online education in their unique contexts, it is apparent that each successful effort has addressed and attempted to answer strategic questions aligned to three sequential pillars:
Develop a Statement of Purpose Collaboratively
- Do we view online education as a strategy for program expansion and new enrollment growth, or for more flexible options for current on-campus students, or both?
- How significant of a new or expanded revenue stream do we see online education representing in the future?
- How important is it to ensure that online pedagogy and instruction are of equal or greater quality compared to in-person instruction? Are we delivering on that aspiration today?
- How can we ensure the appropriate balance between investing resources to ensure high-quality student outcomes and growing enrollments in new programs?
Examine Current Market Position
- What are the needs of existing and potential employer partners in nearby economic hubs, workforce initiatives in the region or other external partners? Could we support these needs through online education?
- What is our current footprint of online offerings, and what are the characteristics of students drawn to those programs?
- Do any of our academic disciplines have brand recognition beyond a local or regional market?
- What other options exist for prospective online students in the region? Are there particular gaps in the market that align with our academic areas of strength?
Evaluate Organizational Strengths and Gaps
- Is our current online education support organization distributed, unified centrally within a particular division or generally underrepresented? Does the current organization fit our purpose statement?
- What are the capabilities and potential gaps of the current online education support organization to support high-quality online instruction by promoting and providing best practices in instructional design, program growth and innovation, marketing and recruitment, and program or course evaluation?
- In limited-capability areas, what is the institution’s capacity and appetite to explore third-party partnerships to accelerate growth (e.g., online program management vendors for marketing, recruitment and instructional design support or research firms for market intelligence)?
- How do faculty members view the current online education support organization, particularly the resources available to ensure high-quality instructional design and delivery?
Upon answering these questions, some institutions or systems may decide to leverage their national brand and invest in pursuing significant near-term online scale via inorganic growth, as in a merger or acquisition. Others may realize that their optimal position is to focus on providing current students with more flexible course options and to pursue the targeted growth of online programs aligned to the regional labor market and student demands, and may as a result pursue an internal and unified integration of support resources and faculty development units. Other solutions may also present themselves during this discovery process.
Examining these questions (and likely others) will assist your institution in developing an online education strategy that is the right fit for your unique context and market position. It will also allow you to capitalize on the recent and projected future growth in student demand for high-quality online offerings and achieve parallel outcomes related to revenue diversification, alignment with market trends and curricular innovation.
Ben Chrischilles is a director in the higher education industry business at Huron Consulting Group, where he partners with institutions to devise and implement enrollment and academic portfolio strategies focused on growth and innovation, enhanced market relevance of offerings, and mission alignment.
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