No easy money in distance learning

August 11, 2000

Big-budget developments in online learning by universities may not bring immediate and lucrative rewards, according to research in Canada.

Silvia Bartolic-Zlomislic and Tony Bates of the University of British Columbia suggest that there are potential benefits in developing online learning, including access to new markets, international partnerships and reduced time to market.

But they warn in Investing in Online Learning: Potential Benefits and Limitations that the economics of online courses are complex, fascinating and not transparent. The authors use research material from three in-depth studies and a cost-benefit research project at UBC, funded federally by the Canadian TeleLearning Network of Centres of Excellence.

They say: "Under the right conditions, online learning cannot only be cost-effective, but can actually bring in net profits for an educational institution. However, there is no easy money in this business. It has to be earned. This requires quite a different approach to the development and management of teaching. It requires financial systems and financial management that, frankly, few higher education institutions have in place or are even ready to contemplate."

The authors emphasise that any successful online development must have upfront investment, sound business plans and project management, financial and technical support, and a team approach to course development and delivery. The authors warn that students need to be psychologically ready and financially able to embrace new methods of course delivery.

"Whether or not online learning can be considered successful and worth the investment will largely depend on the values and goals of the organisationI if the focus is on revenue generation or saving money, online learning may not be a good choice, as a large number of online programmes are not and cannot be cost recoverable.

"They may, though, be more cost-effective in terms of learning outcomes for the same dollar spent."

Of the three cases examined, only the UBC case was fully cost-recoverable, and by only a small margin. But if the organisation values collaborative learning, increased access for lifelong learners, and the internationalisation of the curriculum, online solutions may be of value, even if the costs are similar to those of conventional courses.

Institutions should also be aware that students with poor study habits will find an online course particularly challenging.

The report is online at: bates.cstudies.ubc.ca/investing.html

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