1 the costs of e-learning presentation and workshop professor paul bacsich dipoli, 23 march 2004,...
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The Costs of e-Learning
Presentation and Workshop
Professor Paul Bacsich
Dipoli, 23 March 2004, Finland
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Problems of different cost perceptions There is slowly increasing agreement on the
methodologies of costing e-learning So why is there a dilemma where Education see
“No Significant Difference” whereas Training sees “Return on Investment”?
The challenge is to find a uniform evaluation/planning methodology, including costs, which copes with a “world without borders”
Borders are not only geographic
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Hidden Costs – the bane of financial planning
Increased telephone call and printing bills for students due to Internet usage
Entertainment expenses “necessarily” incurred by staff at conferences but not reimbursed
Administrator time answering student queries Support costs of a new Learning Environment Costs of content - “created in one’s spare time” Costs of institutional collaboration Costs of conformance to standards
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Contents
Activity-Based Costing (CNL2) Hidden Costs and Stakeholders
(CNL1) Planning (after HEFCE) Actual costs Workshop
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Activity-based Costing: CNL2
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CNL2 = ABC
Done at Sheffield Hallam University (UK)
Funded by JISC
JISC recommendation that Activity-Based Costing be trialled in a university
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Activity-based costing (ABC)
ABC was developed as an alternative costing methodology by Robin Cooper and
Robert Kaplan of the Harvard Business School (1988) in their research into product
costing in the manufacturing industry.
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Cooper and Kaplan (1988)
They argued that traditional costing distorted product costs (“peanut butter spread approach”)
There is a cost to all activities carried out within an organisation
Activity costs should be distributed to products in relation to their use
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Activity Drivers
Hold Tutorials
No. Students
Business Intelligence
Resources
Cost for each Customer/product/channel group
method Activities
Staff time
Cost driver
I.T. & Management
I.T. & Management
FT
FT
DL
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Advantages of ABC Gives more than just financial information
Fairer system of overhead allocation
Accountability of central services
Highlights cross-subsidisation
Recognises the changing cost behaviour of different activities as they grow and mature
Can provide data for other initiatives, e.g. Balanced Scorecard, EFQM
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Disadvantages of ABC
Data collection can be costly and time consuming
Initially it can be difficult to collect the data you want
Determining appropriate and acceptable cost drivers
More complex system and relies on impeccable accounting system
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Implementing ABC takes time
“Its important in a service organisation to get started with ABM and not worry about total accuracy from the start. Accuracy will improve with time”
Antos (1992)
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How a university differs from manufacturing
Manufacturing
In manufacturing industry the central finance department require and analyse the costs of production and the make-up of the the organisations’ product portfolio. Its pricing policy is directly influenced by this information.
University
Very rare to find a finance director examining costs on a course-by-course basis. Product information is held in the School and product decisions are not based primarily on cost.
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CNL2 Project Outcomes
External: Report and Handbook available on Web at
www.shu.ac.uk/cnl/
Internal: SHU amended their cost codes and adopted a
minimal form of ABM Central Finance Department “very keen” to
adopt ABC across the University
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Hidden costs and stakeholders: CNL1
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Introduction to CNL1
Done at Sheffield Hallam University Funded by JISC Aim - to produce a planning document and
financial schema that together accurately record the Hidden Costs of Networked Learning
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Examples of Hidden Costs
Increased telephone call bills for students due to Internet usage to access lecture notes, course conferencing and assignments
Entertainment expenses incurred by academic staff at conferences but not reimbursed by the Institution
The usage of research funding to bolster teaching resources - or visa versa
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Study Methodology
detailed literature review of over
100 sources
sectoral survey of UK HEIs
seven case studies based on interviews with key staff
survey of students at Sheffield
Hallam University
consultation with other projectsand experts world-wide
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Barriers to costing
Reluctance to consider timesheets Reluctance to acknowledge overtime Inconsistency and non-granularity of internal
accounting Worries about any move to ABC Inhibition of innovation once the costs are
known “Cost of Costing” “Cost of having done the Costing”
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Lifecycle model Cost items recorded from literature Current distance education costing models
analysed Bates (UBC, Canada) Rumble (UKOU) Moonen (Twente)
Also looked at US (Flashlight, TCM) and training sector
Consultation with academic staff Conclusion: Traditional financial accounting
inappropriate for exposing hidden costs
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Course Lifecycle Model
Planning and Development
Production and Delivery
Maintenance and Evaluation
Three-phase model of course development
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Details in three-phase model
Planning andDevelopment
collecting materials coming up with - or being told -
the idea writing user guides or course
publicity
Production andDelivery
curriculum delivery duplication of materials tutorial guidance
Evaluation andMaintenance
quality assurance exercises replacement and updating of
materials evaluation against course aims
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Financial Schema
Stakeholder dimensionExpendituredimension Institution Student Staff
Total
Staff costs
Depreciation
Expenses
Overhead
Total
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HEFCE’s planning model
Sensing a gap in the market, now that many Arts graduates (e.g. at the BBC) have PCs and are on the Internet, Dr Carter at the University of Rother Bridge has got approval to mount a totally
online course on Post-Deconstructionism as part of her new distance learning MA on “Radical
Philosophies”.
Phase Types of task
Planning & Development
Read the latest works on the topic, listen to a new radio series, create lecture notes, set essay topics. Adapt her own research articles on “deconstructing gender - where next?” to be suitable to final year students. Put all this on the course Web site.
Ask the Computing Service to set up a Bulletin Board System. (They want to charge for doing this. She refuses, citing the departmental overhead.)
Production & Delivery
Make more material available on Web, such as topical items on Philosophy, moderate discussion groups online, receive and mark essays sent in by email. Set up “real” office hours for those students who live nearby.
Maintenance & Evaluation
Students want some “synchronous” online events; so must get technician to find out about RealAudio and record some lectures for next year. Also worried about the new OU global course in this area; how can she differentiate her course? (What about her students at the BBC?) Can she write something about this in a journal and count it for the next RAE?
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Conclusions from CNL1
In order to accurately record the Costs of Networked Learning
you must have a universally accepted method of what costs to record, and how,
in place from the start; which takes into account all stakeholders
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But what are the real costs?
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Focus on study hours (not teaching hours)
UK: 10 hours = 1 CATS point 180 CATS = 1 MSc
120 taught, 60 dissertation 360 CATS = 1 degree Bologna Badly flawed concept but best we have
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What does e-learning content cost?
Commercial figures: average $12000 per study hour, but very large standard deviation
10% of this for simple material could one aim for < $1000 per study hour?
This is still around $8000 per CATS point.
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Actual figures!!! (US)
“Course conversion costs are about $25000 and up for a two-hour [per week] course, depending on the kind of interaction needed.” Schooley (2001)
“...we can say with some level of certainty that it can take on average about 18 hours - of faculty time [$1200 at $70/hour] - to create an hour of instruction that is on the web”. Boettcher,1999
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Media Hours of academic effort per teaching hour (taken from Boettcher, 1999)
Lecturing 2 -10 Small group teaching 1-10 Videotaped lectures 3-10 Web development 5 - 23 Teaching Text (book) 50 -100* Broadcast television 100* Computer-aided Learning 200* Interactive video 300*
* require support staff as well
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Learning hours: Rule of thirds
1: Study of “engaging” multimedia: expensive
2: Study of existing or slightly modified (learning) resources: mid-price
3: Working on activities and assignments (maybe in collaboration): cheap
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How to reduce the price Forget research Go for templates Economies of scale: long runs of similar
material Professionalism Outsource to specialists (outside HE/FE) UK view: Outsource development - and
support - to cheaper countries close to UK culture (provincial Canada, Australia, New Zealand)
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Details about the CNL projects can still be found at http://www.shu.ac.uk/cnl/
Thank you for listening; now it is your turn
Paul Bacsich