This presentation was used as a discussion catalyst at a Boston College seminar. Portions of this presentation were modified by John Gallaugher from original by Blake Ives. Notes on some slides were also added by Gallaugher. To view notes, select ‘Notes Pages’ from ‘View’ menu. Any errors are entirely attributable to Gallaugher. Original notice for Blake’s outstanding work follows...

Power point presentation describing the technology driven threats to business education marketplace. Includes auto timings. Can be used or modified by others, with acknowledgement to Blake Ives and Center for Virtual Organization and Commerce.

Original Presentation Available at:http://isds.bus.lsu.edu/cvoc/projects/virtualeducation/html/

Internet-Based Education:Opportunity, Threat, Fad

John Gallaugher

Jim Gips

Pete Wilson

A discussion catalyst for the Boston College Excellence in Teaching Seminar Series

Related Materials at: http://www2.bc.edu/~gallaugh/neted.html

Portions of this presentation were liberally adopted from an earlier work by Blake Ives of LSU. See the great work he & others are doing at CVOC (the Center for Virtual

Organizations & Commerce) at:

http://isds.bus.lsu.edu/cvoc/projects/virtualeducation/html/ [ESC to exit]

The Internet is Rewiring Societyand Redesigning Industry

How will it disrupt the B-School Markets?

Anonymous entrepreneur as quoted by

Arthur Levin in the NY Times

“You know, you're in an industry which is worth hundreds of billions of dollars and you have a reputation for low productivity, high cost, bad management, and no use of technology. You're going to be the next health care: a poorly managed nonprofit industry which was overtaken by the profit-making sector.”

Market Snapshot

• Adult Education is a $225-300 billion a year business– By 2002, Exec. Ed. will be a $7.1-billion industry

• Web-based learning will surpass 5 million users by 2002

Users of Web-Based Training

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,000

1999 2000 2002

Peter Drucker

“Universities won't survive. The future is outside the traditional campus, outside the traditional classroom. Distance learning is coming on fast.”

“We strongly believe in the superiority of facilities-based schools”

Andy Rosenfield – UNext.com

Carole S. Fungaroli, Adjunct Prof. of English, Georgetown

“I think it [online education] is going to be the joke of the 21st century. I don't see anything that these people are offering that you can't get better on campus”

The Question is

Is Virtual Education Better than Traditional Teaching?

Not:

The Questions Are:

Is Virtual Education Improving Faster and at What Rate?

Will it be Good Enough for Our Customers?

QualityOf

Education

Yesterday Today Tomorrow

As we currently provide

As our current students expect (we hope)

Managing Sustaining Technologies

“Breakthroughs” in Technology for Classroom Education

• Dustless Chalk • Text Book• White Board• Overhead Projector• Telescoping Pointer• Light Dimmer• Laser Pointer• PowerPoint ???

Breakthroughs in Technology for Non-Traditional Education

• Ubiquitous Web Access and Use

• Bandwidth

• Display Quality

• Multimedia

• Collaboration Technologies

• Economies of Scale

Yesterday Today Tomorrow

As we currently provide

As our current students expect (we hope)

As provided non traditionally

As expected by non-traditional students

?

Managing Disruptive Technologies

When

QualityOf

Education

The Question is

Is virtual education better for our students?

Not:

The Questions Are:

•For whom is it better?

•Who is serving them well?

Centers of Innovation

• More than one-third of US Universities already offer some sort of accredited degree online. – By 2002 estimates are 4 out of 5 will.

• Peterson's 1997 Distance Learning guide listed 762 CyberSchools

• The players, models, and offerings are diverse– Traditional Players– Alliances– New Rivals

A ubiquitous inexpensive distribution channel permits taking an existing

brand into new markets.

Geographically Fragmented IndustryBut for How Much Longer

Brand Extension

"We are a reasonably small university stuck in a very expensive real estate site in the middle of London with few or no possibilities of expansion."

Dean of the London School of Economics

Substitute London for Boston

Traditional Players

Premium Prices forPremium Brands

Early Action Students Take Online Classes for Credit Before Setting Foot on Campus

AACSB ApprovedOnline MBA

Alliances & Innovators

Founder of Reel.comPartners with Real Universities

Using our facilitiesfor Dual Degree Net Offering

Graduate Telecom CoursesTargeted at 30,000 IEEE MembersGraduate Telecom CoursesTargeted at 30,000 IEEE Members

Morningside Ventures

For Profit Divisions

Creating a CyberUniversity

Development, Distribution, and Sales Partnerships

with Leading HigherEd Brands

Partners in creating an Executive MBA for Corporate Teams

Boston, MA

Strange Bedfellows

Announces an Online Journal on Virtual

Education

With a Provider of Online Education

New Rivals

GeeksContent Changing too Fast for Traditional Education

Book Publishers

Harvard Law Professors Rebuked forTaping 10 Hr. Lecture for Kaplan’s Concord U.

“We always thought our new competition was going to be 'Microsoft University'. We were wrong. Our competition is our own faculty.”

President of an ‘elite Eastern University, quoted in the NY Times“E-Commerce Comes to the Quad” Feb, 13, 2000

The First Accredited Virtual

UniversityThe AAUP Goes Crazy

Over 8,000 online students paying $1,460/course

Some May Fail...

Struggling Efforts?

The Internet has Changed the

Players

The Internet has Disrupted

the Rules

Products Under Siege?

Boston CollegeProgram

US NewsRank

Part-Time MBA 19Full-Time MBA 40Undergrad. Business Programs 32Among National Universities 39vu

lner

abil

ity

Highest?Highest?

So What Do We Do?

• Run down the same path– undercapitalized– competing on ‘church’ time

• Do we have underutilized (latent) sources of competitive advantage?– CEO lecture series– voraciously loyal alumni

• Shall we experiment? If so, how?

Cultivate, Encourage, &Provide Resources forLife-Long Learning

Align IT: Link IT to B-School Strategic Plan

or

IT Impact: Establish an IT-Enabled Mission

IMPACT: New Markets

• Managing a Disruptive Technology

• Target Non-Traditional Customers

• Establish Arms-Length Innovation Center

• Focus on Distinctive Competencies

• Seek out Distribution Partner(s)

• Partner with Faculty

• Look for Economies of Scale / Versioning

ALIGN: Traditional Students

• Provide ubiquitous access

• Strive for best practice in online support

• Acquire library of knowledge tools

• Motivate their use

• Integrate technology in functional areas

• Use IT-related cases & examples heavily

• Use WWW for Marketing, Alumni, Student portfolios - give stuff away.

Let the Conversations Begin!

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