July 20, 2018

One business case for OER examined

A video on electricity from the OpenLearn platform

Law, P. and Perryman, L.-A. (2017) How OpenLearn supports a business model for OER Distance Education, Vol. 38, No. 1

The journal: ‘Distance Education’

Distance Education is one of the oldest and most established journals in the field. It is the journal of the Open and Distance Learning Association of Australia (ODLAA) and over the years it has published some of the best research in distance education. However, it is not an open access journal, so I am providing my own personal review of one of the articles in this, generally excellent, edition. I should point out though that I am a member of the editorial board so do have an interest in supporting this journal.


Som Naidu, the editor, does an excellent job of introducing the articles in the journal under the heading of ‘Openness and flexibility are the norm, but what are the challenges?’ He correctly points out that

While distance education is largely responsible for the articulation and spearheading of openness and flexibility as desirable value principles, these educational goals are fast becoming universally attractive across all sectors and modes of education.

The rapid move to blended and more flexible learning and the slow but increasing use of open educational resources (OER) in campus-based based institutions indeed is challenging the uniqueness of distance education in terms of openness and flexibility. It is easy to argue that distance education is now no more than just another delivery option. Nevertheless, there are still important differences, and Som Naidu draws out some interesting comparisons between the experience of on-campus and distance learning that are still valid.

A business model for OER?

In this latest issue of Distance Education, Patrina Law and Leigh-Anne Perryman have written a very interesting paper about the business case for OER based on three surveys of users (in 2013, 2014, and 2015) of the UK Open University’s OpenLearn project. First some information about OpenLearn:

  • OpenLearn is an open content platform. Initially it used samples of course content from the OU’s undergraduate and postgraduate ‘modules’ (courses) but now hosts specially commissioned audio, video and other interactive materials and short online courses including free certificates and badges;
  • OpenLearn now offers the equivalent of 850 free courses representing 5% of the undergraduate and graduate degree content;
  • 6 million people visit each year with a total of 46 million unique visitors since it was established in 2006; 
  • 13% of users go on to enquire about the OU’s formal degree programs (equivalent of about 1,000 student enrolments per year).

Law and Perryman provide an excellent review of the business cases for OER put forward by others such as the OECD and Creative Commons, then use the survey data from OpenLearn users to test these arguments. Here’s what they found:

  • provision of OER is complementary rather than competitive with the OU’s formal degree programming
  • over half the users are UK-based
  • about 20% reported a disability
  • median age was 36-45
  • about 20% indicated that English was not their first language
  • 70% had some form of post-secondary qualification
  • 16% were part-time or full-time students
  • about two-thirds of the users were ‘tasting’ or ‘testing’ content before making a decision about whether to take a formal program (at either the OU or another institution)
  • almost half (45%) used OpenLearn to find out more about the UK OU (22% had never heard of it before and altogether over half knew nothing or little previously about the OU)
  • the average cost of conversion to OER was between £1500-£2000 per course
  • 13% of OpenLearn users clicked through to make a formal enquiry resulting in about 1,000 new student registrations.


Very importantly, Law and Perryman link the growing use of OpenLearn to the sudden increase in tuition fees in the UK (£9,000 a year in general, and £5,000 per year for an OU full time degree). Students are not willing to risk this cost without being sure they stand a chance of success and have an interest in the subject. OpenLearn allows them to test this.

This is an important point. The UK government policy of very high tuition fees does appear to be negatively impacting access for many potential students, or at least making them think very carefully before committing to such a large investment. The OU in particular has lost student enrolments as its fees have gone up. There is a danger in my mind that OER can be politically used as a diversion from ‘true’ open education for credit that is available to everyone, irrespective of their means. The best form of open education remains a well-funded state system.

This leads to my one serious criticism of the article. Apart from the cost of conversion, no proper analysis of the true cost of OpenLearn is given so the title is misleading. It does not describe a business model, with full input costs and output benefits stated in monetary terms, but a business case which provides uncosted but positive arguments based on other than cost factors. 

This is a really important distinction because the business model depends heavily on adequate funding for the formal, degree programs which provide the base for the OpenLearn materials. Without that funding, and other costs, OpenLearn will quickly become unsustainable. It is not a parasite in the negative sense of the word but it can’t exist without the funding for the core function of the OU. Without a sense of the full cost of OpenLearn it remains difficult to judge whether the obvious benefits are worth the drain on the OU’s other resources, as the money has to come from somewhere.

Otherwise this is a very good article that should read carefully by anyone concerned with policy regarding the use of OER.

Costs of DE in Indonesia

Belawati, T. (2006) Financial Management System in Open and Distance Learning: An Example at Universitas Terbuka EduComm Asia, Vol. 12, No. 1, pp. 2-7

In response to my post: The cost of online learning: $12.50 an hour, Dr. Tian Belawati, the Rector of Universitas Terbuka, directed me to an article she had written in 2006 on the costs of distance education at Universitas Terbuka.

In her article, she estimates the cost per student at the equivalent of US$80 a year, or around 25% of the cost of a traditional university degree in Indonesia. The article also provides an excellent breakdown of costs and a description of the budgeting process, as well as discussion of benefits related to costs.

There are several reasons for the low cost of a UT degree: a very large number of enrolments (200,000 per year); the use of mainly print, but with a range of other learner supports, such as optional online or face-to-face tutorials, radio, etc.; and of course lower costs in terms of salaries. compared to North America.

Thus using more traditional print delivery, large economies of scale can be achieved, indicating that for developing countries, online learning is not the immediate answer to widening access or maintaining quality (see Baggaley, 2008, for further discussion of this issue), because, although there are some economies of scale with online learning, they are nothing like those that can be achieved with one-way media such as print and broadcasting.

The issue then around online learning becomes one of timing and focus: gradually introducing online learning for those groups who have access, and for those for whom the benefits will exceed the costs, for instance for professionally oriented graduate programs, for programs aimed at developing knowledge-based workers, and for informal learning for farmers and others with access to mobile phones.


Hope and despair: managing technological change

Photo of Orlando centre

Orlando, Florida

In a very funny low budget British movie called ‘Clockwise’, John Cleese plays a school principal with an obsession about punctuality who is asked to give a keynote at a conference. By mistake, he gets on the wrong train, and the rest of the film is about him trying to get to the conference on time. With less than an hour to go, and stuck in a field miles from the conference, and with one last chance to get there, he says: ‘It’s not the despair that destroys you, it’s the hope.’

I thought about this when I gave a talk about the hopes and reality of e-learning at the Association for the Advancement of Computers in Education eLearn 2010 conference in Orlando last week.

AACE conference, Orlando

I was a keynote speaker on the Thursday. My topic was ‘Managing Technology in Higher Education: Strategies for Transforming Teaching and Learning.’ It was no coincidence that this also happens to be the title of the forthcoming book I am writing with Albert Sangra, of the Open University of Catalonia (due out in the spring of 2011).

The talk covered the following topics:

  • the challenge for public universities
  • goals for learning technology/e-learning
  • 11 case studies
  • criteria for measuring the integration of technology into teaching
  • how institutions planned for e-learning
  • how institutions organized for e-learning
  • quality assurance processes
  • resource allocations
  • training and professional development
  • barriers to change
  • recommendations
  • conclusions

A copy of the slides can be obtained from here (10 MBs).

Hope and despair

A major point in both the presentation and the book is that overall few higher education institutions have met at least my expectations of what e-learning can achieve. My hopes are as follows:

The intelligent use of technology will enable higher education institutions to:

  • accommodate more students
  • improve learning outcomes
  • provide more flexible access
  • at less cost.

From our 11 case studies and a literature review though, we conclude:

  • investment in learning technologies and support staff is increasing, without replacing activities, hence costs are going up
  • there is no evidence of improved learning outcomes
  • there is a failure to meet best quality standards for e-learning in some institutions.

But don’t give up yet

This is not yet cause for despair, because it was clear from our studies that while universities and colleges have increased flexible access, they have not been ambitious enough in their goals for e-learning, focusing more on ‘enhancing’ the quality of classroom teaching (adding cost) rather than redesigning teaching to meet new needs (improving learning).

We also found that the management of e-learning could be tightened up a great deal, particularly in the area of resource allocation and the costing of different kinds of teaching.

Most of all, lack of training in teaching and in management was resulting in uninspired applications of technology for teaching, and leading to increased costs through the need for lots of learning technology support staff. Better training could yield huge benefits.

Also, there may be no evidence, one way or the other, of improved learning outcomes, but this is because no attempt has been made to relate investment in technology to either improved outcomes or lower costs. More ambition, and better evaluation procedures and methods of tracking costs, may indeed show benefits (or losses).

So we need to keep trying. After all, in the movie, John Cleese did manage to make it in time.

Where do the resources for technology-based teaching come from?

In an earlier blog, Struggling with Costs of Teaching in Higher Education, I complained about the lack of research into the costs of teaching, and particularly the lack of research into the costs of e-learning in post-secondary educational institutions. Well, some of you came to my rescue. In particular, Burkhard Lehmann directed me to the following:

Laurillard, D. (2007) Modelling benefits-oriented costs for technology enhanced learning Higher Education, Vol. 54, No. 1, pp. 21-39

Now Diana is a former close colleague of mine in the early 1980s when I was a professor at the U.K. Open University, so I was not surprised that this article provided not only an excellent and comprehensive review of the literature on the costs of what she calls technology-enhanced learning, but also a description of her own ‘benefits-oriented cost model.’ (But I was surprised I didn’t know about it). I may have some quibbles about what she sees as the main benefits of technology-enhanced learning and how she would measure it (she emphasises particularly ‘personalization’), but nevertheless it was really good to find all the work in this field  brought together and thoughtfully critiqued. Thanks, Diana – and Burkhard!

In the end, though, I realised that for the purposes of my chapter, I was looking at something somewhat different from what Diana, myself and others have been doing with research into costs, and that is, how decisions are made about the allocation of resources. In essence the research on costs looks at the what – what was spent – not the ‘how’: how were decisions made about this.

My problem is that we didn’t collect very good data about this from our 11 case studies, and if there isn’t much research on costs in the literature, there is even less on how such decisions are made. However, here’s what we did find.

1. About half of the institutions in our case studies found substantial amounts (over $1 million) to kick start or develop e-learning, from ‘off the top’, that is, before allocations to spending units, such as academic departments or building maintenance. Anything less than this did not produce significant, sustainable developments. Furthermore, at least half the institutions were spending substantial amounts every year through the general operating budget and departmental budgets in supporting technology-based teaching (for instance learning technology support units, grants to faculty, faculty development, etc.). However as researchers we did not identify how much.

2. For regular, sustainable operating funding for technology-based teaching, it remains a mystery to me where the money comes from. Well, not so much where it comes from, but what was given up to find it. A typical comment from a senior administrator responsible for developing e-learning would be: ‘I don’t know where the money is going to come from, but we have to do it.’ However, I think the assumption was that instructors would give up doing some things so that they could spend more time on e-learning, but since the main goal in the nine campus-based institutions was to enhance the traditional classroom teaching, we think that this in most cases did not happen.

3. This raises then the question: what did? I have a nasty feeling (and no evidence) that the resources came from the following: increased instructor workloads (more time spent teaching, because of the technology); or larger classes (fewer instructors hired to pay for learning technology units, for instance); or an increase in the proportion of lower cost adjunct faculty; or a slowing down in the number of new courses or programs; or a combination of all of these. However, we don’t know, because there is no data, and most institutions are not able or willing to measure this. Our conclusion: be clear as to where the money should come from, and deliberately reallocate from those areas, if you want to avoid unpleasant unintended consequences. Put another way, don’t add technology on to the classroom: use technology to replace time in the classroom, if you wish to use it cost-effectively.

4. Current financial reporting systems are inadequate for tracking the true costs of e-learning. E-learning, like research, lectures, laboratories, committee meetings, and field trips, is an activity, but financial reporting is based on spending units or departments, not activities. So we know the cost of paying professors, but not the cost of their activities. If we want to know how much we are spending on technology-based teaching, we need to know how it affects the work of instructors. We argue for the ability to do activity-based costing by collecting and storing financial and other data in such a way that it can be reanalyzed for activities by using business intelligence software.

5. There are ways to control the costs of technology-based teaching, but this means changing the way we design, develop, and deliver courses, as well as having better ways of tracking costs.

6. You have to look at benefits and unintended losses as well as costs – but we don’t identify clearly the intended teaching benefits of technology or if we do, we don’t measure the extent to which we have successfully achieved them, and relate costs to them. It may be worth spending more money on technology, but not if you can’t say what the benefit is. You also have to check for unintended consequences.

Are there administrators out there who have been grappling with the issue of resourcing technology-based learning? How have you gone about it?

Does this equate with your experience or have I lost the plot?

Is e-learning failing in higher education?

In an earlier posting, the State of e-Learning, 2008, I suggested that e-learning was failing to meet expectations in higher education. In that posting, I reported that David White, Director, EU Commission DG Education and Culture, Lifelong Learning, in his keynote presentation Innovative Learning for Europe at the 2008 EDEN conference in Lisbon, expressed his concern about the lack of return on investment. He pointed out that national governments and the European Commission have invested over a billion dollars in ICTs for education, but have seen little change or improvement as a result.

The other, related, issue is the lack of innovation. The World Economic Forum’s Global Advisory Committee on Technology and Education at its meeting in Dubai (November, 2008) commented:

‘Education is in a state of transition from a traditional model to one where technology plays an integral role.  However, technology has not yet transformed education’.

In particular, although there are many innovative ‘projects’, often dependent on the work of inspired and hard-working individual instructors, and although many institutions have put in place learning technology and faculty development initiatives, there appears to be little systemic change (see Sangra, 2008). As the Canadian Council on Learning (CCL) puts it: ‘The growth of e-learning has not significantly altered the way in which Canada’s institutions organize or deliver learning.’ Nor is this peculiar to Canada.

More recently, we have had the CCL report that concluded that Canada is falling behind other countries and the adoption of e-learning is slower than predicted – both of which statements are made without any conclusive evidence (see my review of the report). However, perception is as important as reality in this business, especially when investment in technology is dependent on public funding and support. In any case, Terry Anderson commented in his blog that he was saddened by Canada’s ‘lost decade in e-learning‘.

Thus, while plenty of evidence (e.g. Allen and Seaman, 2008; Instructional Technology Council, 2008) can be provided to show that computers and the Internet are now widely used by a majority of faculty and students in post-secondary education, there is also at the same time widespread dissatisfaction with the results.

What I want to do in the next few blogs is examine:


Allen, I. E. and Seaman, J. (2008) Staying the Course: Online Education in the United States, 2008 Needham MA: Sloan Consortium

Canadian Council on Learning (2009) The State of e-Learning in Canada, Ottawa: Canadian Council on Learning

Instructional Technology Council (2008) Tracking the Impact of e-Learning at Community Colleges Washington, DC: Instructional Technology Council

Sangra, A. (2008) The Integration of Information and Communication Technologies in the University: Models, Problems and Challenges (La Integració de les TICs a la Universitat: Models, Problemes i Reptes) Unpublished Ph.D., Universitat Rovira i Virgili, Tarragona, Spain

White, D. (2008) Innovative Learning for Europe, EDEN Annual Conference, Lisbon

World Economic Forum (2008) Report of the Global Advisory Committee on Technology and Education Dubai: World Economic Forum