The Real Costs of e-Learning

1. The Real Costs of e-Learning What are they? How can we find out? Professor Paul BacsichUK eUniversities Worldwide Limited Presentation to Venezualan Delegation,16 March 2004

2. Contents • Key issues in a borderless world • UK Transparency Review • Activity Based Costing [CNL2] • Activities for Networked Learning [CNL1] • Application to e-learning

3. Key issues -and a challenge • There is now 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 methodology, including costs, which copes with a world without borders… • Borders are not only geographic

4. UK Transparency Review • HEFCE Initiative - and other Funding Councils • Focus on costs of research and teaching • Compulsory • Reports on 5 main activities: T2R2O • Uses “Activity Based Costing” terminology • Uses Activity Time Sheets • Phased implementation, mainly led by research-intensive universities

5. Transparency - conclusions • It has been a useful if painful exercise for universities and funding agencies • Pressure is increasing on research funding agencies to raise the overheads they allow as real costs become clear BUT, in reference to the “eternal dilemma” • It does not seem to have led to operational conclusions • Because it is not detailed enough?

6. Scope of CNL2 project • Sarah Heginbotham (SHU then UKeU then Canada) • Funded by JISC (Joint Info Systems Cttee) • From CNL1: Recommendation that activity-based costing be trialled in a university • Chose the School of Computing and Management Sciences at Sheffield Hallam University, UK • 6 months project , started summer 2000 • Transparency Review was going on also

7. Cooper and Kaplan - ABC • Developed in 1988 as an alternative costing methodology at Harvard Business School • They argued that traditional costing distorted product costs • “peanut butter spread” approach • There is a cost to all activities carried out within an organisation • e.g. transport of peanuts • Activity costs should be distributed to products in relation to their use of resources

8. Advantages of ABC • Gives more than just financial information • “Fairer” system of overhead allocation • Accountability of central services e.g. IT • Highlights cross-subsidisation • Recognises the changing cost behaviour of different activities as they grow and mature • Can provide data for other initiatives • e.g. Transparency Review and Quality

9. Disadvantages of ABC • Data collection can be costly and time consuming • Initially it can be challenging to collect the data you want • Need to determine appropriate and acceptable cost drivers • ABC is a more complex system than traditional management accounting • and relies on that being done well !

10. CNL2 Conclusions • ABC does work in HE and will be increasingly used in institutions, especially “ABC-lite/ABM” • It works on different levels within the institution • Suitable software and professional support is essential, in the early days at least • Academic scepticism can be overcome • Costings data needs to be placed in context

11. Networked Learning - CNL1 • Paul Bacsich • and Charlotte Ash (now in public sector “Best Value” programme) • Sheffield Hallam University, UK • 6 month study (in 1999-2000) • Funded by JISC • Aim - to produce a planning document and financial schema that together accurately record the Hidden Costs of Networked Learning

12. Examples of Hidden Costs • Increased telephone call and printing bills for students due to Internet usage • Entertainment expenses “necessarily” incurred by academic staff at conferences but not reimbursed by the Institution • 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

13. Mega-activities for teaching:Lifecycle model • Cost items recorded from literature • All current educational and training costing models analysed (Rumble, Bates, etc) • Traditional financial accounting analysed • Consultation with academic staff • Various cyclic models proposed, leading to...

14. Course Lifecycle Model Three-phase model of course development Planning and Development Maintenance and Evaluation ProductionandDelivery

15. Breakdown of three-phase model (activities)

16. Financial Schema - “Stakeholders”

17. Conclusions from CNL1 In order to accurately record the Costs of Networked Learning you must have a sectorally-accepted method of what costs to record and how, in place from the start, which takes into account all stakeholders and uses Activity Based Costing within a framework of phases of the course development life cycle

18. What are the True Costs? • Q: What is the rate per study hour? • Different kinds of study hours: • Active engagement with specifically created “teaching” material (expensive) • Thinking, conversation • Doing assessment • Studying “resource” e-content (cheaper) • Surfing the open web (cheapest, but worst?

19. Rough guide - rule of thirds • 1: Study of “engaging” multimedia • 2: Study of existing or slightly modified learning resources • 3: Working on assignments (maybe in collaboration) • Costs (US, UK and Germany) • average $12000 per m/m hour, but v. large  • 10% of this for simple material • could one aim for $1000 per hour?

20. Content development 1 • Determine the level of demand • Produce an outline plan of the courseware • Conceptualise the subject knowledge • Structure and design the learning experience to be provided by the courseware materials • Decideinteractivity with the learner, the level and ways of building tutorial support into the material itselfand the links with other materials.

21. Content development 2 • Decide the formative assessment exercisesand the ways of providing feedback to the learner (and to the tutor if appropriate) • Decide the summative assessment associated with each module • Establish a range for the possible levels of on-line tutor support for each module. • Consider the interface between the learning programme and its sub-parts and the administrative support software tools

22. Consortia - Critical Success Factors • High “binding energy” • may come from top-down or funding-driven • but more likely from friendship or shared vision • does not depend much on legal aspects • Organisational homogeneity or managed diversity • Linguistic and cultural similarity • Stratification • “Safely far away” [Source: TL-NCE, UNESCO report]

23. Other topical questions • Will research advances reduce costs? • Will Open Source reduce costs?

24. Research • This may be too much of a personal view • I have been conference organiser, evaluator, reviewer,... • Look at impact from EU research work • Look at impact of work elsewhere • UK • TL-NCE (Canada) • US • Australia, New Zealand, Singapore Hong Kong….

25. Research conclusions • European research: FP3 set the scene; FP4 added little, FP5 more promising • Canadian work credible and integrated, but lacks evidence of scalable approaches • Too much gap between computing theorists and industrial-strength pedagogic practice • few theorists in universities are seriously active in e-learning services • US is very synchronous and transmissive, paradigms that do not fit a time-poor world

26. What research might reduce costs? • Focus on co-operative learning • Start with basic asynchronous “BBS” model • Allow new models to be supported, especially those with business potential • Develop scalable approaches • more focus on automated assessment? • Support multiple media and devices using same content • Develop more effective learning esp time-effective

27. Can e-learning save time? • travel time • reduce “time on task” • by “better” training (25-40%) • by individualised training... • by using “time of the 3rd kind” • Time1 : on duty - used to be called “at work” • Time2 : off duty (not at work) • by consolidating time fragments

28. Open source issues • Exemplars: • Linux, MIT, Canadian, Finnish, IMS, UK interest • Purpose: • Challenge commercial vendors • Facilitate research by providing flexible system • Cheaper? • Yes, to buy • No, to support (scalability, robustness?) • Few successful large e-learning players use “pure” open source, but several use modified

29. Features of a uniform cost-aware evaluation methodology • Costing basis must be clear • To gain political buy-in and breadth (multi-sector, etc), depth will be small • Students treated as people not only learners • Focus on level of knowledge and skill gained • Focus on time issues, not only time on task • time 1, time 2, time 3 - and differential value? • More feasible when there is a more uniform curriculum or exams (as in schools)

30. Details about CNL costings projects - At http://www.shu.ac.uk/cnl/thanks to support from SHU and JISC Professor Paul Bacsichpbacsich@ukeu.com