Technology Affecting Education’s Game Facilitated by Albert Chiaradonna Mosaic Partners llc

1. Technology Affecting Education’s Game Facilitated by Albert ChiaradonnaMosaic Partners llc www.mosaicpartners.com 610.918.9171 October 8, 2004

2. Agenda - Overview • Introduction and Setting the Stage • Industry Trends in Education and E-learning • Customer and Industry Value • Findings • Conclusions • Business Designs for a Changing Market • Evolution vs. Revolution • Range of Business Models • Key Processes and Assets • How Can Your School Get Started - Practical Approach • Methodology • Top 10 • Questions and Conversation

3. Patterns of the Past…Visions of the Future “e-Learning will be the next big killer applicationon the Internet -- it’s so big, it’s going to makee-mail look like a rounding error.” Cisco Systems CEO, John Chambers “The message hasn’t changed much, it is the context of the message that has changed dramatically.” SEI Investments, SVP Global Private Banking and Trust, Albert Chiaradonna “Human skills are subject to obsolescence at a rate unprecedented in American history.” Federal Reserve Board Chairman, Alan Greenspan

4. Patterns of the Past…Visions of the Future If context is changing, howhow do you remain relevant? How do you add value? What process can we use to facilitate value migration? • Add value • Industry • Position

5. Industry Trends in Education andE-learning • Customer and Industry Value • Findings • Conclusions

6. Industry Trends – Customer and Industry Value OBJECTIVE UnderstandWhat Customer Value Where is value migrating? Examine Industry Influences Who has power? What are the rules? Analyze Competitive Landscape Who is your competition? What is your position? Identify Internal Assets What are your core competencies?

7. Industry Trends – Customer Value • Well Articulated, Yet Unmet Need • Value Through an Experience…Not a Product • Content is a Commodity…Context is King! • Customization Provides Relevance for the Learner • Technology Enables Richness and Reach for the Learner • Segmentation Creates Opportunity for Focused Players • Abbott Labs – Director of Leadership Development • AIG – Director of Leadership Development • AXA Financial – VP of Learning and Development • Bearing Point – CLO • Cigna – Head of Corporate University • Deloitte – Director of Leadership Development • Electronic Boutique – Director of Training • SAP – Senior VP of Education • Vanguard – Dean of Company –wide Schools, Corporate University • Unisys – Director of Corporate University

8. Industry Trends – Industry Influences • Large, Growing, and Highly Fragmented Market • Geographic Boundaries are No Longer Boundaries • Technology has Created Greater Independence on the Supply Side • Technology has Blurred the Line Between Commerce and Education • Rapid Emergence of the Life Long Learner • Less Focused on Degree and More Focused on Enrichment • Business Week and Cambria Consulting • Goldman Sachs • IDC Industry Reports • Training Magazine • ThinkEquity • WR Hambrecht • Outsell • Various Other Websites and Analysts Reports

9. Industry Trends – Competitive Landscape • Technology has Disrupted the Education Space – Creating a New Low Cost Group of Competitors • Brands Need to Separate Themselves or be Pushed Towards Commoditization • Except the Premium Brands • Gap in Client-centric Academic Institutions • Graying of the Line between Competition and Collaboration – Enabled by Technology • Carnegie Mellon • Columbia • Drexel • Indiana • Michigan • Wharton • Achieve Global • Dale Carnegie • Development Dimensions Int’l • Gallup Organization • IRR Global • Richardson Group • The Kan Blanchard Companies • Wilson Learning

10. Industry Trends – Internal Assets • Aging Undergrad Population Demands a Redefinition of the Learning Experience • Size is Less Relevant • Migration for Tangible to Intangible Assets • Access to Content as Opposed to Development of Content • Access and Maintenance of Customer Relationship Along the Life Long Learning Continuum • Right Management • Villanova University • VIA • University of Michigan • Indiana University

11. Business Designs for a Changing Market • Evolution vs. Revolution • Range of Business Models • Key Processes and Assets

12. Business Designs – Evolution vs. Revolution Vision Customer Stickiness Access to Capital Scale & Leverage Advances in Technology Change in Customer Priorities Change in the Competition Plan

13. 60s & 70s 80s 90s 2000 + Growth Organic Revenue M&A Operational Efficiency Profit Product Imitation Product Commoditization Product Proliferation Client Experience Customer Value Competitive Differentiation Scale Speed to Market Technology Utilization Business Design Business Designs – Evolution vs. Revolution

14. Business Designs – Range of Business Models…AOL 1995 $23+ Price Access Value

15. Business Designs – Range of Business Models…AOL 2004 $46 Cable, Broadband We live in constantly changing and intensely competitive markets We must constantly innovate and make tradeoffs AOL $23 Price NetZero Erols < $9 Community Access Content Value

16. Business Designs – Range of Business Models…Client Example

17. Business Designs – Range of Business Models…Client Example

18. Business Designs – From Business to Revenue Model Business Model • Approach – Customer centric • Consultative and understanding (needs) • Context (Content without Context is quickly becoming a commodity) • Switching Cost (time to educate) • Offering – Focused and Flexible • Ease of Customization (relevance vs. profitability) • Cases, Simulation, and Examples must be Company Specific • Focused on Solving Level Specific Business Issues – in the Middle Market • Don’t be everything to everyone – where can we excel and be profitable? • Experience – Business Academics • Collaborative • Coaching and Mentoring • Thought Leadership • Credibility with Leadership Revenue Model – Pricing Model • Design, Development and Delivery Fees • Won’t reward us much for customization! • Be lower total delivered cost than other university players! • Consulting Fees • Competency models • Development plans • Coaching, Mentoring and Other Support Fees • Articulated need to make learning extend beyond the classroom • Training for the employee’s manager

19. Business Designs – Key Assets and Processes • Sales processes and account management processes (one point of contact that truly understands my needs) to develop the right relationship with right levels of buyers – having the right discussions. • Needs assessment to drive customization • Ego Management – we want to be the customer and we want to be involved in the design, development and delivery! • Risk Management – we want to know exactly what we are getting because the audience isn’t forgiving, at all! • Integrity, trust, credibility with leadership, one point of contact, knowing when and when not to respond to opportunities. Don’t try to be all things to all people! • Customization at low cost! • Frameworks • 60 to 80% complete • Developing a qualified pool of delivery people. • The business – academics! • Consultative Approach to understanding and meeting customer’s needs • Context is assumed – without it you are a commodity! • What should your partnering network look like – including other training providers? • Commercialization session? • How are you leveraging your fan base? • Commercialization session?

20. How Can Your School Get Started - Practical Approach • Methodology • Top 10

21. Understand Market Select Opportunities Determine Customer Needs Analyze IndustryForces Analyze Competitive Environment Identify SEI Assets and Capabilities . . . that aren’t already served well by competitors. . . . . . . And SEI has the current or emerging capabilities to serve . A Broad Array of Current & Emerging Needs. . . . Getting Started – Methodology MARKET IMMERSION

22. Getting Started – Top 10 Practical Steps • Sustainable growth is not about products! • Value in migrating from products to solutions and experience! • Solutions and experiences are customer dependent! • Value can’t be applied evenly across all customers! • Value must be created for customers, business partners, ecosystem participants, etc. • You can’t do it all, so partner (build ecosystem) to create value through solutions! • Unbundle your value! • Understand the personal/ intimate needs of your customers! • Rebundle your value! • Invest in your intangible value (assuming your product is good)! • Focus on internal branding where all employees can communicate (with passion) who you are, what you do, and how you are different! • Think about the relationship – even when closing on a transaction!

23. Questions and Conversation