Growing the institutional online footprint is an important campus priority for many colleges and universities. It’s often driven by a necessary search for new revenue in the face of increased competition, legislative mandates, reduced state funding, and increasing skepticism about the value of higher education.
For Millersville University, Millersville, Pa., an overall enrollment growth strategy—focused, in part, on increasing the number of online students—is designed to result in a bump in tuition revenue. The university’s experience in developing its distance learning strategy demonstrates the value of understanding and maximizing your institution’s internal expertise—and then outsourcing only what others can do better, faster, or more efficiently.
While the university’s efforts relate to expanding its online learning initiative, this article explores the ways that Millersville leaders arrived at this approach, and offers advice for institutions of all sizes and types about outsourcing only services you need and using internal resources for the rest.
Developing the Big Picture
At a Sept. 5, 2014, convocation, Millersville University President John Anderson announced new targets for online enrollments in a plan titled “A Bold Path.” Citing “shifting demographics, increased competition, changes in technology, and challenging financial issues” as underlying drivers of the online learning initiative, the plan calls for 1,200 online students generating $9.5 million to $10 million in tuition revenue by 2020.
Other elements of the plan include increasing the out-of-state student population and transitioning to a per–credit hour tuition model. Combined, these efforts represent a potential of $27.5 million in new revenue by 2020, nearly 20 percent of the university’s operating budget.
Millersville already offered two online master’s degrees and two online graduate certificates, all of which were launched, marketed, and managed in-house. While small in scope, and with limited budgets, the master’s programs enrolled 81 students and had met internal performance metrics. These efforts illustrated the positive benefits of online programs, experience that would prove crucial in future planning and execution of the bold path plan.
Leaders in the budget office, academic affairs, and the cabinet tested, vetted, and revised enrollment metrics needed to meet the ambitious goals for the increased number of online students and significant new revenue by 2020.
The budget office calculated anticipated revenue based on the current per-credit tuition rate times the expected credit hours generated, while also factoring in costs for creating, marketing, and teaching the new online programs (see table below for an example of one program). Explaining the budget calculations, Victor DeSantis, dean of graduate and professional studies, notes: “Working directly and collaboratively with our budget director to develop a five-year budget forced us to be mindful of short-term fiscal boost, long-term sustainability, and attention to detail in direct and indirect costs, while balancing our aggressive goals in support of quality program offerings that meet the needs of future students and the region.”
Realizing that the university lacked the capacity and expertise to grow its online footprint on a broad scale, the leadership met with online program management firms, which have helped many colleges and universities develop and expand their online offerings. The core business model entails a for-profit company providing nonacademic services in marketing, recruitment, retention, and instructional design in return for a share of related tuition revenue. That share often averages 50 to 60 percent, over a predetermined period of time that can be as long as seven or more years.
Beyond expertise in these areas, perhaps the biggest benefit that online program management firms offer is the upfront capital needed to bring online degrees to market, which can take seven figures to launch—resources that many institutions either don’t have or don’t want to risk.
While this turnkey approach appeals to some, others find it politically untenable, fiscally imprudent, or too constricting. Millersville’s leaders decided that the university was in an excellent position to consider a different model. Combining adroit guidance from knowledgeable consultants with a strong balance sheet resulting from a history of financial prudence and good stewardship, the institution could capitalize on existing internal assets. The strategy: Couple previous online experience, existing resources, and in-house expertise with specific external point providers that could plug the operational gaps on an as-needed basis.
To identify the areas of greatest need, Millersville hired Higher Education Research Consultants (HERC), a firm that focuses on helping universities research, scope, launch, and grow online degrees. A review of internal capacity and staffing led consultants and university leaders to the realization that Millersville could manage recruitment and retention efforts with existing (or redeployed) staff, but that it needed external assistance in three core areas: market research, digital marketing, and instructional design.
Market research. HERC conducted market research to help determine the first new online degree offering. The immutable law of supply and demand is a key driver of most online degree efforts. For Millersville, that regional reality influenced the decision to begin with an online, nursing degree–completion program, the RN-BSN.
Extensive secondary research into the online RN-BSN space, found that 53 percent of Pennsylvania registered nurses lack a bachelor’s degree, creating ample demand for another online RN-BSN program in an already competitive space.
An in-depth competitive analysis looked at other institutions offering an online RN-BSN program, identifying considerable weaknesses in customer service, Web design, and consistency that could become strengths for Millersville’s program. Researchers gathered data on key attributes of competing programs, including tuition and fee structures, required number of credit hours, and required clinical experiences.
The results proved invaluable for establishing key attributes of Millersville’s forthcoming online RN-BSN. As Robert Smith, former dean of Millersville’s School of Science and Mathematics, notes, “The choice of the RN to BSN program as our first new online program was an easy one; there is currently significant unmet demand for such a program within Pennsylvania, and since we already had a high-quality RN-BSN program, with existing courses that were either blended or fully online, this was a likely choice.”
Digital marketing. With the first new online degree identified, Millersville explored its marketing challenges. Not-for-profit colleges and universities, not necessarily known for their marketing prowess, sometimes struggle to successfully generate interest and leads for ground-based programs. These struggles are amplified when marketing online degrees, an effort that requires finesse; ongoing testing; and an in-depth understanding of paid search, search engine optimization, retargeting, and other tools of a rapidly changing industry.
Based on the fundamental premise that “online learners search for online degrees online,” Millersville knew it needed outside expertise to frame and execute a sophisticated digital marketing effort. Working with the university’s new executive director of marketing and communications (a veteran of digital marketing), HERC helped create an RFP to solicit bids from qualified digital search firms.
The university reviewed numerous proposals and ultimately selected a local marketing firm to create Web assets and manage a sophisticated paid- and organic-search operation to garner attention and generate leads.
Instructional design. Adapting an existing curriculum for online delivery is a time-consuming, delicate effort; long gone are the days of simply making PDFs of course materials and recording professors on video. Millersville’s existing instructional technology team lacked the bandwidth and budget to adapt the entire RN-BSN curriculum for use in cutting-edge online delivery, much less for future online programs. Because instructional designers are generally in great demand and command salaries that few universities can meet—and given the staggered rollout of new online programs—the decision was made to outsource this work to freelance specialists.
A team including existing instructional technologists, faculty, deans, and procurement personnel developed an RFP soliciting this expertise. The goal was to select not only one entity, but also to review and qualify multiple instructional designers, to build a go-to roster of professionals with expertise in a variety of academic disciplines. This version of just-in-time thinking gives Millersville the expertise it needs, when it needs it, without making costly long-term hires.
While the primary goal was outsourcing to experts only as needed, while repurposing existing university expertise where possible, consultants suggested that long-term success would require a dedicated professional to oversee the myriad challenges associated with launching online degrees. Consequently, the university made a strategic hire in Lauren Edgell to serve as director of online programs. Housed in the College of Graduate and Professional Studies and reporting to its dean, she has oversight of both internal and external efforts to launch and grow the online RN-BSN program as well as the existing and future online degrees.
Online degrees touch nearly every aspect of an institution. Faculty are of paramount importance, of course, while administrative functions—including the registrar, admissions, financial aid, IT, academic and career advising, student services, the bookstore, and the library—all have to engage in and support the endeavor.
At the outset, consultants brought these disparate entities together to review the new online degree(s) and explore the steps needed for a successful launch. Initial reaction was mixed, with some claiming that the program required too many changes. This response is not uncommon, and can quickly derail even the best plans, but leaders at the highest level of the institution were effective in aligning campuswide priorities and helping assuage many of these concerns.(See the sidebar, “Pitfalls and Persuasions” for more on creating better buy-in.)
The research consultants urged the leadership to adopt the key attributes of successful online degrees including: six intakes per year, asynchronous delivery, competitive tuition and fees, waiver of the out-of-state tuition differential, seven- or eight-week courses, and building a course carousel to facilitate multiple intakes per year. By offering the introductory course every term, the carousel model allows every new student to begin with the baseline course.
Additional courses are launched so that online learners always have at least two course options (above the introductory class) in a given term, which eliminates the need for stop-outs and positively influences persistence and completion rates.
Lauren Edgell admits that implementing these best practices has presented challenges: “The online RN-BSN program is the first undergraduate program that incorporates an accelerated seven-week course, six-starts-per-year model. We have worked with the faculty to visualize their curriculum in a seven-week online model instead of the usual 15 weeks. Administratively, we’re (1) addressing how the financial aid office will disperse student loans when half of the student’s course load doesn’t begin until eight weeks into the semester; (2) reconsidering our somewhat strict add/drop, withdraw, and refund policies; and (3) calculating how we will apply them fairly to partial-semester terms. Also obtaining state operating authority is an ongoing challenge.”
Early Status Report
The new online RN-BSN program welcomes its first cohort in August 2015. The outsourced marketing firm has created the initial digital marketing efforts, generating leads that the in-house admissions team is counseling through the admissions process. Millersville has budgeted for 15 incoming students per cohort for the first year. Currently, the admissions office is 73 percent toward this goal and expects to easily meet, if not exceed, this expectation.
Meanwhile, the senior leadership is exploring the next set of online degree offerings, which will likely include an master’s in education in assessment, curriculum, and teaching; a master of science in nursing; a master of social work; and an undergraduate multidisciplinary degree.
Launching online degrees with selected point providers instead of a full-service online program management firm is working for Millersville University, but it’s not for every institution. Business officers faced with this challenge should certainly consider the option of using such point providers. However, this strategy requires strong leadership, a favorable balance sheet (or the institutional comfort level with a certain amount of financial risk), and a willingness to endure short-term challenges for long-term freedom and revenue potential.
Coupling internal expertise with select external outsourcing agents—and adding a consulting firm to serve as a general contractor—will help ensure that you launch the right online degrees at the right time and that all of the internal pieces are in place to generate enrollments in online degrees that the market needs and wants.
ROGER V. BRUSZEWSKI is vice president for finance and administration, at Millersville University, Millersville, Pa.; and SCOTT H. LEVINE leads Higher Education Research Consultants, a firm that helps universities research and launch successful online degrees.