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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

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Contents Key issues in a borderless world

UK Transparency Review

Activity Based Costing [CNL2]

Activities for Networked Learning [CNL1]

Application to e-learning

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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

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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

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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?

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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

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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

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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

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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 !

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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

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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

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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

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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...

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Course Lifecycle Model

Planning and Development

Production and Delivery

Maintenance and Evaluation

Three-phase model of course development

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Breakdown of three-phase model (activities)

Planning andDevelopment

collecting materials storyboarding writing user guides or course

publicity

Production andDelivery

curriculum delivery duplication of materials tutorial guidance

Evaluation andMaintenance

quality assurance exercises replacement and updating of

materials evaluation against course aims

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Financial Schema - “Stakeholders”

Stakeholder dimensionExpendituredimension Institution Student Staff

Total

Staff costs

Depreciation

Expenses

Overhead

Total

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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

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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?

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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?

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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 Decide interactivity with the learner,

the level and ways of building tutorial support into the material itself and the links with other materials.

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Content development 2 Decide the formative assessment exercises

and 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

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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]

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Other topical questions

Will research advances reduce costs?

Will Open Source reduce costs?

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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….

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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

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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

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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

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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

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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)

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Details about CNL costings projects -

At http://www.shu.ac.uk/cnl/ thanks to support from SHU and JISC

Professor Paul Bacsichpbacsich@ukeu.com