1. Cost-benefits of (e-)learning Paul Bacsich, Director of Special Projects UK eUniversities Worldwide Limited WCBF/London, September 2003

2. 1 Structure of session About UKeU (10 min) About costing, especially hidden costs (20 min) Interactive exercise in small groups (15 min)

3. 2 UKeU: Core Mission and Values Customer focus Quality driven Integrity Shareholder value Innovation in techniques, technology and approach To deliver the best of UK university education online across the world

4. 3 UKeU programmes Wide variety from the best UK universities Masters, degrees, diplomas and certificates: Business and Management Information Technology Healthcare English Language Biotechnology, Environment and Science See www.ukeu.com for latest list

5. 4 Higher education – and more Corporate training (including but not restricted to offers from UK universities such as “corporate Masters”) Managed Services Consultancy and Research

6. 5 Corporate customers: Marketing/business development In selling and marketing to corporates, UKeU will: Ensure that the offer (eLearning) has demonstrable currency in staff recruitment and retention Demonstrate that the offer has training competency, plus academic worth where appropriate Align each offer to corporates’ business strategies Facilitate the creation of a convincing R0I rationale Learning and training for business effectiveness

7. 6 Managed service eLearning integral to business life

8. 7 Managed service Access to UKeU world-class eLearning platform Access to UKeU development tools Access to UKeU experts* in eLearning software development Consultancy and project management services Generation of re-usable Learning Objects, to SCORM and IMS standards Production of management information reports (for RoI, etc) Provision of billing services Low start up costs Reduced recurring costs

9. 8 Operational infrastructure Enterprise-class Managed Learning Environment developed jointly with Sun Microsystems Fujitsu: data centre and network partner Fully redundant and rapidly scaleable multiple internet connections to UK and worldwide Fully redundant architecture to ensure 99.5% availability Usual Data centre services 24 x 7 Help Desk

10. 9 Special Projects: Consultancy and Research Research Centre (UKeU+Manchester+Southampton) System design, multi-cultural aspects, costing, standards In addition Evaluation of courses Quality management Sponsored research, development and consultancy Specific studies and projects: Standards conformance, initially for content (EU) Mid-band services including “training TV” and synchronous Role of f2f in e-learning-led propositions Off-line working (including m-learning)

11. Cost-benefits of (e-)learning

12. 11 Pedigree of costings work “Costs of Networked Learning” Project JISC-funded at Sheffield Hallam University 1999-2001 case studies including ABC trial large literature search of distance learning, e-learning and e-training articles Telelearn study of costs of e-training (EU funded) Other work: costs of IT systems for e-learning, change management, tools for e-learning,... Concepts also developed and refined while running joint MSc courses at Sheffield Hallam U with vendors (SAP, Oracle…) for government and corporate customers

13. 12 Some terminology Costs: on the books, and off (more later) Benefits: productivity via skills or attitudes RoI: Benefits  Costs as a % Differential RoI: RoI compared with classroom Metric: way of measuring benefits E.g. less time off work faster response to customers less bad debts

14. 13 Back to basics: Why install e-learning? Benefits first!! Save money reduce trainer costs by use of IT reduce trainee costs travel cost Save time travel time Train better (15-25-60% gains?)…so save time or money later

15. 14 Back to basics: Why install e-learning? Benefits first!! Save money reduce trainer costs by use of IT reduce trainee costs travel cost reduce “system” costs; by exporting costs to trainee  E.g. own PC in own room on own phone... In own time…...

16. 15 Hidden Costs/Savings Employers focussed on the direct costs of the training programs and were “unaccustomed to identifying the indirect costs that the project was encouraging them to do” – Temple (1995) We have identified many examples of hidden costs space costs may decrease (e.g. training rooms) IT costs will increase admin costs should decrease costs hidden in trainee budgets may increase... Hence the stakeholder approach

17. 16 Save time – much more complex... Save time travel time reduce “time on task” by “better” training (25-40% saving?) by individualised training (easier)

18. 17 Save time – much more complex... Save time value travel time reduce “time on task” by “better” training (25-40% saving?) by individualised training (easier) by moving time to “time of the 3rd kind”  E.g. by using time fragments

19. 18 Time of the 3rd kind Time 1 : on duty - used to be called “at work” Time 2 : off duty (not at work) Time 3 : in-between on duty but less productive E.g. travelling E.g. slots in between other tasks off-duty but somewhat productive E.g. in bar with colleagues E.g. at dinner with customers

20. 19 Time 3 – value “time of 3rd kind” can be hard to deal with BUT This kind of time is the entry point for m-learning

21. 20 The main Stakeholders – and their time 3 issues The organisation and the staff of that organisation The learners

22. 21 Stakeholders – two more special cases The organisation and the staff of that organisation The learners and their organisation (e.g. supplier chain) and in some cases their parents/partners

23. 22 Course Lifecycle Model Planning and Development Production and Delivery Maintenance and Evaluation Three-phase model of course development

24. 23 Breakdown of three-phase model

25. 24 Issue 1: Cost drivers – Economies of scale The phase in traditional training where numbers truly bite is the Production & Delivery phase. Careful choice of delivery method can contain the growth in delivery costs… E.g. use of highly interactive content But this tends to involve high front-loaded costs and longer time cycles and more issues with updating

26. 25 Issue 2: Interaction In training: early CBT had no truck with tutors In universities: tutor involvement, and interaction between students, has been seen as important constructivism However, the worlds have nearly converged There is nothing bad about e-tutor involvement: just build the costs into your budget

27. 26 Towards RoI – the spreadsheet The traditional financial model underpinning professional work in many (not all) companies is defective in at least four ways: No Stakeholders Crude Overhead Allocation No agreed set of activities No time recording

28. 27 New approach to Financial Schema Multi-level Activity-Based Costing Flexible Overheads Three-phase Course Lifecycle Model Based on previous works Multi-stakeholder Time Division Time recording

29. 28 Financial Schema – key “Stakeholders”

30. 29 Extend your analysis to all stakeholders including their time elements (and subjective elements) E.g. apparent cost reductions may lead to stress elsewhere Use methods of Activity Based Costing/Management in your approach to Course Life Cycle issues Even a small amount of ABC thinking can materially improve your planning of e-learning Planning is not just financial forecasting: it involves looking at non-money issues Think globally to reduce costs, even for UK propositions To produce robust RoI arguments

31. Thank you for listening I am at pbacsich@ukeu.com The JISC Costings Reports are at http://www.shu.ac.uk/cnl/ www.ukeu.com