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This needs several long conversations, but I’ll touch on the high points:

-          Generally, the firms that help get you up and running require a long-term contract (think 5-10 years)

-          They provide the marketing and call center services to attract and retain students, skills that many schools would need to learn on their own (which many schools don’t have the energy/desire to do, at least initially)

-          They often provide the programmers to build your e-courses, but the school provides the course content

-          They usually incur the upfront costs, but after the courses are written, they make a ton of money

-          They often say that they’ll remove the administrative burden of managing the students in your SIS, but I haven’t many that can really do it – your student services staffs will need to support these students (My opinion: They’re your students, so get your staffs to embrace supporting your online students like they do your on-campus students)

-          They “take” 50% of the gross revenue, but lately we’ve been seeing a push to take 60% of the gross revenue.

-          They are supposed to work with your school’s branding and marketing standards, but for a some firms you have to stay on top of them

-          They throw the word “partnership” around like a Frisbee, but changing their contract wording is like throwing around a man-hole cover

-          They entangle schools in overlapping contracts that make it very difficult to terminate their contracts.

-          Their contracts often don’t have good disengagement terms so that you can actually to take over the programs at some point

-          If you move to take over, you’ll find yourself asking “whose students are they? Yours or the firm’s?”

The devil’s are in the details. Most schools just start negotiating with one firm – I’m old school, get competitive pricing and contract through an RFP shootout.

We do not provide these type of online services…. I’ve just been up close to them many times! I hope this helps….

Thanks!

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Charlie Moran
Sr. Partner & CEO

1215 Hamilton Lane, Suite 200
Naperville, IL  60540
Toll-Free (877) 212-6379 (Voice & Fax)
Website: 
www.MoranTechnology.com
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Comments

Kevin,

I appreciate your situation.  We were faced with this same question two years ago when they decided to offer our MBA online.  We never looked hard at vendors or consultants because we had the talent (graduate faculty trained in online delivery, a strong online learning support team in IT, LMS capacity, buy-in with Quality Matters,etc.) and there was not an immediate urgency.  The decision was to start with one cohort and bring two classes online using the QM rubric and now the program is fully online.  We are now looking at bringing some undergraduate courses online and thinking about contracting out for the majority of the content.  Why contract this out?   Our LMS staff is pretty well tasked already with what we support, the faculty teaching in these programs are not as well versed in online instruction as our graduate faculty are and they want these programs online for the FA13 semester.  These are all great reasons in my book to contract out the development and perhaps hosting until we can allocate the resources to bring it in-house.  

If you are interested we can set up a conference call so you and your team can talk with our online learning/LMS staff on the different models and the lessons learned from bringing our MBA program online as we did. The search for content providers for the undergraduate programs is just starting.

Take care!
Curtis

I would like to echo some of Charlie’s comments here.  We have worked with more than one vendor that has done pieces of our online programs.  Some of the things we have experienced are:

1.       The did do the front-end work.  They did want a long term contract as a result.  Often they want long term extensions as you add new programs.

2.       They do do the marketing.  This becomes an issue should you ever want to bring the work back in-house.  Think of the loss of leads and the time required to ramp up your operations.  Also, they will want to retain the best of their employees.  This means that you need to find your own good people to do the marketing, recruiting, and hand holding.

3.       The do the programming and the course management system.  You do provide the content.  Be careful of the intellectual property agreement that goes with this.  You can find yourself without the right to use the content if you decide to bring the work back in-house.

4.       The LMS often morphs into a CRM.  Then, you are confronted with essentially two systems of record.

5.       I can attest to their desire to an ever-increasing portion of the pie.

6.       Dealing with them over the marketing materials can be a struggle.

7.       The point with regard to partnership and changing contract language is very true.  Often they want changes and they try to minimize the impact.

8.       The point about creating an exit strategy on the front end is very good advice.

Charlie is right on point with everything he says and I speak as one who walked into existing contracts.

--Randy

 

Charles R. Williams
Chief Information Officer
Benedictine University
5700 College Road
Lisle, IL  60532

 

630-829-6025