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The Real Costs of e-Learning. What are they? How can we find out?. Professor Paul Bacsich UK eUniversities Worldwide Limited. Presentation to Venezualan Delegation,16 March 2004 . Contents. Key issues in a borderless world UK Transparency Review Activity Based Costing [CNL2]

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The real costs of e learning l.jpg

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

Contents l.jpg

  • 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

Three-phase model of course development

Planning and Development


and Evaluation


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Financial Schema - “Stakeholders”

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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

  • Decideinteractivity with the learner, the level and ways of building tutorial support into the material itselfand the links with other materials.

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Content development 2

  • Decide the formative assessment exercisesand 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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  • 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 to support from SHU and JISC

Professor Paul [email protected]