The Third Wave of Corporate
and Higher Education
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John Chambers, CEO of Cisco Systems, described “e-learning as the next
killer App for the Internet.” To achieve this ambitious vision, educational
corporations and universities will need to integrate e-commerce business
models and Web components into their operations and products. They must
emulate the best practices of B-to-B ventures in the third wave of corporate
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Universities have traditionally viewed professors as self-sufficient production functions of education. Professors implicitly or explicitly assess students’ competencies, determine competency gaps, establish learning objectives, author educational materials, deliver content, assess learning, and manage the educational experience. The degree to which professors thoughtfully consider each step in the production function of education varies across individuals, so the quality of educational experiences varies greatly.
The production function of academia remains highly labor-intensive and
driven by high-priced labor, professors with doctoral degrees. It constitutes
an economical untenable production process that owes its lingering existence
to the absence of market forces. Education has remained relatively unchanged
throughout the 20th century as a protected domain accountable to boards of
regents, faculty, professional disciplines, and accreditation agencies.
University administrators have not viewed their institutions as businesses
that provide world-class service.
The Second Wave: The For-Profit Education Industry
The failure of universities to deliver world-class service opened the door for competitors and the number of firms competing in the education industry has nearly doubled. Institutions of higher education, numbering more than 4,500, now face competition from over 2,000 corporate universities and about 1,300 education corporations. Another 600 enterprise-level business software companies augment their products with educational programs, with many firms (e.g., Microsoft, Oracle, Cisco and SAP) building vast networks of educational partners.
Industry Structure. New competitors have segmented the production function of education and specialized to fulfill every step in the process. Some firms advance competency-profiling technologies. Others offer authoring tools (e.g., Toolbook and Dreamweaver) to enhance the capacity of educators to generate content quickly or with robust multimedia: yellowed lecture notes turn into PowerPoint presentations and ultimately become glitzy multimedia productions (no sarcasm intended).
Countless corporations (e.g., SmartForce and SkillSoft) author prepackaged courseware, and innumerable firms specialize in the custom instructional design solutions. Other companies specialize in electronic delivery of education through course management solutions (e.g., WBT Systems, Centrinity, WebCT) or robust software packages that combine asynchronous and synchronous technologies (e.g., Blackboard, Centra, Docent, Integrity Training, Caucus, Interwise, Mentergy, Lotus, Pathlore, and Teamscape). Still other firms offer education data management software to track students’ educational experiences (e.g., Saba and Infotec), while companies such as Sylvan Prometric, Forum, Knowledge Planet, and QuestionMark specialize in evaluating how much students have learned.
This description of the for-profit education companies oversimplifies the composition of the industry. Many firms address more than a single sequence in the production function of education and most firms would object to being placed in neat little boxes. My analysis does not include the numerous online educational providers, such as DigitalThink, e-University, Jones International University, Quisic, and Unext. I have not included major diversified corporations (e.g., Knowledge Universe), ubiquitous cyber-intermediaries (e.g., Hungry Minds, Edupoint, and TrainingNet), and third-party hosts for online educational portals (e.g., Astound, e-College, Infomania, Infocast, and Pensare).
I admire many educational corporations for delivering innovative Web-enabled technologies, written in Java, that seamlessly integrate with existing IT infrastructures (e.g., databases and legacy systems). Furthermore, firms such as Learning Bytes, Generation21, and LeadingWay have advanced the next generation of instructional technologies that combine reusable learning objects into on-demand courseware, thereby reducing intensive programming or authoring tasks.
Competitive Challenges. I must raise two concerns about the future of the education industry. First, too many courses and courseware providers exist. In 1998, the 4,500 traditional institutions of higher education offered over 25,000 distance education courses (i.e., just 5.5 offerings per institution) with tremendous future growth potential. Educational corporations have vastly increased the number and diversity of educational products in an already crowded market and the Internet, by removing geographic barriers, has made an incomprehensible number of courses available to students. Even savvy users remain ill equipped to compare online courses and curricula. An unsustainable number of courses and courseware providers exist and educational corporations cannot assume that revered universities will simply disappear.
My second concern centers on the absence of initiatives among
corporate educators to re-engineer the production function of education.
Educational corporations continue to specialize in discrete steps in an
outdated production function of education. They appear to design products in
isolation and leave corporate educators to select among an intimidating array
of stand-alone, potentially incompatible technologies. The process remains too
labor intensive, and strains the credulity and stamina of corporate educators
to select among the bewildering jumble of authoring tools, delivery platforms,
management systems, and other synchronous/asynchronous technologies. Education
corporations have implicitly added technological complexities (i.e., steep
learning curves) to an educational process that remains poorly engineered and
too labor intensive.
The Third Wave of Education
I can state with reasonable certainty that the integration of e-commerce and e-learning technologies comprises the future of the education industry, both non-profit traditional and corporate. E-commerce solutions represent the dominant trend in business, with educational technologies advancing tangentially. As a consequence, educational technologies oftentimes appear misguided (e.g., overemphasizing authoring tools and bulk-packaged courseware), as band-aids (e.g., course management tools), and as stand-alone technologies that tie corporate IT infrastructures in knots. This situation exists even though e-commerce technologies and e-learning programs adhere to the following, similar underlying premises:
Product-centric operations have given way to the delivery of user-centric, world-class services.
The Internet permits the ubiquitous presence of the corporation and traditional universities, with corporate policies, business processes, knowledge repositories, and services available anywhere, anytime, and for however long the user needs this knowledge.
Automated processes have replaced labor-intensive processes, or they soon will.
Business processes emphasize self-service technologies to empower users, potentially yielding greater satisfaction and reduced costs.
Software development has evolved into a mature engineering discipline with component-based application development. The emphasis is on combining reusable components to rapidly assemble electronic applications.
New de facto and open standards have emerged to make it possible to develop large-scale distributed computing systems with “plug and play” components. Components eliminate the need for writing extensive code (i.e., build-from-scratch) and massive re-installations, while they permit extensive customization and modification to accommodate the distinctive, changing character of businesses and industries.
Re-engineering Business and Education Processes. Perhaps the most important premise of the e-commerce revolution is that corporate executives and IT architects must redesign the complete business production function to offer total solutions to customers, employees, strategic partners, and suppliers. This is business process re-engineering (BPR) on steroids, crossing enterprise boundaries, and employing best-of-breed Web components. Executives and IT architects employ explicit methodologies for modeling business processes and developing repositories of reusable case-use solutions. [Here you seem to lose the parallel track of universities and corporations.]
I can state with reasonable certainty that in the third wave of education corporations and universities will model business processes and re-engineer education technologies to integrate with core business operations: for instance, so problems trigger educational initiatives. Educational technologies will need to conform to modular, component-based application designs consistent with best practices in the maturing software engineering discipline, and incorporate best-of-breed Web components (i.e., cutting edge digital technologies). Additionally, educational technologies will have to work seamlessly with corporate IT infrastructures (e.g., e-commerce solutions, legacy systems, and knowledge databases) to “do things that have never been possible”, such as automating learning experiences, integrating education and business processes, and designing self-service learning tools to empower students.
Typical Web components include user profile tools, authentication, authorization, content management tools, workflow tools, configuration tools, focused search engines, browsers, smart bots, collaboration tools, event notification components, transaction tools, and so forth. Furthermore, a third-party component vendor industry has emerged to speed the advancement of each of these component technologies.
Total Learning Solutions. The ultimate objectives in the education industry involve automating learning processes to eliminate costly labor-intensive activities, shifting control of education to users, designing comprehensive user solutions, and linking users to knowledge resources. Then, e-learning solutions will empower users and liberate corporate educators to focus on real-time, higher-order learning objectives that justify intensive instructor-led training. The next generation of instructional design technologies, using learning objects and configuration tools, will permit educators to custom design courseware on the fly to accommodate the real-time, critical educational needs.
I would like to offer an example of the power of incorporating core e-commerce tools in the design of educational products. The holy grail of education in the 21st century, as it has always been, involves knowing the student. User profiling tools could permit educational administrators to track students as they search for particular kinds of information, identify patterns in usage, make recommendations based on the behavior of other users, anticipate future needs, allow users to evaluate the usefulness of learning objects, and share insights concerning solutions. Automated user profiling components could permit greater access to biographic information about students than professors ever gain in traditional instructor-led classes.
Now, imagine that corporate and university educators build repositories of meta-tagged learning objects in knowledge databases, design focused search engines, and place this electronic resource on every employee or student desktop. Envision the possibility of combining workflow and e-learning tools. Suppose that corporate and university educators use event notification to send friendly e-mail messages to users to offer assistance, or to identify early warning signs of trouble (e.g., access to information on discrimination, sexual harassment, and career counseling). Imagine constructing the application to provide skill-profiling tools for users, electronic registration for classes, and asynchronous and synchronous collaboration tools (e.g., chat rooms, listserves, and Web conference rooms). Corporations could even link communication technologies to permit employees to have immediate access to professional mentors.
Next, consider using collaborative learning tools (e.g., e-groups, chat rooms, and Web-conferences) as an integral component of growth and promotion paths in firms, a model used at Buckman Labs. Corporate executives invite employees to participate in focused communities, high-level discussions, and expert teams that turn tacit knowledge into tangible products based on their ability to contribute ideas. Employees' visibility and opportunities in the corporation coincide with their talents. [do we have a parallel example for higher education?]
Then, imagine adding database management components to track frequency of use, type of use, and employee performance data, so corporate educators can read the pulse of their businesses through employees’ use of e-learning applications. They identify patterns in usage, map common growth patterns among users (i.e., as custom tailored curricula), anticipate user needs, subtly aid employee's search for knowledge, and push customized educational materials to specific users.
This combination of e-learning technologies—offered by firms such as Cisco Systems, Dell, and Sun Microsystems—comprises a total learning solution with the flexibility to accommodate diverse styles of learning. These companies use smart tools to monitor employees' patterns of usage and automatically customize learning tools to individual learning styles, while employees retain options for customizing the educational platform based on their own needs and interests.
Implications of the Third Wave
Implications exist for education providers and educational technology vendors. The opportunity exists for education corporations and universities to incorporate e-commerce business models into their own operations and emulate the best practices of B-to-B ventures. They can build extended learning communities with business partners, integrate education into core business processes, match users to knowledge resources, guide students to beneficial courses, and ultimately own the customer. Education providers then become trusted advisers, intellectual resources, and the companies you rely on for lifelong learning.
The opportunity exists for educational technology vendors to integrate Web components into their products. They face the challenge of blending information technologies with an understanding of learning and business processes. These companies will compete to resolve technological complexities and design natural learning solutions with the elusive charm of personal journals, extended car rides, and park benches to promote thinking. Competitive advantages will go vendors who make e-learning systems come alive for individuals, artfully bring together peers with related ideas, and support distributed thinking in formal teams or emergent communities.