In the early 1990s, as sales of personal computers skyrocketed and the public gained
access to the World Wide Web, educators grew enthusiastic about the potential for
online learning. Predictions of mega universities existing only online were eagerly
embraced. Some forecast that “bricks” would become obsolete.The future belonged to
“clicks.” Although those predictions were premature—the “bricks” remain—Drexel
University has shown that a combination of technology and marketing can make online
learning appealing to students and faculty and profitable for a university.
At the time of these grandiose predictions, the Sloan Foundation funded 10 universities,
including Drexel, to investigate asynchronous distance learning by developing appropriate
course material, identifying the most effective teaching methods and testing various
platforms for course delivery.The Foundation chose Drexel because of its leadership in
cutting-edge technology and ongoing research in human/computer interaction.
Because the Internet was not yet widely used, Drexel adopted Lotus Notes as the platform
for its first distance learning courses in 1995. The following year, Drexel offered
an online M.S. degree in Information Systems, marking the first time any university
offered online all the courses students needed for a degree.With continuing support
from Sloan, Drexel offered its second totally online degree in 1997, the M.S. in Library
and Information Science.
With interest in distance learning growing throughout academe, the University conducted
a study in early 1998 to determine the feasibility of delivering Drexel education
to students online on a large scale. The study concluded that the most effective
way to do this was for Drexel to create a for-profit e-learning company. However,
when Drexel began its expansion into academic medicine by taking over operations of
MCP Hahnemann University in the fall of 1998, plans for online learning were temporarily
postponed.
 In 2001, Drexel President Constantine
Papadakis proposed, and the Board of Trustees
approved, establishing a for-profit, wholly
owned subsidiary.The trustees made a $4 million
investment in the new company, Drexel
e-Learning, Inc. (DeL), with goals of delivering
a quality educational product online and earning
a profit by 2004. In September 2001, the
first two employees were hired by President
Papadakis and set up an office in the basement
of a Drexel garage.DeL’s first tasks were to build
a rigorous business plan and hire experienced
businesspeople with backgrounds in marketing
and sales, customer service, technical support,
instructional design and project management.
DeL operates as a marketing and customer service business. Its goal is to attract qualified
student candidates and assist them in the application process. The company itself
does not teach a single course, set curriculum or accept students. It is the responsibility
of the University’s Admissions Office to decide who is admitted, using the same criteria
applied to all other Drexel students. Drexel’s colleges and schools are responsible for
developing, updating and offering the necessary courses online. Presently, DeL makes
available Drexel University master’s and bachelor’s degrees and certificates in education,
engineering, information systems, clinical research, nursing, computing technology, communications and
applied technology and business, including the Drexel MBA.
 DeL is not involved with full-time, on-campus undergraduate
and graduate Drexel students who take
courses online. This is an important point,
because Drexel’s strategic plan calls for 10 percent
of course offerings to full-time students to
be online by 2010.Implementation of this
objective is in progress, facilitated by extensive
use of the WebCT course management system,
a Web-based instructional tool through which
Drexel faculty integrate technology into the
curriculum. More than 3,400 courses were
offered at Drexel using WebCT in the fall
quarter of 2004 alone.
 In 2002, DeL had a staff of ten; by 2005 it
employed 30 and had grown to the point
where it needed to move out of the garage and into more spacious accommodations in
a Drexel-owned building at 30th and Market Streets. From a handful of students enrolled
in the fall quarter in 2002, DeL enrollments have grown to 1,500 students in the winter
quarter starting in January 2005. Each student is enrolled in an average of
1.4 courses, a ratio that has been almost stable in every quarter over the
past two years. Since January 2003, DeL has offered 320 Drexel University
courses online, totaling 955 sections, including 115 courses in the fall
quarter of 2004 and the winter quarter of 2005. Online revenues grew
from $1.3 million in fiscal year 2003 to $14 million in fiscal year 2005,
and projected revenues for fiscal year 2006 are $27.5 million. By the end
of calendar year 2005, DeL projects to have completely repaid Drexel
University’s $4 million investment.
Key Factors for Success
During the past four years, DeL has identified a number of important
factors contributing to its enrollment growth and financial success.
Corporate Structure
The contractual arrangement between the University and the marketing
entity that is DeL clearly defines the roles of each, serving as a roadmap for interaction
between the parties and allowing them to move forward without continually reinventing
the wheel.The CEO of DeL reports directly to Drexel’s president. This structure
demonstrates to the University community that online learning is an integral component
of the University. On the other hand, a separate DeL board of trustees chaired by
the president of the University provides important focus on the e-learning business.
Marketing Model
DeL attracts potential students through several different methods. Its Web site at www.drexel.com received more than 750,000 visitors in fiscal year 2005, and that number is
expected to double in fiscal year 2006. Direct-to-consumer marketing is done via search
engines, direct mail, targeted e-mail appeals and online advertising at sites visited by those
interested in pursuing an online degree. DeL also provides channel marketing through its
partners in healthcare, library sciences and
corporate and professional associations.
Market Research
DeL conducts market research continuously
in order to understand the customer’s needs
today and demands tomorrow.When a new
program is suggested, the company determines
whether the need exists. Are there
enough students to make the program a success?
Is someone else offering a similar or
better program? With data to answer these
questions, informed decisions can be reached
before any investment is made.
Degree Offerings
The company offers the same degrees available on campus. DeL does not seek candidates
interested in taking one or two courses; students must be willing to make the
commitment to work toward a degree or certificate.As a leader in technology and innovation,
Drexel has built a reputation over its 114-year history, and DeL markets the
Drexel brand to online students. DeL also controls growth so that the supply of online
courses aligns with demand.
Pricing
With the exception of students referred by channel marketing partners—corporations,
healthcare organizations, professional associations—who typically receive a 10 percent
discount, online students through DeL pay the same tuition for the same courses as oncampus
students. This parity is actually an important selling point:The Drexel education
as offered through DeL carries the same quality and therefore the same value as a
Drexel education provided in a classroom.
Technology
Technology is merely an enabler for online learning. DeL’s product is based on teaching
and learning, and the quality of the student experience.The virtual environment of
DeL is platform-blind. Courses online can be supported by WebCT, Blackboard or
eCollege, with the platform transparent to DeL students. This is in stark contrast to
other e-learning organizations like UK e-University, which contracted Sun Microsystems
to develop a new virtual environment with disastrous results.
Portability
Plans are underway for DeL to pilot an expansion of its model to at least one other
university by the end of fiscal year 2006, and eventually to contract with a number of
partner universities to substantially expand online enrollment or to help them easily
enter the market for the first time. DeL will help new partner universities select and
develop online offerings from within their curricula, and market those offerings to generate
a stream of qualified applicants. Because DeL’s model relies on the same quality
education a university offers on campus (i.e., the university’s brand), the competition
among DeL-aided online programs should be no greater than the competition among
their brick-and-mortar counterparts.
Conclusion
DeL has proven that its model offers great potential, by recognizing that a university’s
most important selling point for online education is the academic quality it has developed
on-campus over the decades. The ever-changing market requires a flexible organization
that does not lose sight of the goal of the e-learning business: to provide a quality online
product while earning a profit.
For more
information,
please contact:
Arthur Zamkoff
President and CEO
Drexel e-Learning, Inc.
3001 Market Street
Philadelphia, PA 19104
215-895-0502
arthur.zamkoff@drexel.edu
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