technology and standards watch day february 7 2001 the big bang diana g. oblinger, ph.d....
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Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
The Big BangThe Big Bang
Diana G. Oblinger, Ph.D.
Kenan-Flagler Business SchoolUniversity of North Carolina at Chapel Hill
Senior Fellow, EDUCAUSE Center for Applied Research
Diana G. Oblinger, Ph.D.
Kenan-Flagler Business SchoolUniversity of North Carolina at Chapel Hill
Senior Fellow, EDUCAUSE Center for Applied Research
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Only the paranoid survive….
– Andy Grove
Only the paranoid survive….
– Andy Grove
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Traditional vs. Net-economy
• Stable, predictable• Rely on geography• Protect markets• Averse to failure• Economies of scale• Positioning• Long-range planning
• Free-for-all• Movement• Cannibalize markets• Failure is expected• One-to-one• Value migration• Real-time execution
Traditional Economy Net-Economy
Hartman & Sifonis, 2000Hartman & Sifonis, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Born on the Web Companies
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
The Big Bang
• e-companies emerged in the late 1990s
• Analogous to the “big bang”
• Net-generation companies are now coalescing into distinct constellations of products and services
Eduventures, 2000Eduventures, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Categories of e-business
• e-commerce
• e-learning
• e-care
• e-procurement
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
e-commercee-commerce
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Definition of e-commerce
• Transactions involving individuals or organizations
• US students spent $700 million for online purchases in 2000
• Estimates are that student purchases will exceed $14 billion by 2002
• Transactions involving individuals or organizations
• US students spent $700 million for online purchases in 2000
• Estimates are that student purchases will exceed $14 billion by 2002
Oblinger & Katz, 2000Oblinger & Katz, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
edu.com
• Competing for student e-commerce market• Deep discounts on brand-name products for
college students– computers
– software
– banking services
– phone and Internet services
– credit cards
– textbooks
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
UVentures.com
• Universities selling intellectual property online
• Hope to supplement research funds
• New online intellectual marketplace
• Designed to connect buyers and sellers, online
• Similar to models such as Autobytel.com
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
e-learninge-learning
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Size of Education MarketSize of Education Market
The US currently spends $740 billion per year on
education...
... more than is spent on national defense
… more than the GDPs of Spain, Canada or Brazil
Moe, 1999
The US currently spends $740 billion per year on
education...
... more than is spent on national defense
… more than the GDPs of Spain, Canada or Brazil
Moe, 1999
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Worldwide Academic vs. Corporate Education Market
1997-20021997-2002
International Data Corporation, 1999International Data Corporation, 1999
19971997 19981998 19991999 20002000 20012001 20022002
Billion $Billion $
20002000
40004000
60006000
80008000
1000010000
1200012000
00
YearYear
Academic
Corporate
Academic
Corporate
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Growth of e-learning• Universities with aggressive programs are seeing
growth rates of 200-1000%• Partnerships between “non-traditional” providers and
universities are increasing• Over 5,000 competitors offer all types of e-learning;
no single competitor has more than a 5% market share
• Last year, over 100 e-learning portals entered the market
Oblinger, 2000Oblinger, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
UNext.com
• Provides online business education through Cardean
• Uses Internet technologies to create learner-centric, highly personalized and interactive environment
• Academic partners: Columbia, Chicago, Stanford, London School of Economics, Carnegie Mellon
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Hungry Minds
• Online learning portal that aggregates courseware from academic institutions and corporate training firms
• Over 37,000 online courses; more than 160,000 subscribers
• Academic partners: UC Berkeley, UCLA, Maryland, WGU, Jones International, U Mass-Lowell
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Business ModelsBusiness ModelsBusiness Model Description
e-Commerce The sale of products and services over the Web; reseller agreements
Advertising The sale of advertising space on a Web site
Seat License The licensing of content or software on a per-use basis (e.g., license an entire library of courseware)
Subscription The sale of e-Learning services via periodic payment
Pay for use The sale of specific e-Learning products and services (e.g., purchase a specific course title)
Direct Marketing/Data Collection The sale of customer lists and market data
Enabling Services The sale of e-Learning development and delivery services, such as Web hosting, performance monitoring, professional services (e.g., content customization)
Business Model Description
e-Commerce The sale of products and services over the Web; reseller agreements
Advertising The sale of advertising space on a Web site
Seat License The licensing of content or software on a per-use basis (e.g., license an entire library of courseware)
Subscription The sale of e-Learning services via periodic payment
Pay for use The sale of specific e-Learning products and services (e.g., purchase a specific course title)
Direct Marketing/Data Collection The sale of customer lists and market data
Enabling Services The sale of e-Learning development and delivery services, such as Web hosting, performance monitoring, professional services (e.g., content customization)
Source: U.S. Bancorp Piper JaffraySource: U.S. Bancorp Piper Jaffray
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Other for-profit e-learning ventures
• Quisic (University Access)
• Pensare
• Provant
• Caliber
• SmartForce
• Headlight.com
• OnlineLearning.net
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Kentucky Commonwealth Virtual University
• KCVU is a “utility company” for educational institutions
• View and understand certificate and degree opportunities
• Admissions, registration and financial aid applications online
• Online classes• Advising, bookstores, library and study groups
online
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
e-caree-care
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Definition of e-care
• Using the Web to deliver information, support, services and decision-making aids– assistance in clarifying student career or goals– enrolling employees in human resources
programs– update personal information (e.g., address)– answering Frequently Asked Questions (FAQs)
Oblinger, 2000Oblinger, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Rationale
• Most individuals ask the same questions over and over
• Question repeat rates are often 50% to 70%
• Telephone inquiry: $25 - $30
• Web inquiry: $2 to $3
Oblinger, 2000Oblinger, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Changes in Student Services
Type of serviceType of service Access methodAccess method
Automatically triggered with-out interventionby the student
ProactiveProactiveServiceService(70%)*(70%)*
Student requests for counsel/guidance or referredby a generalist
Special ServiceSpecial Service(10%)(10%)
Student accessestechnology andcompletestransactions on-line
Self ServiceSelf Service(70%)*(70%)*
General ServiceGeneral Service(20%)(20%)
Student requestspersonal assistance
PriceWaterhouseCoopers, 1999PriceWaterhouseCoopers, 1999*`Estimated 70% of all transactions could be handled through combined use of automatic service or self service.
High touchHigh touch
High techHigh tech
Help deskHelp desk
Phone bankPhone bank
KioskTouch tone
Internet/WWW EFT
Self-help center
EFTEFT EDIEDI ImagingImagingMailingsMailings
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Smarthinking.com
• Provides online, real-time academic support for students
• Online writing lab• Real-time math study sessions• Tutoring• Plans to provide
– independent study resources– learning analysis
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Tutor.com
• Leading provider of educational referral services on the Internet
• Independent tutors and instructors register on National Registery
• Virtual classroom application includes text chat and whiteboard
• Database of 13,000 tutors & educators• $1 connection fee and 10% of overall transaction
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
e-procuremente-procurement
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Definition
• Using digital technology for paperless procurement– EDI (electronic data interchange)– digitally process transactions– order management– inventory control
• Electronic payments reduce paperwork and cut costs Oblinger, 2000Oblinger, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Rationale
• Eliminate paper bills– traditional paper bill costs $0.90 in postage and
processing– online services can cut cost to $0.30 or $0.50
• Improve efficiency– reduced cycle time– faster processing– reduced error rate Oblinger, 2000Oblinger, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Commonfund Treasury
• Creates an online purchasing system
• Paperless systems reduce transaction costs– Traditional requisition costs $150 to process– e-procurement costs $10 - $15
• Efficiencies and price discounts could lead to an additional 10% savings
• U Penn, CSU Fullerton, UCLA
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
FreeMarkets.com• Creates online auction markets• Suppliers bid for clients’ business• Working with Pennsylvania state government
FreeMarkets has:– conducted 9 online auctions
– items ranged from construction to telecommunications to license plates
– $10 million in savings on procurement volume of $98 million
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Comparative Shopping
• The Internet is a perfect place to compare prices
• For example, shopping for CDs:– 5 bricks-and-mortar stores per hour– 50 online suppliers– with a shopping agent, exposure to 500
suppliersHartman & Sifonis, 2000Hartman & Sifonis, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Net-Generation CompaniesNet-Generation Companies
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Net-Generation Companies
• Online admission applications– Embark– CollegeNet– XAP
• Campus-based portals– Campus Pipeline– Jenzabar.com– Studentonline.com
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Net-Generation Companies
• Online procurement– CommerceOne
– Ariba
– FreeMarkets
• Online course delivery– WebCT
– Blackboard
– Convene
– eCollege
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Net-Generation Companies• Supplemental content providers
– PinkMonkey.com– CliffNotes.com– Thinkwell.com– InstantKnowledge.com– Versity.com
• Online libraries– Questia.com– Net.Library.com– ebrary.com
Kidwell, et al., 2000Kidwell, et al., 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Net-Generation Companies
• Online Textbook Distributors– VarsityBooks.com– Textbooks.com
• Advising and Tutoring– Smarthinking.com– Tutor.com– Degree Navigator
Kidwell, et al., 2000Kidwell, et al., 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Net-Generation Companies
• Learning portals– click2learn.com– Hungry Minds– Ziff-Davis– SmartPlanet.com– Blackboard.com
Kidwell, et al., 2000Kidwell, et al., 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
e-Business Principlese-Business Principles
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Why Use IT?
The Economist Business Unit, 1999The Economist Business Unit, 1999
Innovation Values
Innovation Values
Net-generation institutions use IT for its innovation value
Net-generation institutions use IT for its innovation value
CompetitiveAdvantage
CompetitiveAdvantage
EfficiencyEfficiency
MarketExpansion
MarketExpansion
EffectivenessEffectiveness
E-Line
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Value Chain Alternative ProvidersValue Chain Alternative Providers
CurriculumDevelopment
ContentDevelopment
Learner Acquisition & Support
Learning Delivery
Assessment &Advising
Articulation Credentialing
Faculties & Departments
Full-ServiceBroker (WGU)
SoftwareAuthoring Tools
(WebCT, eCollege.comAsymmetrix)
StudentServices
Full-ServiceBroker (WGU)
Faculties & DepartmentsColleges & Universities(central administration)
Full-Service Broker (WGU)
University Spin-Offs(OnlineLearning.net, NYU Online)
Educational Publishers
Market ResearchFirms
Software Publishers(CBT Systems, NETG)
Catalogs(SREC, CVU,
NJVU)
LearningEnvironments
(Convene, Lotus,Microsoft,
Blackboard)
Tutoring andTesting Centers(Sylvan, Kaplan
Princeton Review)
TeleconferencingCompanies(Caliber,
One-Touch)
Testing Organizations
(ETS)Online
Applications(XAP,
CollegeEdge, IBM)
Industry AssnStandards Body
(EduCause)
AccreditingAssociations &
LicensingAgencies
Training Companies
Corporate Universities
Educational Management Organizations (U of Phoenix, Open U., Harcort, UNEXT.com)
Training Companies(GP Technologies,
Knowledge Universe)
Corporate Universities
UNC and PwC, 1999
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
IBM, 1999IBM, 1999
Non-traditional Providers
Traditional Providers Value Nets
Creating a Value Web
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Internet Drives Cost Efficiencies
Direct Sales ForceDirect Sales Force $250-400$250-400
Tele CoverageTele Coverage $30-40$30-40
Tele MarketingTele Marketing $3-8$3-8
Direct MailDirect Mail $1-4$1-4
WWW $0.01-0.5$0.01-0.5
Source: Agency SurveyCost-Per-Contact for Various Technologies
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Compression
• Transaction costs are reduced
• Time and distance are squeezed out of the equation
• Costs that were assumed fixed are eliminated
Hartman & Sifonis, 2000Hartman & Sifonis, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
“Stickiness”: How to Ensure Repeat Visitors
High Quality Content 75%
Ease of Use 66%
Quick to Download 58%
Updated Frequently 54%
Cutting Edge Technology 12%
Purchasing Capabilities 11%
Customizable Content 10%
Chat and BBS 10%
Other 6%
High Quality Content 75%
Ease of Use 66%
Quick to Download 58%
Updated Frequently 54%
Cutting Edge Technology 12%
Purchasing Capabilities 11%
Customizable Content 10%
Chat and BBS 10%
Other 6%
Source: Forrester ResearchSource: Forrester Research
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Technology Enablement
• Utilize standards across the enterprise
• If you can buy it, don’t build it
• Build a technologically smart business organization
• Create a business-smart technology organization
Hartman & Sifonis, 2000Hartman & Sifonis, 2000
Hartman & Sifonis, 2000Hartman & Sifonis, 2000
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
E-business IssuesE-business Issues
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
e-Business Issues
• Viewing IT as a strategic asset• Adequate, affordable bandwidth• Skills• Consumer protection• Legal framework• Liability• Privacy• Equitable access
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
Challenges• Values / culture• Nimbleness• Leadership• Focus• Organizational structure
– matrix– partnerships
• Funding• Human resources
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
All great truths begin
as blasphemies.
– George Bernard Shaw
All great truths begin
as blasphemies.
– George Bernard Shaw
Technology and Standards Watch Day February 7 2001Technology and Standards Watch Day February 7 2001
The Big BangThe Big Bang
Diana G. Oblinger, [email protected]
Diana G. Oblinger, [email protected]