outline of the speech (For more speech info,please feel free to contact us):

Business Undertaking Model of University online course software R&D outsourcing

Michel PLAISENT, Prosper BERNARD

University of Quebec in Montreal, Canada

•    Outline of the Presentation 

1.     Introduction:  Context of change in HE

2.     The rise of e-learning as innovation

3.     Outsourcing

4.     Porter’s Model: The Industry

5.     Porter’s Model: The Strategies

6.     China’s Capable and Ready

7.     Layout of Shared Service Center

8.     Conclusion:  ACT-NEW

•    A Context for Change

•    Over the last decade, the financial performance of American colleges and universities has become a topic of general concern,

–   especially in the publicly funded sector (Conner & Rabovsky, 2011)

•    This budget cuts translate into

–   layoffs and frozen enrolment

–   frozen hiring rates,

–   reductions in faculty

–   removing the tenure system

•    Thus:  a need for change

•     Worldwide High Education in Crisis?

Other  change factors affect the system (D’Antoni, 2006, UNESCO)

•    New vision of Higher Education leading to competitive stance between universities

•    a more consumer-oriented attitude in the university

•    knowledge is seen as a product by customers

•    increased pressure to more accessible education (lifelong) (Tucker & Gentry, 2009)

•    A serious challenge to be solved  =>

•    improving quality, reducing costs  to achieve financial equilibrium

•     CAN BE VIEWED AS A GROWING MARKET for e-Learning 

•    According to a study by Gartner Ashraf (2009)

•    more than 50% of all courses could be at least hybrid

•    more than 80% could use mobile technology as a learning tool

•    Rationale for e-learning

•    in the US & Canada, many private for-profit accredited universities are offering most if not all of their classes on-line:

•    when the classes are standardized, canned

•    where the actual instructor is only “labor” that runs the machine

•    This occurs at all levels including the doctoral level

•    Ex TELUQ, Capella, Arthabaska

•    Advantages of e-learning outsourcing for universities (Piper, 2003)

Outsourcing courses development and delivery

•    can reduce costs and increase delivery speed

•    allows university to:

–   focus on what they do best:  research and advanced courses,

–   leaving common standard courses to e-learning

–   without creating permanent in-house overhead by hiring and managing additional staff 

•    Analyzing the opportunities for China Experts using Porter’s model

•    Porter's Competitive Forces model has proven its usefulness in business strategy analysis, particularly in outside-in thinking, i.e. the attractiveness (value) of an industry structure

•    This model requires and facilitates the identification of 5 fundamental competitive forces, which are described below in relation to Western universities (Callon, 2006):

•    A Role for Chinese Universities?

•    Can Chinese Universities enter the Western Industry as new competitor ? YES in some area

•    Phoenix university have lot of chinese students why not the contrary

•    Or become partners

•    China universities & enterprises

–   can also play a role in this strategic American competition by providing online course development & delivery,

–   as partners of American universities  to help them: 

•    gain competitive advantages in thyerivlatry market 

•    reduce competitive disadvantages of their rivals

•    or meet other strategic enterprise objectives

•    Chinese universities can play a role in the following competitive strategies of USA universities

•    Competitive Strategies: (1/5)
Cost Leadership

•    Chinese can help Western Universities to

–   reduce their costs

•    development costs

•    Delivery costs

–   Become a cost leader for standard courses

•    Help them keep actual customers with low-fees due to low-costs

•    Cost Leadership

•    If an American university

–   does not have the required staff and talents,

–   or needs to hire consultants or new full-time employees,

–   Or must pay courses according to collective contract

–   this may reveal themselves to be very long and costly (Tucker & Gentry, 2009)

–   outsourcing would  lower labour costs by 30-40%, (Lester, Menefee & Pestonje, 2010)

•   
a course cost 100 000$ to develop in USA and 4000$ to operate

•    Competitive Strategies (2/5)  Differentiation Strategy

•    Develop ways to differentiate a Western University’s products from its competitors

–   Ex Bilingual products (Asian languages)

–   Offering terms in mandarin for common courses

–   Can focus on particular segment or niche of market

•    Many Chinese in USA & Canada prefer study in mandarin…

•    American learning Mandarin would prefer Chinese teachers

•    Competitive Strategies (3/5)
 Innovation Strategy

Find new ways of doing business

•    Unique products or services  (doing business with China, Chinese Law system , etc

•    Some universities like Concordia (Wisconsin) offer a full MBA program in Mandarin  by e-learning

–   They need a lot of chinese resources and expertise

•    Competitive Strategies (4/5)
Growth Strategy

•    Expand Western University capacity to:

–   produce new courses faster to dominate their market

–   deliver fast a larger volume of courses

•    Thru Chinese delivery

•    Competitive strategies (5/5)  Alliance Strategy for enterprises training

•    Establish linkages and alliances

–   American and Chinese Training Enterprises 

–    American and Chinese language training schools

–   such alliances would allow the sharing of the resources, costs, infrastructures needed to deliver e-learning (Preciss Patrol, 2006)

•    Reasons for Western Universities to partnership with Chinese (Preciss Patrol, 2006)

•    IF western universities outsources to Chinese 

–   complement and strengthen them (AXG Tecnonexo, 2006)

•    HELP

–   keep up with the many demands placed on e-learning solutions for standard courses

–   Share resources, costs, infrastructure to deliver e-learning

•    Chinese competitive advantages
CBI (2005)

•    flexible labour and union rules

•    many people focusing on IT with new entrants each year

•    a good university system including top ranked universities

•    Cultural discipline and success challenging capacity

•    Key factors of success for Chinese partnership

•    Chinese universities and enterprises must prove:

–   Flexibility and specialization (AXG Tecnonexo, 2006)

–   Ability to produce good quality courses in a short period of time

•    Layout of Shared Service Center

In order to satisfy the demand, Chinese universities and enterprises must

•    Create a databases of resources

–   Domain Experts and enterprises per discipline

•    Build an advertising capacity

•    Scout universities with needs to identify potential markets 

The next step could be the elaboration of an e-learning stock exchange where both offer and demand could be matched

•    Some problems to avoid  (Payaro, 2008)

•    bureaucracy and legal issues:  most can be solved easily as Chinese has a fast track for creation of  enterprises;  one big problem is the intellectual property that is not ensured in Chinese by law.

•    communication problems because of the distance/time  between the partners

•    cultural misunderstanding during negociations (ex: meeting time and delay respects)

•    Benefits of Partnership for Chinese

•    Foreign revenues for local universities

•    opportunity to expand the global e-learning market for Chinese itself :

–   Sharing of costs when developing e-learning courses lowers risk

–   Adaptation to his own culture & language of courses developed for USA

–   Access facilitated to neighboring markets  (culture & language)

•    Conclusion

•    Chinese experts can benefit from e-learning development 

–   Will they get a part of this growing market?

•    but it depens on vigorous actions and marketing by China universities, enterprises and government.

–   To build a supply base for Chinese experts

–   To find western partner for identifying demand

–   Develop confidence with partners and win-win relation