Visit Modern Campus

Combining Good Educational Models with Good Business Models for CBE Programs

The EvoLLLution | Combining Good Educational Models with Good Business Models for CBE Programs
When an institution introduces a new educational model designed to create new approaches to learning for students, they also need to consider how to adapt the institutional business model to accommodate the change.

We are all aware of the fiscal constraints under which higher education institutions are expected to operate while simultaneously being asked to be more accountable for the success of their students. For the last few decades, my colleague Dennis Jones and I have continuously argued that most institutions are well advised to fundamentally change at least some of their educational delivery models instead of continuing to reduce investments in their existing traditional model to the point of dysfunction. One such alternative model is competency-based education (CBE).

When adopting a CBE methodology, most institutions keep their traditional staffing patterns in place but layer on additional support functions for students in those programs. While this usually results in better student success and hence is a good educational model, it does so by adding costs, resulting in a bad business model.

Employee compensation is by far the largest part of any institution’s costs. After all, higher education is a people-intensive industry. The challenge is how to maintain high quality as well as the quantity of the services provided while reducing the costs associated with those services. The trick is to use people in the most effective and efficient way possible. To do that leaders need to assess the activities needed to ensure student and institutional success. Those activities generally include:

  • Recruiting, enrolling and orienting students to program and institutional requirements and practices.
  • Designing curricula and individual courses/learning experiences.
  • Conducting teaching/learning experiences and assessing the extent to which students have mastered the content.
  • Providing the array of academic and student support services that ensure students make timely progress towards completion of a program of study.

Once the activities are specified, leaders must consider what resources are needed to perform each one. This is not to find the cheapest way, but rather a cheaper way to do a better job. In making decisions about what personnel to assign to activities, leaders should be asking:

1. Which activities must be performed by full-time faculty in order to ensure the integrity and quality of the program?

2. Which activities could be performed by other types of employees—part-time faculty, academic coaches, counselors/advisors, other (more advanced) students?

3. Which activities could be accomplished by acquiring services from external vendors or providers? Activities such as academic tutoring (use of help desks) or the development of assessment tools (particularly for industry-oriented vocational programs) might be considered as candidates.

To aid in the search for economically sustainable education models, NCHEMS has created a simple heuristic tool that calculates the costs associated with different staffing patterns and includes revenue assumptions as programs grow to scale with support from the Lumina Foundation. The tool was designed to assess the economic viability of alternative approaches to offering CBE programs. While the calculation routines embedded in the tool have proven useful to those who have test driven it, it could well be that its real benefit is a reminder of the degrees of freedom institutions and their academic leaders have in organizing learning experiences and in using different kinds of resources to provide those experiences. The list of activities contained in the tool also serve as reminders of the critical role played by student support services in helping students achieve academic success.

The interactive tool is an open educational resource and available from (you can find it under Cost Model on our front page). It is based on a matrix in which the columns represent activities that, in some combination, constitute a teaching/learning experience, typically a course. The rows represent the types of resources that can be deployed to carry out these activities.

The activities fall into three complementary clusters.

1. Those activities involved in designing and developing the learning experience or program of study. These activities include designing the course or program (creating syllabi), developing or selecting materials to be used, and creating (or selecting) the assessments to be employed. All of these activities are characterized by having their associated costs being a function of the course or program itself, not the number of student enrolled in the course. It costs about the same to develop a course for 20 students as for 200.

2. Activities with engaging students in the learning experience. Included in this category are activities such as academic counseling, tutoring, conducting assessments, and others designed to ensure that students successfully absorb the required material and navigate the learning experiences designed and developed for them. These activities are characterized by costs associated with numbers of students served.

3. Other program related activities such as recruiting students, orienting students to the program, assessing their capacity to successfully engage in the kinds of learning experiences being offered, career counseling, et. Costs for these activities are also associated with number of students served.

It usually takes an institution a couple of hours to populate the modeling tool with their own average salaries for different types of employees and their revenue expectations. Institutional leaders can then explore alternative models considering both costs and revenue over time.

Using this cost modeling tool gives higher education institutional leaders the ability to explore how they want to take the steps needed toward changing some of their educational services. Changing traditional practices is never easy, but starting the process with real information is always a better strategy than just guessing something will work.

A more in depth explanation of the NCHEMS cost modeling tool can be found in the July/August 2016 issue of Change: The Magazine of Higher Learning.

Author Perspective: