32EDU’s perspective on the global online program management (OPM) market.
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OPM is the abbreviation for "online program managers". Online program managers are companies providing end-to-end bundles or disaggregated sets of services to colleges and universities to augment in-house capabilities, with the goal of conceiving, launching and scaling online degree and non-degree programs.. Alternate abbreviations include OPE (online program enablers, more common in the UK) and OPX (a term coined by HolonIQ to encompass the unbundling that was taking place in the market around 2020). Some providers, notably , have adopted the OPX acronym to describe their unbundled services offering - using OPX as opposed to OPM as a means of differentiating their partnership model from how many typically understand OPMs. Blackboard also says OPX stands for "online program experience" whereas when the acronym initially surfaced, the "X" in OPX was simply referencing the fact that any number of alternative letters representing various models could be plugged-in for X. In the on OPMs by academics at Penn State University, OPM partnerships are defined as "outsourcing of a suite of services that lead the external provider to participate in the management of the online program." In this regard, OPMs can be understood as BPO (business process outsourcing) companies specializing in online higher education. Historically, OPMs have been understood as companies that partner with universities to design and deliver online degree programs. This definition has since been expanded to include non-degree program offerings as well. This change largely followed the increase in online executive education offerings and the emergence of stackable credentials from the likes of Coursera and edX. These OPM companies may receive a set percentage of tuition paid for a particular program (called revenue sharing) or may provide certain services to university partners on a fee-for-service basis. Definitions of the market had to be reassessed as the services provided to universities became increasingly unbundled, and additional providers like and entered the market with massive open online courses (MOOC)-based credentials.
But what exactly does "partnering with a university to design and deliver an online program" mean?
The best tool for conceptualizing what exactly it is that OPMs do for their university partners is to utilize a tool called the from .
The framework identifies 70+ discreet functions that are involved in the process of designing and delivering an online degree or non-degree program. Note that there are some functions that are optional as opposed to required, but they still fall under the purview of OPM functions. Each discreet function represents a possible service that OPMs may provide for their university partners.
You'll notice that these functions are broken down into four main categories.
Demand & Discovery - the functions associated with the marketing and enrollment services of a particular program including market research. Learning Design - the functions associated with the instructional design of a particular program. Learner Experience (also known as Student Support) - the functions associated with the actual delivery of a particular program, and the supplementary services meant to bolster a student's experience during enrollment. Work & Lifelong Learning - the functions associated with what happens after a student completes the program (or is nearing completion) and how the program is integrated into the industry ecosystem. The additional work in defining the specific functions involved in designing and delivering online programs has resulted in an understanding that the market has many more players than previously thought. Typically, snapshots of this market have estimated the number of providers to be approximately 100. has found that this number drastically underestimates the number of providers active in the industry. Historically, analyses of the OPM market focused on those companies that provide a relatively full suite of services to universities for a significant share of the revenue derived from the programs. In the past decade there has been an increase in companies offering "unbundled" services where the company provides a smaller set of services (or one particular service) for a smaller share of the revenue, or on a fee-for-service basis.
We believe a few factors (listed below) have led to an explosion in the amount of competition in the industry, which has led to there being 250-300 companies active in the market.
The rapid expansion of online learning outside of traditional online higher education powerhouse markets like the United States, United Kingdom, and Australia. The unbundling of services leading to a massive number of opportunities for providers to find market fit resulting in an uptick of the number of companies specializing in specific functions related to online program design and delivery. The growing demand for microcredentials as universities embrace lifelong learning opening the door to several providers, like MOOC platforms, to enter the market without the added difficulty, time and expense of completing a full degree program. The significant amount of venture capital funding infused into the market leading up to, and through the first part of the pandemic lowered barriers for educational technology (edtech) companies to enter the market. This trend has since reversed.
The previous section discussed how the services offered by OPMs to their university partners fall into four buckets.
We'll now look at specific data about each of these functional buckets.
Demand and Discovery
Demand and Discovery encompasses the bulk of the marketing and recruitment functions, including market research. By most accounts, it is also the costliest bucket and, some would argue, the one for which universities need the most assistance. Along with Learning Design, this is the most common of the functions that OPMs perform for universities. In the 2019 from , the top three of sixteen different responses from universities with an OPM partner resulted in: marketing online programs - 73%, market research - 71%, and recruiting online students - 65% In the 2022 report from 2022, the conclusion remained mostly the same. Universities reported that market research, program marketing, and student recruitment were the three online student services that were most frequently outsources (after online proctoring and student authentication). Additionally, in 2020, university administrators to ask them about seeking external help in designing and delivering online programs. The survey asked about the top functional areas within their university where they have capacity challenges. The top three of nine different responses, in order, were: website optimization - 16%, digital marketing - 16%, and marketing in general - 13%.
Note this is the percentage of respondents citing each function as a critical capacity challenge.
Learning Design is largely synonymous with instructional design, though each definition has some nuance. It encompasses everything from curriculum design and optimization to content sourcing to helping maximize existing functions with the university's existing learning management system (LMS). This area has typically been the second most frequently utilized function that OPMs perform for universities but appears to be falling behind learner experience services in recent years.
From the CHLOE-4 survey:
52% of universities engaging with an OPM reported that "assisting faculty and staff in building online and/or blended programs" was a part of the arrangement, 49% reported the same about "building online courses", 49% reported the same about "assisting faculty in building online courses", and 47% reported the same about "building online and/or blended programs".
The 2020 Ruffalo Noel Levitz survey found that 11% of university administrators cited "instructional design" as critical capacity challenge. The CHLOE-7 report found that this trend has likely been exacerbated by the pandemic. Even though there has been a drastic uptick in adoption of online learning, the average university has added only one additional instructional designer compared to 2019, and the median number of instructional designers per institution is just 3. It is also important to note that this is a critical area of critique for OPM's. When disagreements arise internally at universities, much of the concern (particularly from faculty) is around control of the curriculum. One third of university administrators in the Ruffalo Noel Levitz survey found that curriculum is the most important thing for the university to maintain control over.
The CHLOE-7 survey of 2022 was worded slightly differently, but found a moderately high level of university outsourcing for course/program design and development as 27% of institutions reported outsourcing some part of this process. This is significantly lower than the outsourcing rate for program marketing (52%) and even student help desk support (47%).
Learner Experience (also known as Student Support)
Learner Experience can be summarized as all of the functions that take place between the enrollment of the student and their graduation from the online program. This encompasses everything from the management and utilization of the learning platform to assessments to retention efforts.
From the CHLOE-4 survey:
57% of universities engaging with an OPM reported that "mentoring and coaching online students" was a part of the arrangement, 57% reported the same about "online student retention", 53% reported the same about "advising online students", and 50% reported the same about "managing the LMS".
Work & Lifelong Learning
A fast-changing labor market, the lingering effects of the pandemic, and other factors are impacting the relationship between academia and the workforce. Many argue that this reckoning is long overdue, and that universities have been educating the right people with the wrong skills for decades, if not generations. Work & Lifelong Learning is the newest bucket of functions for OPMs. This bucket encompasses those functions that bridge the gap between industry and academia. It is becoming significantly more common and valuable as the public and industry stakeholders have ratcheted up their criticisms of employment outcomes and higher education.
One especially notable area of focus in this bucket of functions is education-as-a-benefit. Education-as-a-Benefit companies (such as and ) act as a matchmaker of sorts between universities with non-degree and degree programs and companies seeking a curated set of training programs to better train, retain, and/or upskill their employees. Work & lifelong learning functions remain an emerging category yet still does not have a significant share of activity in the market compared to other functions, including Education-as-a-Benefit services. This can be most easily observed via a new HolonIQ that shows that Work & Lifelong Learning is the least prioritized group of functions according to universities.
Based on a variety of sources including the CHLOE-7 survey and the Eduventures Industry Guide to Online Program Management 2022: The Evolving Market, we find that universities primarily seek assistance in Demand and Discovery, with many also opting for Learning Design and Learner Experience assistance as well. Some institutions prefer to build online courses internally, and thanks to the pandemic, many have added capabilities internally to do so (although we previously showed how most universities likely have not added enough resources for this). This brings three notable benefits to all parties:
1. Students benefit from instructor-designed courses
2. Faculty work with internal instructional designers (IDs) with whom they may have a greater comfort level
3. OPMs eliminate the oft-cited, but rarely accurate, perception that they govern course content.
Using data from the CHLOE-4 report, universities that engage with OPMs typically do so for Demand and Discovery functions, but also frequently utilize OPMs for Learner Experience and Learning Design functions as well.
There was not a parallel update available in the CHLOE-7 report.
Further from Ruffalo Noel Levitz indicates that when asked about near-term plans for potential OPM relationships, universities intend to look to OPMs primarily for marketing functions (27%), then for instructional design functions (12%) followed by looking to OPMs for the full batch of services (9%). So the most common services that OPMs perform for their university partners is not likely to change in the near future, with much of the work continuing in the demand & discovery and learning design capability buckets, but may shift towards an increased focus on Demand and Discovery and Learner Experience as many institutions used money from the CARES act to bolster internal instructional design capabilities. While we do observe a good amount of OPM partnerships in which the university is receiving learning design work from the OPM partner, in his , Swati Ramani found that there is a lack of academic research speaking to the effectiveness of partnerships for improving the learning experience of online students and that OPMs might actually be underinvesting in instructional design capabilities due to an incentive mismatch. While this research does not definitively prove this, it does speak to the perception that is held by many higher education stakeholders. Additionally, HolonIQ has recently published on university priorities in regards to these four functional buckets and how universities feel about their current capabilities. In a survey spanning 41 countries, HolonIQ found that in the online program design and delivery process, universities' highest priority is Learning Design followed by Learner Experience followed by Demand and Discovery and then finally followed by Work & Lifelong Learning. We believe this survey primarily reflects that non-American institutions perceive a higher need for assistance in Learning Design than their American counterparts. We do have some additional data regarding the specific bundle of services that OPMs are providing for their partners as well. The latest academic work on the topic by Michael Graham, in his , gives further insight into the specific bundles of services (or individual services) that are employed in these partnerships.
From Graham's data we can see that Demand and Discovery, Learning Design, and Learner Experience are all frequently a part of existing OPM relationships. Graham's data also illustrates that these services are bundled together in a variety of different ways, sometimes in a very comprehensive manner and sometimes in a very selective manner. The data shows that 33% of partnerships are for just one service, 38% of partnerships offer a small bundle of services, and 29% of relationships are for a full bundle of services. Comparing this to the results of the Ruffalo Noel Levitz data previously mentioned, it seems likely that smaller bundles of services will continue growing and becoming a larger portion of the market. This is due to the statistics that 86% of institutions that had an appetite for future OPM relationships indicated a preference for a limited scope of services while the current market shows that these limited scope arrangements account for 71% of existing relationships.
Note that while Graham's data is for relationships in the United States, we have found that in international markets, particularly those excluding the United Kingdom and Australia, full bundles of service have a higher degree of exposure in the market as well as a higher level of interest from universities - somewhat similar to the case that was observed in the United States approximately ten years ago.