Institutional Satisfaction with Online Program Management (OPM) Providers

Higher education continues to face challenges to the fundamental structure of its business model.  While there is still doubt, in some quarters, that the academy's future is in peril, there is increasing evidence disproving the skepticism as long-running institutions are regularly closing.  There is no reason to suggest that this trend is changing any time soon.  Increasing competition, such as short-term certificate programs and code academies, offers alternative credentials to the traditional two or four-year degree.  Furthermore, demographic trends in the United States suggest that this decade will experience a significant decline in the number of traditional college-age students who will attend a higher education institution.  

      

            The arrival of Covid-19 to the United States in 2020 has exacerbated uncertainty for many higher education institutions.  While enrollment at institutions that can recruit and deliver education at a distance may stabilize or perhaps even increase, those institutions that are unable to adapt to this new environment will struggle to survive.  Now, more than ever, the ability to recruit and deliver quality education at a distance is critical.  Higher education is continuing to search for new and innovative ways to increase student enrollment in this environment.

 

            New models designed to generate enrollment and create institutional sustainability have been developed because of this economic pressure.  One such model is the Online Program Manager (OPM).  Traditionally, OPMs were private companies that perform various outsourced services, primarily marketing and enrollment, in exchange for a portion of tuition revenue.  The estimated value of the OPM industry is between $2.72 billion and $8 billion.  This massive industry depends on a loosely established regulation from the federal government. A small section of a 2010 Dear Colleague letter from the Department of Education sets the framework for OPM authorization

 

In recent years, one of the most significant changes to the OPM industry has been the evolution of the industry's financing model.  New OPM companies have developed a fee-for-service model.  The demand for this new model revolves around claims that fee-for-service is more equitable to higher education institutions.    These claims have garnered support across the higher education landscape. They have helped reinforce the perception that revenue share OPMs do not act in the best interest of the higher education institutions that engage with them.  

 

            An additional development in the OPM industry has been the changing nature of the services provided.  The traditional model of OPMs only being marketing and enrollment companies has been replaced with additional services such as instructional design and coaching.  These new services are potentially increasing the institutional reliance on OPM providers.  It may also potentially affect the level of satisfaction (either positively or negatively) with the OPMs

 

The OPM industry remains closed off from scrutiny.  Although some industry leaders claim a willingness to be more transparent, there has been little activity other than self-generated accountability reports.   This leads to the continuing belief that there is little evidence of a genuine intention for industry change.  Unfortunately for the industry, this leads to suspicion about the motives of for-profit companies working with higher education institutions.  Instead of engaging in open dialog and debate, which might give these companies the benefit of the doubt when one of the infamous "OPM contracts" that has damaged a higher education institution is publicized.  The level of mistrust is growing, and this mistrust may very well lead to federal intervention, which alters the revenue business model in perpetuity.

 

In recent years, this unwillingness to engage in academic research or external scrutiny has led to increasing calls for industry reform. Federal and state regulations of OPMs may significantly affect the way that the companies conduct business.  A recent letter from Senators Elizabeth Warren and Sherrod Brown highlights the intensifying attention from a federal level.  Although there has been no public statement yet, it is logical to conclude that the election of Joseph R. Biden to the presidency of the United States will not quell the calls for more regulation.

  

            While it is important to begin to provide academic scrutiny to this industry, it is also critical to understand the impact of this multi-billion-dollar industry on higher education.  Understanding institutional satisfaction with OPMs will help to shed light on how higher education views the OPM industry as a whole.  Most of the stories in industry journals describe OPMs at an industry-wide level or possess a negative representation of the OPM industry.  The higher education institutional perspective is not generally represented.  This one-sided representation does not allow for a complete understanding of what an OPM does for (or in some cases to) an institution.   With billions of dollars being spent, there are unquestionably institutions that view OPMs in a positive light.  The question is who are the leaders and which are the institutions that view their OPM provider in a positive light. 

This presentation will discuss the survey results from November 2020 through January 21, 2021.  Included in this presentation will be the theoretical framework that guides this work, an introduction of some literature that helps to inform this research, the population that was surveyed, the methodology of data collection, results of the survey responses, and the learnings that have come from analysis of the data.  The presentation will conclude with a discussion of implications for both higher education leaders and the OPM industry as a whole and a discussion for further research that should be undertaken.

 

Relevant Literature

            While there has been very little academic study directly related to OPMs, there is subject matter that is relevant to this study.  One of the elements where OPMs are the most widely discussed is industry Journals such as The Chronicle of Higher Education and Inside Higher Ed.  These journals influence the general public's understanding of the OPM industry.  While they are not scholarly works, they do have an impact and are discussed in this presentation.  Academic literature that influences this research includes Christiansen's, Theory of Disruptive Innovation, a discussion of John Sperling and the rise and fall of the modern for-profit higher education industry, outsourcing in higher education, and, and finally, the concept and theory of satisfaction. 

Theoretical Framework

The theoretical framework that grounds this research comes from Richard Oliver's Expectation Confirmation Theory.  This theory compares the customer's pre-usage/purchase expectation versus the post-usage/purchase perception and the degree to which the product or service has met the expectation.  Higher education leaders engage OPMs with certain expectations of performance, and the degree to which those expectations are met helps shape the institutional leader's satisfaction. 

Methodology

Because this research can potentially affect every institutional type within higher education, the population sample draws responses from a broad spectrum of Carnegie Classifications.  Surveys came from institutions representing different institutional types, including:

 

• Public 2-year institutions
• Private 2-year institutions
• Public 4-year institutions
  • R1
  • Teaching
• Private 4-year institutions
  • R1
  • Teaching

 

Requests to participate in the survey went to the following institutional representatives.

 

• Chief Executive Officer/CEO           
• Chief Academic Officer/CAO                      
• Chief Financial Officer/CFO             
• Chief Operating Officer/COO                       
• Chief Information Officer/CIO                     
• Associate Academic Officer  
• Director of Educational Media
• Chief Public Relations Officer
• Associate PR/Marketing/Communications Officer
• Dean of Continuing Education
• Chief of Staff 
• Dean of Online Learning/E-Education
• Director Online E-Learning Platform
• President Chancellor Emeritus

 

There was also an open request for faculty and staff to participate in the survey.

 

Questions from the survey include both quantitative and qualitative questions.  Quantitative questions relate to the demographic information of the individual respondents, institutional demographic information, questions related to the institution's OPM contract, and many questions on how these independent variables influence satisfaction with the OPM provider. 

 

Qualitative questions contained open-ended responses designed to provide more rich detail of the individual's perception of the OPM provider.  Specifically, the questions which are designed to elicit response include:

 

• Please share what you feel the OPM does well.
• Please share what you feel the OPM does poorly.
• Please list any other thoughts you feel would benefit this study related to your OPM partnership.

In addition to the questions above, the presentation will include discussing the passion that OPMs can arouse in higher education.  Several respondents took a significant amount of time writing detailed responses to the low regard they had for an OPM partner and their hatred for these for-profit companies.  Finally, because COVID-19 is now a part of the reality of higher education, survey results related to the institution's experience with their OPM provider through the pandemic will also be discussed.    

This session will provide attendees with a greater understanding of how institutions view their OPM providers.  Any individual interested in the OPM process or, particularly, institutional leaders considering engaging an OPM should attend this session to be armed with further information on their selection process.  Selecting an OPM provider that meets your goals is essential to an institution's success.