A Business GPS for Navigating the K-12 - Tata Interactive ...

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A Business GPS for Navigating the K-12 Market in an Uncertain Economy

Tata Interactive Learning Forum October 17, 2008

Nelson B. Heller, PhD, President

The Heller Reports, a QED Company Anne Wujcik, Managing Editor and Research Principal

The Heller Reports/QED



Overview: K-12 Funding, Drivers, Enrollment, Adoptions

Anne WujcikManaging Editor and Research Principal

The Heller Reports/QED

Education Funding Landscape

Total Taxpayer Investment in K-12 Education: $540 billion per year

– State Funding: 47.6%– Local Funding: 43.5%– Federal Funding: 8.9%

Source: National Center for Education Statistics (NCES) and National Education Association estimates, 2006-07

Education Market Drivers

2007 2008 2009

Funding Environment

Adoptions

Enrollment

Enrollment Growth

Source: NCES

Adoptions

2008 Bid Year for 2009 Purchasing• California – K-8 reading/language arts• Florida – K-12 language arts• Texas – K-5, reading/language arts• Math – ID, KT, NV, NC, SC, OR

09: AL, FL, WV• Science – MS, NV, TN

09: NC, OR, VA

State Financial Outlook

With the economic downturn now a reality state fiscal conditions are weakening

• FY 2007 Revenue Collections– 23 states - above forecast (42 states last year)

• FY 2008– 20 states face shortfalls totaling $13 billion– Ed cuts for AL, DE, FL, KT, ME, MD, NV, PA, RI, TN, VA

• FY 2009– 26 states project shortfalls totaling $40 billion in 2009– If downturn continues, 35 to 40 states will face budget

cuts in 2009• Locals hurt by property tax slowdown, rising fuel costs

Source: National Conference of State Legislatures' State Budget Update: June 2008

Federal Funding

• Operating under a continuing resolution through March 6, 2009

– Holds funding steady at FY 08 level– Possibility of using a CR for all of FY 09

• Before the current fiscal crisis– McCain favored freezing all domestic discretionary

spending, pending a review; strong emphasis on the states’ role

– Obama proposed $18 billion a year in new spending on preschool and K-12 programs and well as addressing the “underfunding” of NCLB

The Truth About the Recession



Navigating a Down Economy

Nelson B. Heller, PhDPresident

The Heller Reports, a QED Company

Insights from Previous Downturns

• Understand the unique factors

• Get ahead of the curve– Cut costs– Improve sales/marketing ROI

• Build for the future

What’s Unique?

• NCLB

• Stressed fuel and transportation budgets

• Property tax safety valve restricted

Getting Ahead of the Curve

• Objective cost cutting

• Streamline duplicative operations

• Sampling -> illegal copying?

• Communicate with your team

• Don’t cut product quality

• Improve sales/marketing ROI

Boosting Sales/Marketing ROI

• Save money on campaigns• Increase ROI for campaigns• Improve mining of customer data• Increase insight into what’s working and

what isn’t• Accelerate response to campaign results• Reduce customer irritation

Market Database Issues

• Issue: Marketing Data is in an accounting or other legacy system

• Concerns– Objectives of accounting are not the same as marketing– Interface unlikely to be marketing friendly– Likely requires technical expertise to interact with– It is almost a given a single customer can be represented by

several accounts which affects both targeting and analysis

• Solution– Need to extract and periodically update marketing data into a

separate database

The Environment


• Issue: Address data are not corrected in main system after campaigns

• Concerns– Too many undeliverables

– Moves are not caught unless new order comes (which is probably in a new record

• Solution– Use of systems such as the USPS ACS provides electronic

files of changes

– A separate marketing database might make it easier to update


• Issue: Data are not being gathered comprehensively

• Concerns– Results in a sparse data set that significantly limits the ability

to target

• Solution– It’s difficult if not impossible to go backward to remedy– Focus on a few key elements and ensure they are being

gathered fully– Expand the element list as time goes on


• Issue: Data Entry of much information is free-form

• Concerns– Errors with result in unusable and often uncorrectable

information– Fields may be used be used for “notes” not data– Entry of key elements may not be required

• Solution– Eliminate as many free form entries as possible– Lookups should be standard – Have forms guide the process as if they are a customer


• Issue: Clear definitions of key concepts and coding standards do not exist

• Concerns– Even such basic terms as customer and prospect can mean

different things to different people/groups

– This can result in erroneous analytic results, list definition

– In most cases it can not be corrected

• Solution– Don’t trust to verbal. Have written definitions and ensure all

who use the definitions are aware of and use the definitions be they in marketing, sales, accounting or IT.


• Issue: Marketing may have to request all list pulls, profiling and analysis which require technical intervention

• Concerns– Slows down definition and analysis resulting in missed

opportunities and the lack of ability to construct what-ifs

• Solution– Marketing needs a simple enough system for constructing

what-ifs and list development without technical intervention

Level the Playing Field



A Glimpse of the Next 20 Years

Tomorrow’s Big Ideas

• Digital Mobility

• Distance Learning

• Platform wars: next generation portals

• OS/Web 2.0 business models

• Energy and Climate

Digital mobility, 1989…

… and today

Kindle e-Book Reader

Kindle – Smart and Wireless

• Free EV-DO connectivity

• 1-click wireless purchasing

• 200-600 book capacity

• Newspapers, blogs, web, search

• Dictionary, notes, bookmarks, clippings, search

• Low power consumption

E-Ink/ePaper Display

Is Kindle <-> books as iPod <-> media?

• Significant but not explosive sales• Bezos keynote at Book Expo America• But it’s not (yet)…

– Color– Very interactive– …a Netbook

Distance Learning <-> Online Learning

• US K-12 market trends

• Accelerating internationally

• US K-12 acquisition flurry

• Market drivers

• Blended/Hybrid Learning

• implications

K-12 DL/OL Insight

US K-12 DL/OL

• $50 mil/yr, growing at 30%

• 42 states w significant OL pgms

• 26 state-wide/state-led VS

• 2014: 10% HS courses OL

• 2019: 50% HS courses OL

• 72% of DL districts expanding OL in coming year

Accelerating internationally

• South Korea

• European Union

• Mexico

• Singapore

• India

• China

UK-China Deal

US K-12 acquisition flurry

• GlobalScholar.com (Knowledge Universe/Ignition Partners)

• Insight Schools (Apollo Group/U of Phoenix)

• Advanced Academics (DeVry)• U of Miami HS (Kaplan) • eCollege/eClassroom (Pearson)• Penn Foster (The Wright Group)

K-12 Market drivers

Why bother?

• ADA, counter-recessionary

• Credit recovery eclipsing AP

• Legislators/public motivated

• "Real estate leverage” and scalability

• Efficiency/Effectiveness

Blended/Hybrid Learning Cinderella?

• Digital classrooms in B/M facilities

• Mainstream – not alternative -opportunity

• Flexnet, "the online education with class“ (U of Phoenix)

implications for the K-12 market

• Books digital resources

• Learning module structure

• LMS/CMS

• Not just anytime, anywhere: its any way too

• Content aggregation no longer viable business model

Hurdles

• Teachers and Unions

• Shortage of qualified instructors

• ADA funding competition

• Bandwidth

• Locally authored curricula

• Exam proctoring

Platforms: next generation portals

• Your future home

• Escalating capabilities spectrum

• Growing list of players– Veterans– Newbies

• Business implications

Chrome: blurring Web/Local boundary

Desktop Web App Shortcuts

Google Docs Spreadsheet App

Platform Capabilities Spectrum

• Single sign-on and user authentication• SaaS or local• Collaboration, communication, social

networking• Content archives, lockers, e-portfolios• Rich multimedia

Capabilities - more

• Scheduling• Courseware authoring• Assessment• Off-line functionality• Portable desktops• Students, educators, parents• API friendly• Business terms

Veteran players

• Blackboard• K12 Inc.• Desire2Learn• Angel Learning• eClassroom• LearningStation• Moodle• Sakai

Blackboard School Central

Newbies

• Follett Digital Classroom

• IQ-ity

• Agilix's GoCourse

• Etech's Studywiz Spark

• VIP Tone

• Editure's MySuite

• Drupal

Platform wars: business implications

• Compatibility– Pedagogy– Software architecture

• Business models– Mix’n’match– Platform intermediation– Support

• Auditing

OS/Web 2.0 business models

• Open Content: Failure to Thrive?

• NROC: Nat'l Repository of Online Courses (MITE)

• Open API opportunities: Facebook

Open Content: Failure to Thrive?

• Quality

• Coverage

• Standardization

• Alignment

• Marketing/sales

• Customer service, support

• Professional development

Monterey Institute for Technology and Education

National Repository of Online Courses (NROC)

• Open Educational Resource (OER)

• Courses contributed by academic institutions

• Editorial investment

• Income from Institutions

• Two parallel value propositions

NROC: Editorial Investment

• Editorial accuracy

• Learning module structure

• Content correlation and alignment

• Assessments

• Problem sets

• Teachers guides

NROC: Institutional Value Proposition

Student/Instructor proposition plus• High-quality content in full-course

sets• Maintenance• Compatibility with leading LMS/CMS

enterprise systems• Customizable delivery site• ASP/SAAS hosting

Open API opportunities

Facebook partners

• Cramster.com

• Blackboard.com

• Scholastic

• …

Facebook

Cramster.com/Fb

Blackboard.com/Fb

Bb Sync Fb User Posts

Energy and Climate: Business opportunities

“Green is the new gold”

Finding Opportunities

• Virtualization

• Cloud Computing

• Stressed School Budgets

• 21st Century Skills, STEM

• Sustainability

• HESA Federal Funding

Contact Info

Nelson B. Heller, PhDPresident, The Heller Reports, a QED Company

[email protected]

Anne WujcikManaging Editor and Research Principal

The Heller Reports/QED(773) 594-9392

[email protected]

http://HellerReports.com

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