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Technology Affecting Education’s Game

Facilitated by Albert ChiaradonnaMosaic Partners llc

www.mosaicpartners.com

610.918.9171October 8, 2004

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Agenda - Overview

• Introduction and Setting the Stage

• Industry Trends in Education and E-learning– Customer and Industry Value– Findings – Conclusions

• Business Designs for a Changing Market– Evolution vs. Revolution– Range of Business Models– Key Processes and Assets

• How Can Your School Get Started - Practical Approach– Methodology– Top 10

• Questions and Conversation

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“Human skills are subject to obsolescence at a rate unprecedented in American history.”

Federal Reserve Board Chairman, Alan Greenspan

“e-Learning will be the next big killer application

on the Internet -- it’s so big, it’s going to makee-mail look like a rounding error.”

Cisco Systems CEO, John Chambers

“The message hasn’t changed much, it is the context of the message that has changed dramatically.”

SEI Investments, SVP Global Private Banking and Trust, Albert Chiaradonna

Patterns of the Past…Visions of the Future

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If context is changing, howhow do you remain relevant?

How do you add value?

What process can we use to facilitate value migration?

• Add valueAdd value

• IndustryIndustry• PositionPosition

Patterns of the Past…Visions of the Future

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• Industry Trends in Education andE-learning– Customer and Industry Value– Findings – Conclusions

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UnderstandWhat

Customer Value

Examine Industry

Influences

Analyze Competitive Landscape

Identify Internal Assets

What are your core competencies?

Who is your competition?What is your position?

Who has power?What are the rules?

Where is value migrating?

OBJECTIVEOBJECTIVE

Industry Trends – Customer and Industry Value

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Industry Trends – Customer Value

• Well Articulated, Yet Unmet Need

• Value Through an Experience…Not a Product

• Content is a Commodity…Context is King!

– Customization Provides Relevance for the Learner

– Technology Enables Richness and Reach for the Learner

• Segmentation Creates Opportunity for Focused Players

• Abbott Labs – Director of Leadership Development

• AIG – Director of Leadership Development

• AXA Financial – VP of Learning and Development

• Bearing Point – CLO• Cigna – Head of Corporate University• Deloitte – Director of Leadership

Development• Electronic Boutique – Director of

Training• SAP – Senior VP of Education• Vanguard – Dean of Company –wide

Schools, Corporate University• Unisys – Director of Corporate

University

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Industry Trends – Industry Influences

• Large, Growing, and Highly Fragmented Market

• Geographic Boundaries are No Longer Boundaries

• Technology has Created Greater Independence on the Supply Side

• Technology has Blurred the Line Between Commerce and Education

• Rapid Emergence of the Life Long Learner

– Less Focused on Degree and More Focused on Enrichment

• Business Week and Cambria Consulting

• Goldman Sachs• IDC Industry Reports• Training Magazine• ThinkEquity• WR Hambrecht• Outsell • Various Other Websites and Analysts

Reports

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Industry Trends – Competitive Landscape

• Technology has Disrupted the Education Space – Creating a New Low Cost Group of Competitors

• Brands Need to Separate Themselves or be Pushed Towards Commoditization

– Except the Premium Brands

• Gap in Client-centric Academic Institutions

• Graying of the Line between Competition and Collaboration – Enabled by Technology

• Carnegie Mellon• Columbia • Drexel• Indiana• Michigan• Wharton • Achieve Global• Dale Carnegie• Development Dimensions Int’l• Gallup Organization• IRR Global• Richardson Group• The Kan Blanchard Companies• Wilson Learning

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Industry Trends – Internal Assets

• Aging Undergrad Population Demands a Redefinition of the Learning Experience

• Size is Less Relevant– Migration for Tangible to Intangible

Assets

• Access to Content as Opposed to Development of Content

• Access and Maintenance of Customer Relationship Along the Life Long Learning Continuum

• Right Management• Villanova University• VIA

– University of Michigan– Indiana University

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• Business Designs for a Changing Market– Evolution vs. Revolution– Range of Business Models– Key Processes and Assets

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Change in Customer Priorities

Change in the Competition

Advances in Technology

Scale & Leverage

Customer Stickiness

Accessto Capital

VisionVision

PlanPlan

Business Designs – Evolution vs. Revolution

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60s & 70s 90s 2000 +80s

Client Experience

Product Proliferation

Product Commoditization

Product Imitation

Customer Customer ValueValue

ProfitOperational EfficiencyM&AOrganic

RevenueGrowthGrowth

Business Design

Technology Utilization

Speed to MarketScale

Competitive Competitive DifferentiationDifferentiation

Business Designs – Evolution vs. Revolution

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PricePrice

ValueValue

AccessAccess

19951995$23+$23+

Business Designs – Range of Business Models…AOL

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We live in constantly We live in constantly changing and intensely changing and intensely competitive marketscompetitive markets

We must constantly innovate We must constantly innovate and make tradeoffsand make tradeoffs

PricePrice

ValueValue

CommunityCommunity

20042004

$23$23

$46$46

<< $9 $9

AccessAccess ContentContent

NetZeroErols

AOL

Cable, Broadband

Business Designs – Range of Business Models…AOL

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Business Designs – Range of Business Models…Client Example

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Business Designs – Range of Business Models…Client Example

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Business Model• Approach – Customer centric

– Consultative and understanding (needs)– Context (Content without Context is quickly

becoming a commodity)– Switching Cost (time to educate)

• Offering – Focused and Flexible– Ease of Customization (relevance vs.

profitability)– Cases, Simulation, and Examples must be

Company Specific– Focused on Solving Level Specific Business

Issues – in the Middle Market– Don’t be everything to everyone – where can

we excel and be profitable?

• Experience – Business Academics– Collaborative– Coaching and Mentoring– Thought Leadership– Credibility with Leadership

Revenue Model – Pricing Model• Design, Development and Delivery

Fees– Won’t reward us much for

customization!– Be lower total delivered cost than other

university players!

• Consulting Fees– Competency models– Development plans

• Coaching, Mentoring and Other Support Fees

– Articulated need to make learning extend beyond the classroom

• Training for the employee’s manager

Business Designs – From Business to Revenue Model

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• Sales processes and account management processes (one point of contact that truly understands my needs) to develop the right relationship with right levels of buyers – having the right discussions.

– Needs assessment to drive customization– Ego Management – we want to be the customer and we want to be involved in the design, development and

delivery!– Risk Management – we want to know exactly what we are getting because the audience isn’t forgiving, at all!– Integrity, trust, credibility with leadership, one point of contact, knowing when and when not to respond to

opportunities. Don’t try to be all things to all people!

• Customization at low cost!– Frameworks– 60 to 80% complete

• Developing a qualified pool of delivery people.– The business – academics!

• Consultative Approach to understanding and meeting customer’s needs– Context is assumed – without it you are a commodity!

• What should your partnering network look like – including other training providers?– Commercialization session?

• How are you leveraging your fan base?– Commercialization session?

Business Designs – Key Assets and Processes

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• How Can Your School Get Started - Practical Approach– Methodology– Top 10

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MARKET IMMERSION

Understand Market

Analyze IndustryForces

A Broad Array of Current & Emerging

Needs. . . .

Determine Customer

Needs

Select Opportunities

Analyze

Competitive Environment

Identify SEI Assets and Capabilities

. . . that aren’t already served well by competitors. . . .

. . . And SEI has the current or emerging

capabilities to serve .

Getting Started – Methodology

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• Sustainable growth is not about products!• Value in migrating from products to solutions and experience!• Solutions and experiences are customer dependent!• Value can’t be applied evenly across all customers!• Value must be created for customers, business partners, ecosystem participants, etc.• You can’t do it all, so partner (build ecosystem) to create value through solutions!• Unbundle your value!• Understand the personal/ intimate needs of your customers!• Rebundle your value!• Invest in your intangible value (assuming your product is good)!• Focus on internal branding where all employees can communicate (with passion)

who you are, what you do, and how you are different!• Think about the relationship – even when closing on a transaction!

Getting Started – Top 10 Practical Steps

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• Questions and Conversation