Must Read Blog March 19, 2024

Finding Your Institution’s Path Forward with Online Enablers

The next few years will be a fascinating period for the providers that fall within the “online enablers” category and for the institutions that partner with them. We expect that over 400 institutions will either initiate, renew or change partnerships, or bring capabilities in-house between 2024-2026 – 10% of the accredited institutions in the U.S.


Options for both in-house and third-party solutions are growing…

The early days of online enablement brought forth the three C’s of Capital, Competencies, and Culture – a unique set of capabilities that third-party providers were best positioned to offer. Over the past decade, however, institutions have made huge leaps in developing these internally, though their ability to access capital to develop, launch, and scale programs is still a challenge. The traditional OPM revenue share model is still meaningfully in place, though challenged by the recent contraction of large providers and regulatory threats from the Department of Education. Meanwhile, the ecosystem of fee-for-service (FFS) providers across individual parts of the student and instructional journeys is expanding exponentially. Many existing and emergent providers are embracing institutions’ desire to bring competencies in-house and are even building deliberate train-and-exit strategies.


… but the more options, the more complex the decision

This dynamic evolution in the online enablement sector means that institutions coming off existing contracts have many more options than they had in the past, including renegotiating comprehensive contracts or patching together a compilation of point-of-service providers that could lead to more control and revenue. Using partners remains – in most cases – the best option, whether it’s your existing partner or a new one. Going it alone can be challenging, especially if you are currently running programs with an existing partner. The industry has plenty of cautionary tales of significant reductions in enrollment, revenue, and operating margin as a result of exiting partnerships. The following questions may help you negotiate these decisions:

  • Firstly, how will decisions be made? By whom? And how will you weigh risk vs. reward and mission vs. margin?
  • What are your financial requirements, including the need to maximize operating revenue and the need to leverage a traditional revenue share model for capital investments?
  • If you have an existing provider, are your financial, enrollment, and student success goals being met?
  • Is your relationship healthy, including shared vision, mutual respect, and clear problem-resolution processes?
  • Do day-to-day operations run smoothly, with transparency and clear-hand offs between the provider and institutional teams?
  • If you wish to bring capabilities in-house, do your board and institutional leaders support the investments needed, and are they willing to bear the risks that come with changing key providers? For instance, would independence be worth surrendering $1M of operating margin for the institution? And how do you validate that the competitive culture (which is a key competency of enablement firms) is achievable within your institution?

Whatever the answers to these, we suggest you start early and seek input from multiple sources, including other institutions at the same decision point. If you are interested in learning more, please join us for our April 5th webinar: Couples Therapy in Online Enablement Partnerships: Helping your relationship thrive amidst sector-wide crosswinds.