DOES OLD IVY HAVE AN E-STRATEGY?
Part 1: New customers and brand management
Copyright © 2000, Adam Corson-Finnerty
Does Old Ivy have an e-Strategy? Inquiring minds are asking. Never
heard of Old Ivy? That's understandable, since it is an amalgam of the
nation's elite research universities. Schools such as Harvard, Berkeley,
Stanford, Chicago, and Penn. Schools which not only pride themselves
upon their excellent colleges, but which also cite their research prowess,
their Nobel and MacArthur prize-winners, their top-tier professional
schools, and their access to the ears of the nation's leaders, nay,
to the ears of the *world's* leaders.
Old Ivy has been experiencing good times. Its endowment has been growing,
its alumni/ae have been increasingly generous, its applicant pool keeps
expanding, its professors are regularly pressed for their views by the
Wall Street Journal and the New York Times, and its corporate and government-financed
research dollars keep going up.
Recently, however, Old Ivy's President has been pressed by a few of
his trustees for his "e-Strategy." Having themselves recently joined
the ranks of the converted, his interlocutors seem unsure of whether
he "gets it," to use the latest e-biz buzzphrase.
From the President's point of view, Old Ivy *has* an e-strategy: to
use technology wherever it can enhance the school's educational mission.
After all, computers are everywhere in view: in the libraries, in the
lounges, in the dorms, at every faculty desk, and in its new multi-media
classrooms. The school's deans are savvy, its faculty is entrepreneurial,
and the network infrastructure is constantly being upgraded. In a phrase,
Pipes and Tools, with which smart men and smart women can construct
What else needs to be provided? Perhaps nothing. Old Ivy is allowing
a thousand flowers to bloom. Some of them may not grow, but some may
prove to be industry-leading, even world-shaking. So perhaps it would
be better to ask-aside from Pipes and Tools-does Old Ivy *need* an e-strategy?
The short answer is yes. In my neighborhood, there is a fellow who
delivers fresh produce to salad bars. He has one truck, and emblazoned
on the front and sides is this URL: www.joessalads.com. Joe has gone
to the trouble of creating a Website, and whatever happens when one
navigates to that site will be determined in part by his e-strategy,
The New York Times' Education Life supplement of November 7, 1999,
contains no less than 73 webified display advertisements for colleges
and universities ranging from Harvard and Stanford to St. George's University
in the West Indies. All of them contain URLs, just like Joe's Salads.
The question is: what happens when someone goes to one of these addresses?
Perhaps one finds nothing but "brochureware" at the site. That is,
a few pictures, a smidgen of text, and a phone number. The "strategy"
behind such a simple site is pretty basic: visitors will learn about
as much as they would from a brochure, and will hopefully call if they
want to register, apply, or get more information.
Joe has a more elaborate strategy. He has created four information
sub-directories that give prices, delivery options, menu ideas, and
business references. What's more, Joe allows a merchant to order online,
and even to pay for the order with a credit card. Joe is e-commerce
enabled, which is more than can be said for most of America's colleges
and universities, Old Ivy included.
So is *that* what e-strategy is about, getting e-commerce enabled?
Sorry. If you think *that's* what it's all about, then you don't "get
E-Commerce and All That.
There is probably no more breathless mainstream advocate for e-commerce
than Business Week Magazine. Every issue contains a cover teaser article
for e-business, much as Cosmopolitan is sure to include a cover article
on sex. Fortune and Forbes are not far behind, perhaps modestly influenced
by the fact that vast amounts of money are being spent by dot.com advertisers,
but also by the awareness that their readers are suffering from e-anxiety.
"Every businessperson I call on today is filled with greed or fear when
it comes to the Internet," asserts James Barksdale, who as CEO of Netscape
experienced both at close range.
In the pages of Business Week, there is no question about it: every
company needs an e-strategy. In fact, it may almost be too late! Try
these lines from a fictional memo by middle-management upstart Paul
Revere to corporate CEO J.R. Biggenslow:
We have to get off our butts and get wired. Not just E-mail. Not just
Web browsers or a Web site. I mean the big kahuna: electronic commerce.
Our future depends on nothing less than transforming our company into
a full-fledged E-business. Now.
Or else we're roadkill.
("What Every CEO Needs to Know About Electronic Business," a special
section in Business Week, March 22, 1999. Quote is taken from the lead
article by Robert D. Hof.)
How times change. Three years ago, most traditional business leaders
thought the Internet was a toy, and irrelevant to their industry. Two
years ago, the same people could give you cogent arguments for why the
Internet might be revolutionizing industry X, but could assure you why
it would not affect *their* industry. In 1999, everyone seems to have
woken up to the fact that their lunch, dinner, breakfast, and late-night
snack could be eaten by an Internet newbie-or a rival who is moving
fast. That was the first part of "getting it." The second part was truly
understanding why this could happen. And the third, most powerful, factor
was realizing that if their Board (and stockholders) thought they didn't
"get it," they might have to get out.
In the Gospel According to Business Week, adding a buy-online option
to a corporate Web site is not sufficient cause for sanctification.
Corporations must consider every aspect of their business, from how
they distribute goods, to how they interact with suppliers, and how
they communicate internally. The changes may be profound, and may include
the flattening of the management structure, the abandonment of lines
of business, the outsourcing of important IT functions, and even the
creation of Internet spin-offs that "cannibalize" the mother unit. This
is not just "e-commerce enabling," says Business Week, this is "E-Engineering."
("From Reengineering to E-Engineering," by Andy Reinhardt, in "What
Every CEO Needs to Know About Electronic Business," a special section
in Business Week, March 22, 1999)
Like most educational institutions, Old Ivy wants to operate in a
"businesslike" manner, and gain the efficiencies that come from professional
management practices. Therefore, there is much in the e-commerce revolution
that may be of interest to the university's administrators. To its credit,
Old Ivy recently established an electronic procurement system, and it
is looking at supplying "smartcards" to its staff. It has junked its
legacy HR software, and has purchased the hottest product from the coolest
vendor (which last year was Peoplesoft). It has even created a committee
to ponder whether tuition payments can be made online.
To reiterate, Old Ivy is already "wired," and is getting more wired
every day. Its faculty, staff, and students are increasingly "computer
literate," and are using their new skills in highly creative ways. It
is moving in its usual stately fashion into adopting certain e-commerce
applications. Does this not an e-strategy make?
Perhaps. Yet consider some questions that Ivy's President currently
There is no set formula for deciding on these matters. Old Ivy, like Yale
and Cornell and the other "brand-name" universities, must decide how it
will address each question. Thus Old Ivy needs an e-Strategy, whether
it wants one or not.
- Now that we can offer classes over the Internet, who is our customer?
- What computerized services should I outsource, what should I build,
and what should I consider selling or licensing to others for a profit?
- How strongly should I push the notion that the University owns the
copyright to online courses that have been created in partnership
with the faculty? If Old Ivy creates the courses, are there patentable
procedures being created that we should "protect"?
- Since Old Ivy has struggled long and hard to establish its top-shelf
reputation, how do I manage Ivy's "brand" in cyberspace?
WHO IS OUR CUSTOMER?
The most critical question that Old Ivy faces is: who is our customer?
Until recently, Old Ivy was crystal clear about who its customers
were: first-rate students from around the world, to continually fill
its residential undergraduate and graduate programs. The number of such
students was limited by the size of the physical plant, and by other
physical constraints, such as teacher-student ratios. In some cases,
class sizes have been adjusted to yield greater revenue, or greater
selectivity. Thus, Ivy's customer base has been highly delimited.
But in the new era, these limits are being tested. Internet-enabled
classes allow for Old Ivy to expand its offerings to the following customers:
In other words, the Internet allows for a stupendous expansion of Old
Ivy's customer base. Old Ivy could offer its courses around the globe.
And not just to the traditional undergraduate and graduate population,
but also to doctors and lawyers seeking re-certification, to Japanese
Government officials wanting to learn American management techniques,
and to French secondary school students who want to take college-level
courses online. If Ivy's president acts shrewdly, the entire university
may shift into the high-tech passing lane and Beat Harvard. Yes, Old Ivy
may become the premier global University for the twenty-first century
- Busy Executives who want "Executive Education" classes, but don't
want to travel to campus;
- College graduates who want to achieve advanced degrees online;
- Smart high school students, who would like to take college-level
- Professional School alumni, who need to take "re-certification"
courses on a regular basis;
- Undergraduate alumni, who want to take "enrichment" courses online;
- Non-alumni degree holders, who want any or all of the above;
- Non-U.S. students, government officials, and business executives,
who want any or all of the above.
BRAND-MANAGEMENT IN CYBERSPACE
The November 8, 1999 edition of the New York Times carried a story
that probably did not sit well with Old Ivy's Dean of Engineering. It
reported that M.I.T. had just closed a deal with the University of Cambridge
"to develop technologies, products and companies to improve the productivity
and competitiveness of British manufacturing industries...." Such lofty
alliances are formed all the time, but this one is unique in that the
British government is putting $108 million into the deal.
The arrangement will be given substance through exchanges of students
and faculty between the two institutions, and through the creation of
"virtual classrooms that span the Atlantic Ocean."
Virtual classrooms; Big Deal. Old Ivy could have constructed those
in a heartbeat. And Ivy's engineers are pretty savvy, and entrepreneurial,
and willing to travel. However, Ivy doesn't have M.I.T.'s "brand." As
the Times went on to state, no doubt drawing from M.I.T.'s press release:
M.I.T. has extensive experience working with profit-making companies
to develop new methods of engineering and manufacturing, and the university's
faculty members, students and alumni have had a hand in the founding
of more than 4,000 companies... [which] in 1994 alone generated $232
billion in sales around the world.
("U of Cambridge and M.I.T in Joint Research Venture," by Edward Wyatt
in the New York Times, November 8, 1999.)
Thus are great reputations underscored. "We're seeing the emergence
of a world market for name-brand education," comments Robert M. Zemsky,
Director of the Institute for Research in Higher Education, in the same
When administrators of top-tier research universities get together,
they sometimes like to scare each other by raising the specter of the
University of Phoenix. This for-profit university offers courses off-line
and online, for a much lower fee, and at convenient times for working
people and at-home parents. The University of Phoenix currently enrolls
over 60,000 students-10,000 of whom are taking online courses-and runs
classes at shopping malls and office buildings in 15 states, Canada,
and Puerto Rico.
(Source: "U. of Phoenix Reports 22% Rise in Enrollment," in the Chronicle
of Higher Education, October 29, 1999.)
But Phoenix doesn't really scare Ivy administrators. What scares them
most is--each other. Phoenix is not really competing for the Ivies'
traditional customer base. It is selling "down-market," to use a phrase
from Harvard's Business School dean. That is to say, not to the intellectual
and corporate elite.
Phoenix is not going to eat Harvard's lunch. Harvard is not interested
in a slice of pizza and a Coke. Harvard likes chateaubriand and a good
burgundy. But so does Columbia. And Stanford, and Michigan, and Duke.
*They* want to sell to Harvard's market, and they *especially* want
to sell to the global market, where even Harvard has to hustle-at least
a little-for students.
B-SCHOOLS LEAD THE WAY
The best preview of what might happen should the "Ivies" start to
really hustle can be found by studying their business schools.
When I listed Old Ivy's potential new customers, astute readers may
have already recognized that elite universities are already extending
themselves to these audiences. In some cases, the efforts are tentative
and experimental, in other cases a greater commitment is being made.
For elite business schools, the new customer segment is mid-level
and top-level corporate managers, based anywhere in the world. In the
"old days," B-schools competed to lure such lucrative students to their
campuses. Occasionally, a team would hold an off-site "executive education"
session to gather up regional customers. But the Internet allows for
a dramatic shift-a shift to hyper-drive-and Columbia and Duke appear
to be the first runners off the starting blocks.
The B-School Internet race is well described in a remarkable cover
story by The Industry Standard, a magazine that follows "The Internet
Economy." Entitled "Ivy Online," the article begins with a dramatic
surprise announcement by Meyer Feldberg, "The hard-driving dean of Columbia
University's business school,"
...Columbia students and faculty learned ... that the 245-year-old
institution had become a net player. Columbia agreed to license its
name and contribute business courses to Knowledge University, now an
independent company named UNext.com. In return, Columbia would get a
piece of the action-in this case, shares in a potentially lucrative
initial public offering....
(Source: "Ivy Online," in The Industry Standard, November 1, 1999,
Unext.com is minority-controlled by a conglomerate called Knowledge
Universe, the brainchild of former financier Michael Milken. Milken's
partners include his brother Lowell, and Oracle CEO Larry Ellison. A
1998 profile by Fortune Magazine noted Milken's first career as "the
junk-bond king," and his post-prison career as a philanthropist. "Now
get ready for Mike Milken 3.0, a fusion of the other two, at once troubled
by the woeful state of American education and excited by the money to
be made teaching kids-and business people-what they need to know for
(Source: "Lifelong Learning Spells Earnings," by Justin Martin, Fortune
Magazine, July 6, 1998.)
Milken and his partners see "education" as one enormous market, whether
it is pre-school, high school, college, post-baccalaureate, or Elderhostel.
A market measured as $665 billion yearly by Fortune in 1998, and "more
than is spent on national defense."
In order to move into corporate education in a big way, KU set aside
$100 million and went shopping for partners. Columbia's Dean Feldberg
negotiated what sounds like a terrific deal. As detailed in The Industry
Standard, Columbia retains control over how its name is used by UNext.com.
It also can veto partnerships with other universities. And it is guaranteed
at least $20 million in royalties over the first five years, plus it
has stock and stock options. Finally, Columbia has been offered a seat
on the board of UNext.
With Columbia on board, KU quickly recruited several other name-brand
schools. To whit, the University of Chicago, Stanford, the London School
of Economics, and Carnegie-Mellon University.
Having been aced out by Columbia, Harvard's Business School and Penn's
Wharton School have decided to forego Internet competition and cede
the ground to their New York rival. Not.
Wharton and HBS were among the first schools on Milken's shopping
trip. They both declined, motivated by the desire to have more control
over their digital fate. As a stopgap measure, both schools signed non-exclusive
course marketing deals with a rival Internet company, called Pensare.
(Pensare is ambitious in its own right, and scored a first round victory
by teaming up with Duke University to offer a complete online MBA program.
If there was any doubt about Wharton's intentions, such doubts will
have been erased by the appointment of its new dean. The 41 year old
Patrick Harker was picked from a field of 200. One of his main qualifications
was that he had overseen the creation of Wharton's E-Commerce major,
as well as the expansion of its distance learning programs. In announcing
his appointment, Penn's President, Judith Rodin, made clear her own
determination to move into cyberspace in a big way: "Pat has been one
of the major advocates for...how [Wharton] will own the technology space
and own the global environment."
And Dean Harker had plenty to say about his plans:
"What we're talking about is not cheap, but I don't think we have
a choice. The game we are playing right now is a high-stakes game. It's
the future of education. ...It's a three- or four-horse race [meaning
the other top B-Schools]. We've got to break out of that pack right
now. I wouldn't have taken the job if I didn't think I could."
(The Daily Pennsylvanian, February 9, 2000)
Harvard clearly thinks it can take a more leisurely "Nordstrom's"
approach to coming on line. Sit back, watch what the others do, and
then move in bigtime. Says Jon Winder, a Harvard Business School VP,
"When you spend 350 years building what is a worldwide recognition factor,
as Harvard has done, it isn't something to be given out lightly." The
HBS Dean, Kim Clark directed the school to launch one of its famous
Case Studies to consider what it should do. "People worried about the
brand, the diversion of resources, whether this would take the school
down-market, whether we would lose focus. Then people recognized that
this is a very powerful technology and a good opportunity." (Translation,
HBS has every intention of jumping into the ring.)
The Harvard Case Study, by the way, is considered confidential and
is not available to the public. After all, does Macys tell Gimbels?
"Ivy Online," is valuable reading for anyone who wants to probe the
perils, promises and pitfalls of an e-Strategy for elite institutions.
To its credit, the article covers some of the serious issues that arise
from such deals: If Columbia accepts its seat on UNext, could its "Board"
responsibilities conflict with its duties to its students? Should Dean
Feldberg have negotiated this deal without consulting his faculty, as
apparently he did? Should B-Schools develop and market their own courses
directly, even if the per-course cost may be $1 million? If faculty
develop a course through a partnership with a company like UNext, who
has the copyright and who gets the royalties? (Not the faculty, says
Columbia's Feldberg, they will get additional compensation or time off.)
One cannot help but raise an additional question: Are the elite B-Schools
hitching a ride on the back of a tiger? UNext has already created a
marketable name for itself: Cardean University. Cardean; it sounds sort
of tweedy and upscale, rather like a new scent from Ralph Lauren. Cardean,
we are told, plans to offer its own MBA degree down the line. Might
this be a new Higher Ed mega-brand in the making?
TAKING THE PLUNGE
Singling out the B-Schools may be somewhat misleading. In terms of
sheer numbers, Business ranks a clear second in cyberspace to the Humanities.
A massive survey by the U.S. Department of Education found that 1,680
institutions offered approximately 54,000 Internet-based courses in
1998, and the greatest number of courses were in English, the humanities,
and the social and behavioral sciences. Business and management were
next, with 55 per cent. Furthermore, public institutions in higher education
were far ahead of private institutions in their degree of "wired" instruction.
A full 79% of public four-year institutions offered online courses,
versus only 22% of private four-year schools.
("Survey Finds 72% Rise in Number of Distance-Education Programs,"
by Dan Carnevale in the Chronicle of Higher Education. January 7, 2000.)
One could spend a significant amount of time probing more deeply into
these figures, and the differences between "public" and "private" ambitions.
We will restrain ourselves, except to note that the publics are getting
far more experience with what works and does not work in cyberspace,
and that from Old Ivy's perspective, rivals such as the University of
California and the University of Michigan should not be ignored.
Let us imagine that Old Ivy has decided that it does not intend to
sit on the sidelines and watch Columbia and Duke and Berkeley aggregate
the best online students for themselves. Old Ivy decides to "take the
plunge," and marshal a major foray into this brave new world.
Old Ivy will immediately confront a vast number of small and large
decisions that have to be made:
And so on. No wonder that Old Ivy's President often considers going back
to the classroom.
- How much should we invest in this initiative, and should we expect
it to be a money-maker or a money-loser?
- Who can lead this effort from within the current community?
- What talent and expertise do we need to recruit from outside Old
- Is our IT Department up to the challenge? Can it be scaled up for
- If not, what IT functions should we consider outsourcing, and which
ones are part of the "core competence" of the university, and therefore
should be preserved even if they are more costly than outsourcing?
- What partnerships should we form with "sister" institutions, and
what partnerships with commercial companies?
- Can our Intellectual Property office handle the flood of copyrightable
and patentable ideas that will be generated by this venture?
- Will the faculty, who are used to the comforts and constraints of
the current model, balk at this major change in how we deliver educational
- How do we promote our "brand" in cyberspace, and what are our major
"sticky portals."? (More on this below.)
- Should our Alumni Programs Office be completely re-thought? After
all, in the new era, our graduates are our "customer base," and the
best source of repeat business.
Having considered the possibilities, and weighed the gains and losses,
Old Ivy might very well decide not to dive into a full-tilt competition
for online students with Columbia, Penn, and Stanford. And that would
also be a legitimate e-Strategy: Stand Pat.
Old Ivy's reputation has not been built upon selling more and more
widgets every quarter. And even though it sometimes sells services,
it is not a service business (like, say, EDS or Razorfish.com). Old
Ivy's definition of "customer" is rather different than that of most
corporations, and it is not at all clear that Old Ivy wants *more* customers.
It may simply want to continue getting the *right* number of the *right*
customers, thus perpetuating a "virtuous circle" of customers who become
leaders, and leaders who become customers-and donors-and friends-in-high-places.
The nation's elite universities have long had the option to franchise
or "satellite" their businesses, yet apart from a few art programs and
study-abroad centers, they have resisted this dilution of their brand.
No doubt there were strong emotional reasons for retaining one operation:
would Princeton Men happily go off to a reunion at the Akron, Ohio satellite
Furthermore, the elite universities are still money-losing propositions.
No matter how large their endowments, they always manage to overspend
the income, and their physical plants are ivy-encrusted monetary sinkholes.
More campuses would simply mean more deficits.
As for aggressive competition in cyberspace-that will be very expensive.
Any of the Ivies, Harvard included, could end up overextending itself,
wasting a lot of money, placing faculty in an uproar, and watching its
elite status erode as its "student" population mushrooms and its IT
structure collapses in upon itself.
Therefore, it might be very cunning to let the dot-coms take the risk.
And there is plenty of risk. For instance, most of the commercial higher
education companies saw their stock drop in 1999. Companies like Apollo,
Argosy, Computer Learning Centers, and Sylvan. Some were down almost
80% from their trading high point. (CHRE, January 7, 2000)
Knowledge Universe, and its UNext spin-off, may not be tigers at all,
only paper tigers, blown out of proportion by the current Internet mania.
Sure, they might get a Big Win, but they are more likely to chalk up
a Big Loss.
So there. If Old Ivy's President needs a well-thought-through rationale
for inaction, this may be just the ticket. Experiment a little here,
try a class or two online there, and don't risk any sticking out of
the neck. Once the Internet Bubble bursts, and all the dot.com funny
money dries up, the trustees will calm down and realize that "the Halls
of Ivy" are still at the center of the known universe.
A word about the role of the digital library
in Old Ivy's E-Strategy
END OF PART 1
Having started this exploration, I quickly realized that the issue
of university e-Strategy leads to *many* interesting questions. Far
beyond who-is-our-customer, brand-management, and the library. So, I
have decided to keep going. Initially for my own edification, but eventually
to share with others. If you would be interested in seeing Old Ivy,
Parts 2, 3 and X, please send me an email to that effect. I am thinking
of "open sourcing" this discussion. That is, collecting interesting
comments and including them (with attribution) in further iterations.
So, lengthy comments and criticisms are invited. Please indicate whether
your comments can be added to future rounds, or not. If you don't indicate,
I will check back with you. Included below is a teaser for Old Ivy,
Part 2. A teaser because I am still working on it. Adam Corson-Finnerty
DOES OLD IVY HAVE AN E-STRATEGY?
Part 2: Open
Old Ivy's President now has two clear options for an e-Strategy: (1)
Steal a page from Dean Feldberg of Columbia and start making deals right
and left. Or, (2) Stand Pat, with minor nods to experimentation, and
wait for Columbia and Duke to bomb out; which, mayhap, they will. This
leaves only the minor problem of dealing with OPEN. OPEN is a recently
formed faculty group that is pressing for an e-Strategy of a very different
sort. "OPEN" stands for "Organized Professors for an Enlightened Network,"
which was the best acronym anyone could think of at their founding lunch
at the Faculty Inn. OPEN argues that Old Ivy is not a dot.com and that
"the bottom line" is not its bottom line. They want Old Ivy to remember
that it is a "dot.edu," and its ultimate goal is nothing short of the
preservation and continual renewal of human society. The group maintains
that the University, joined by dozens of other great universities, should
be striving to create a global information commons, on a vast scale,
"in which the citizens of the world can wander, learn, and delight."
Cleverly, they advocate an "E-Strategy" for Old Ivy, with the "E" standing
for Education. This, they claim, can be forwarded through three simple
tactics: --First, by supporting the creation of a "global information
commons," to which creators of new knowledge can freely contribute,
and from which they can freely take. --Second, by building and maintaining
a first-rate academic IT structure, so that Old Ivy can make original
contributions not only to the content but also to the underlying structure
of the global information commons; --Third, by tilting in favor of the
"open-source movement," as a matter of academic policy and academic
integrity. OPEN presents an acute problem for Old Ivy's President. But
not a managerial problem. From a managerial point of view, it would
be easy to deal with a gadfly faculty group like OPEN. All one has to
do is form a committee, give it a vague mandate and no deadlines, pick
a weak chairperson, and let everyone talk themselves to death. That
is not the problem. The problem is that the President *agrees* with
OPEN. (To be continued)
Adam Corson-Finnerty is Director of Development for
the Library of the University of Pennsylvania. He is the co-author of
Fundraising and Friend-Raising on the Web (ALA Editions, 1998). For
other articles by Adam Corson-Finnerty, see the Online Fundraising Resource
Center website (/musings/index.html). Does
Old Ivy Have an e-Strategy, Parts 1 & 2 are copyrighted by the author,
February, 2000 The opinions expressed are those of the author. Adam
Corson-Finnerty firstname.lastname@example.org 215-635-4084 PERMISSION IS GRANTED
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