Review by: Zellweger, Franziska (2004-11-11)

Referring to the lack of viable economical models for elearning, Gabriela Hoppe and Michael Breitner, both from the Institute of Information Systems Research, University of Hannover, suggest a framework for elearning business models. They conceive elearning as an ebusiness domain and emphasize the crucial role of technology in elearning systems. The major contribution of this article is the specification of the elearning business model concept and the presentation of a framework for the economical aspects of an elearning strategy.

Referring to the classic definition of Timmers and in accordance with the idea of Wirtz to combine core models from the different business disciplines, the framework consists of the following three partial models, which all contribute to the main goal of maximizing long term profit:

• Market model: The authors describe the supply and demand side of the developing elearning market. Both sides consist of multiple and heterogeneous providers and customers in educational settings across companies and public education institutions.
• Activity model: The discussion of the activity model basically contains the multitude of value generating activities an institution could engage in and the appropriate combination of these activities. In accordance with Keating, models such as full service providers, content providers, or service providers are introduced.
• Asset model: The asset model focuses on the fixed and variable costs occurring in the different stages of the “production” process. In more detail, potential revenue sources are illustrated where differences between academic and for-profit institutions need to be considered.

Writing about the sustainability of business models, the authors combine the suggested activity and revenue models. One major point is the distinction between CBT and WBT business models. Mobile and computer based learning still do not fully exploit the use of the Internet’s network capacity and therefore follow a much more traditional market logic. The authors also provide an interesting list of 12 crucial factors of sustainable business models. They particularly emphasize the importance of the consistency and integration of the business model with technical, pedagogical, organizational, and social aspects of an organization. Finally, the authors illustrate these factors by discussing the deployment of a WBT developed at the University of Hannover.

Hoppe and Breitner are taking an important role in facilitating the discussion about the “economical quality” of elearning. The suggested framework is an important contribution to framing and integrating the elements relevant for elearning business models. The authors’ approach is dominated by their perspective of information systems research, perhaps over-emphasizing the role of technology. One reason might be the fuzzy definition of a business model as the economical perspective of a strategy. A business model has to take as a starting point what Timmers calls the “potential benefits for the business actors” or simply the added value generated for customers in order to consistently and in a sustainable way define appropriate activities and revenue sources within a certain market environment.

The claim of the model being comprehensive and applicable to all types of educational organizations diminishes the value of the presented findings for public higher education since the particularities seem not to have been taken into account sufficiently. An indicator for this is the absence of any critical reflection on the potential and limitation of the highly debated application of business thinking in higher education.

Still, the framework provides a simple but very effective language for educational institutions to initiate a discussion about the enhancement of the “economical quality” of an elearning strategy. Due to the general character and the flexibility of the framework, it can be adjusted to any given educational context.