WEEKEND READING: Should universities build or buy their online education capability?

This blog was kindly authored by Anna Wood, Pro Vice-Chancellor of Online and Lifelong Learning, University of Arts London (UAL).
The University of the Arts London (UAL) has set out an ambition in its Strategy 2022-2032 to bring a high-quality creative education to more students than ever before. It places online education within its strategic Access and Lifelong Learning Pillar, which focuses on widening participation in creative education for learners at different life stages, from diverse backgrounds, at every point in their learning journey.

Online education is a key driver of access and scale, with an aim to serve a wider range of students at a reduced overall cost of study for the student. 

Within its online education strategy, UAL has made the decision to build its provision in-house as an internal startup. The new venture operates somewhat independently but with the backing and resources of the broader institution. The idea is to combine startup agility and innovation with established resources, expertise and stability. At present, where we decide to partner, we will seek to supplement capacity, not baseline capability, with extra resources.

We have made the upfront investment by building new commercial and production teams, are on the journey to implementing new systems, and we accept that breakeven will not happen immediately. It is a focus on capability-building and offers insights into how universities might approach not just online education, but new product development more broadly. 

Understanding the Online Programme Management (OPM) partnership model 

UAL is unusual in taking the decision to build an internal start-up. Many  UK universities have chosen to partner (outsource the bulk of services needed) to launch their online education products. Between 2018 and 2024, Mosley counted that an average of nearly five new UK university-OPM partnerships were formed annually.OPM stands for Online Programme Management. These are companies that partner with universities to help them develop, launch, and manage online degree courses by taking on a full suite of services on the university’s behalf, often under a white label. 

To understand why these partnerships exist, we need to look beyond online education as a mode of study and recognise how it functions as a commercial product requiring significant upfront investment and specialised capabilities. OPMs provide comprehensive services that include market research and analytics, design and production, academic recruitment and delivery, digital marketing, student recruitment, and student support.  

The financial arrangement is typically a revenue-share agreement, which ranges depending on the services provided. At a time when the Office for Students report that 124 institutions (45 per cent) in the UK face a deficit in 2025-26, the appeal of developing new revenue streams without additional financial exposure is clear.  

OPM partnerships have benefits. They demonstrate that universities can broker innovative contracts with the private sector where they lack certain capabilities needed to compete effectively: data-driven performance marketing, speed to market, target-driven recruitment teams, sophisticated CRM systems, and support services operating beyond UK business hours. OPMs are also developing capabilities, particularly in AI, at a faster pace than might be realised in-house, and this may be something in the future that could give us pause for consideration on new initiatives, should this continue to be the case.

These benefits need to be weighed against certain longer-term disadvantages. When you outsource services, you effectively lose oversight of those areas. When marketing, recruitment and student support are outsourced, you can lose visibility of the addressable audience for your degrees and the retention concerns of your students. Is it acceptable for an organisation to not fully understand its customer base?

Online as pathfinder for broader change 

The capabilities required for online education are also those that universities need to become more student-centric and agile across all activities. In a 2025 HEPI blog, Nick Gilbert, Chief Information Officer of the London School of Economics and Political Science, stated:

We can no longer afford to simply implement new systems or processes. If our investments aren’t vital to the changes that our organisations need to make to survive and thrive now, we really must be questioning why we’re doing them.

The government’s recent Post-16 Education and Skills White Paper aims to “make lifelong learning a reality with more modular study options,” emphasising that skills are central to the government’s growth mission. Universities that have built internal capability to respond flexibly to this agenda: creating pathways between short courses and degree programmes, enabling credit transfer and supporting modular study, will be better positioned than those with arrangements optimised solely for full degree recruitment. 

UAL Online’s operational requirements have led to useful insights for the wider institution. The need for rapid course development has resulted in expedited course approval processes. Working in the digital space has required investment in UX and UI that prioritises accessibility, student navigation and high-quality learning experiences even before they have begun studying with us.  

A different way of working 

Part of why online education is often perceived differently internally is that it requires different approaches to course development and delivery. Where academics developing face-to-face courses work independently, online education typically encompasses partnerships between them and learning design teams.

The learning designer role exemplifies this by working with subject experts to structure content, design activities and determine how to deliver learning using various technologies and pedagogical approaches. During challenging moments, there can be creative tension as academics are not used to their content being challenged and learning designers could approach their feedback with a greater level of diplomacy. However, these conversations often lead to better outcomes, encouraging academics to articulate their pedagogical intentions more clearly and consider alternatives they might not have explored independently. 

Online education is predominantly asynchronous, requiring content to be fully designed before students engage with it. This differs markedly from face-to-face teaching, where academics can adapt in real-time. With multiple specialists involved – video producers, content developers, editors, project managers, visual designers – the result is a collaborative effort that arguably raises quality standards, with each specialist bringing professional standards from their field. 

What are the considerations when thinking about going it alone? 

The internal startup approach requires upfront investment and longer-term commitment that not all institutions can make, particularly those already facing significant financial pressures. 

If universities choose not to partner with an OPM then they need to tolerate an investment timeline of 3-5 years before break-even and an upfront spend that can require a 7-figure sum investment that will vary based on institutional readiness, number of courses launched and student number targets. The cost of digital marketing spend will be between 20 and 40 per cent of revenue for the first intakes. Economies of scale, lower delivery costs, and selective use of AI are what will ultimately bring universities the margin they seek.  

Online education is a rapidly evolving market and we have limited data and insight to make accurate predictions. It is advisable to hire key staff within the start-up who have previous experience, expertise and relationship-building skills to bring to bear.

Universities are also not always comfortable giving internal teams freedom to experiment with new business models or technologies. A level of resilience, even stubbornness, is needed if you want to see this through. Reworking new systems and processes is not swift and resources are always limited. Pauses may be required to accommodate other priorities. Strong, close working partnerships with stakeholders across the university are essential to progress.

We would love to hear from other universities who are embarking on this journey to share successes and challenges and co-solve common issues.

Are you ready to do this in-house? 

When considering whether your university is ready to go it alone in launching online education, you would likely need to answer ‘yes’ to the following five questions:  

1. Is there full executive support?  
2. Is launching online education a top 5 strategic priority?  
3. Is there appetite for significant financial investment? 
4. Is there a willingness to redesign traditional structures and processes?  
5. Is there capacity and capability to undertake systems development where required?  

If these things are not in place, then I would probably suggest reaching out for external support. OPM partnerships have proven valuable for many institutions and have helped expand access to online education. There are many different ways of approaching this – long terms partnerships or fee for service options are all available to the sector in unbundled ways that were not part of the offer ten years ago. 

For universities able to make this investment, building an in-house function offers something beyond new course launches: it builds the institutional ability and capacity to help navigate and succeed in an uncertain future.