Moving online

This blog was kindly authored by John de Pury, Higher Education Consultant, Adviser to Higher Ed Partners UK (@johndepury).

Moving learning online offers powerful opportunities to expand access, address skills shortages, strengthen global reach and develop new revenue streams.

However, for institutions already managing structural deficits and frozen domestic fees, it is not a decision at the margins. Launching online provision at scale in today’s market typically costs £1.5–3 million upfront and £6–7 million over the first six years, with capital often not recouped for up to five years.

The recent HEPI blog on whether universities should ‘build or buy’ their online education capability may have been asking the wrong question.

This debate should not be about in versus outsourcing. It should rather be about whether universities understand the economics, competitive intensity and operational complexity of the global online market. Then, whether they have the capability to take on those challenges and have fully considered the opportunity costs of this effort and investment.

The illusion of control

Building in-house is sometimes framed as taking control. But control of what?

Online success depends on at least three distinct capabilities:

1. high-quality digital pedagogy;
2. scalable student recruitment and marketing;
3. optimisation of learner experience and retention.

Universities understandably focus on the first and underestimate the second and third.

Analysis by Neil Mosley shows that, despite years of criticism of online programme management (OPM) models, UK institutions still opt to form partnerships. The reason is less naïveté than a capability gap. Academic expertise does not automatically translate into recruitment and delivery expertise.

Quality is a governance issue, not an ownership issue

Critics of outsourcing often argue that quality and oversight suffer under partnership models.

But quality is determined by academic governance, assessment design and student support. Well-structured partnerships preserve control over curriculum and academic standards. Poorly resourced internal builds can just as easily compromise them.

The focus should therefore be on governance frameworks, transparency and accountability – not ideological preference for insourcing.

International demand is not self-realising

Meanwhile, more than 120 UK universities now offer online degrees, with new programmes launched weekly. The home market is saturated. Simply ‘going online’ no longer confers advantage.

Increasingly, online provision is seen as a route to global growth. But global demand does not convert itself.

To compete internationally, institutions must manage:

• multi-market paid search campaigns;
• cultural and linguistic localisation;
• geo-pricing and regulatory variation;
• rapid course development cycles;
• data-led conversion optimisation.

Identifying underserved populations of qualified students across the world requires specialist market intelligence and infrastructure. Institutions frequently underestimate the cost and time required to build that capability internally.

The changing economics of digital recruitment

The assumption that internalising marketing will automatically reduce long-term costs is, at best, unproven.

Ten years ago, online recruitment could lean heavily on organic search. Today it is an auction. Research from the University Professional and Continuing Education Association (UPCEA) shows that Cost Per Inquiry (CPI) in higher education marketing often averages well above $100, with cost per enrolment running into the thousands.

At the same time, this is not a stable cost environment.

• generative AI continues to reshape search behaviour;
• traditional search engine effectiveness is declining;
• global price competition is intensifying.

New in-house teams face steep learning curves, experimentation costs and early inefficiencies.

Portfolio scale and production speed matter

Breadth of portfolio is key. Competing online increasingly requires a broad suite of programmes – ASU Online offers 350 degree programmes and certificates – which implies rapid course production cycles.

That demands:

• new technologies to accelerate course build;
• shared content production costs;
• scalable instructional design teams.

We have seen UK institutions with a small online portfolio struggle to achieve marketing efficiency or brand traction.

Scale is not just desirable; it is economically protective.

What should university leaders do?

If the sector is to move beyond the build-vs-buy binary:

First, distinguish academic control from operational delivery. Ownership of academic standards does not require ownership of marketing and digital infrastructure.

Second, make decisions based onfull lifecycle financial modelling, including sensitivity analysis on cost per inquiry, conversion rates and five-year breakeven assumptions.

Third, understand what configuration of internal capability and external expertise brings sustainable growth, international reach and high-quality learner outcomes at acceptable risk?

In an increasingly complex online market, the greatest danger is not external partnership. It is underestimating what it takes to compete.