Online delivery in the vocational education and training sector: Improving cost effectiveness

By Richard Curtain Research report 28 March 2002 ISBN 1 74096 034 3


The study compares the relative costs and effectiveness of online learning with traditional face to face teaching methods through six case studies. These case studies provide rich detail about the operating conditions under which different types of online delivery are likely to be cost effective.


Executive summary

Can technology improve the cost-effectiveness of vocational education and training? Is online learning able to lower costs, widen access while also lifting the quality of learning to improve the learning outcomes? For the same or lower dollar expenditure, can learning effectiveness can be increased, or more students can be taught to the same level or above for the same level of investment? (Bates 1996).

Study focus

This study compares the relative costs and effectiveness of online learning with traditional face-to-face teaching methods. It does not aim to provide a definitive answer to the question of whether online delivery is cost-effective or not. The range of different types and institutional settings in which online delivery takes place makes it impossible to offer a conclusive answer in most cases, other than it depends on how online delivery is implemented. The one exception relates to staff training for an enterprise where online delivery can involve substantial cost savings while increasing markedly numbers in training.

The case studies provide rich detail about the operating conditions under which different types of online delivery are likely to be cost-effective. In general terms, the case studies demonstrate the potential cost-effectiveness of the new interactive focus of online delivery technologies. The new emphasis on the value of interaction is in contrast to the content-heavy and often expensive delivery modes associated with earlier flexible learning approaches. The case studies demonstrate the potential of new, more flexible forms of work allocation for achieving cost-effective outcomes.

Nature of the evidence used

The study is based on six case studies of two different types of online learning. One is the mixed-mode delivery using the computer and the internet in a classroom setting. The other mode is the use of online delivery for distance education to students in remote locations. The six case studies, from three States (New South Wales, Victoria and South Australia) and a variety of institutional settings in the vocational education and training (VET) sector, offer different contexts for identifying cost-effective outcomes.

The case studies draw on information from structured questionnaires administered to course co-ordinators, teachers and students. A particular feature of the study is the measurement of learning effectiveness through the comparison of the student satisfaction ratings of different types of online learning compared with the satisfaction ratings of all technical and further education (TAFE) graduates.

Difficulties measuring costs

However, as noted by previous Australian National Training Authority (ANTA) research, assessing the relative costs of flexible learning compared with traditional face-to-face teaching is, in most cases, an extremely difficult task. In the case of large institutions, these costs cannot be easily tracked in the absence of activity-based and lifecycle accounting systems. The constraints of a limited time for each case study and the reluctance of most education and training providers to provide data they regard as confidential required the use of a simple estimation methodology. Course co-ordinators and instructors were asked to assess the cost differential for particular items compared with a traditional delivery mode. However, in one case, absolute costs are reported due to its origins as a stand-alone project.

Broad findings

Despite the limitations of the information on relative costs, a number of valuable conclusions can be drawn from the six case studies. In relation to the two types of online delivery, classroom-based, mixed-mode delivery and the distance delivery mode, two broad models of cost-effectiveness are identified. In relation to classroom-based mixed-mode delivery, where there is low interactivity and heavy reliance on content, courses tend to be high in cost compared with traditional classroom instruction and low on effectiveness in terms of student satisfaction. On the other hand, where there are high levels of interactivity using the internet and the use of pre-existing web-based resources, the costs are often lower or at least not greater than traditional classroom instruction. In the latter instances, students rate effectiveness more highly compared with conventionally taught courses.

In relation to distance delivery, the contrast is between the traditional correspondence model with its low interactivity and heavy reliance on content, and online delivery with its potential for high levels of interactivity. Evidence from one case study suggests that using online communication for distance learning to provide high levels of interactivity can cost about twice that of a low-interaction, print-based correspondence course. However, learning effectiveness ratings are better than low-interaction, traditional distance education courses and are on a par with the student satisfaction levels for classroom-based courses.

Strategies to achieve cost-effective outcomes

The case studies suggest three strategies to improve the cost-effectiveness of online delivery. One is to reduce costs (while maintaining current levels of effectiveness and volume). The second is to improve learning effectiveness (while maintaining current cost and volume levels). And the third is to increase volumes (while maintaining current levels of cost and effectiveness).

The first strategy can be applied by identifying the range of new work roles required by online delivery and assigning work on the basis of the required skills. For example, student support services for online delivery can be separated from the roles performed by instructors and offered by lower cost personnel. The case studies provide examples of how existing forms of work organisation can act as a major constraint on achieving lower costs and how, in some instances, this constraint was overcome.

In relation to improving learning effectiveness, the case studies also show that scope exists through online delivery to lift the level and quality of interaction. The case studies show a shift away from learner-content interaction. Evidence is offered of improved learning outcomes where online delivery enhances learner-instructor and learner-learner interaction. For example, one case study showed that assessment through use of an online interactive quiz greatly lifted student satisfaction ratings. Advances in computer adaptive testing where the test items change in response to the performance of the test taker offer considerable scope for improving learning effectiveness.

The third strategy of increasing the number of students while not increasing costs is illustrated by the Qantas College Online case study. Resistance from first-line instructors to releasing their staff was severely limiting the numbers available for classroom-based training. Online delivery enabled courses to be accessed by staff in a variety of locations, including at home and at times convenient to the business and to employees. The result was a major increase in the number of staff in training.

Online delivery clearly has the potential to deliver more cost-effective outcomes. Ideally, it should be possible to implement a strategy that optimally combines ways to reduce costs, improve effectiveness and, at the same time, increase student numbers. However, whether online delivery does or does not, depends on the extent of the accompanying changes in work allocation and other operating parameters. Where the institutional constraints are not addressed, the case studies suggest that online delivery is likely to remain an island of innovation in a sea of resistance.

Structure of report

This report has been organised into two parts. The first part describes the scope of the study, the methodology used and the main findings, and includes a literature review. The second part comprises the case studies.


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