Both business universities and shoppers like to show off their beautiful purchases. They also share a reluctance to disclose what they might have paid for some choice item.

So it is with distance education programmes. While universities may promote their state-of the-art learning systems in brochures and websites, almost all go quiet when asked what they cost.

This is understandable. Not only is it difficult to put a price on the technology, not all have lived up to its expectations. Take the e-university launched by David Blunkett, then education secretary, in 2000.

Set up for £50m, it folded last year, only six months after the launch of its first courses. In the meantime it had spent £14m on developing the virtual environment though which students would study, compared with £4.2m on worldwide sales and marketing of courses.

The virtual environment, developed by Sun Microsystems, had absorbed more than a quarter of the e-university’s expenditure. Yet, this was used by only 200 students, with the remaining 700 preferring to work through the online sites of traditional universities.

Only last month the project was declared a “disgraceful waste” of public money by the National Audit Office.

Ian Turner, of Henley Management College, which has been using e-learning technology since 1988, says that at the height of the dotcom boom, many universities, businesses and politicians made the mistake of thinking technology would change people’s behaviour.

“They focused on the supply side rather than the demand side,” he says. “We didn’t do that because we’d been working with managers for the past two decades and we knew what people would and wouldn’t do. If the people behind the e-university had tested the market first and allied themselves with private companies, they could have minimised the risk.”

Antonio Fatas, dean of the MBA Programme at Insead, says his school did experiment with distance learning courses at the height of the dotcom bubble but never as part of the MBA Programme and it has since scaled back its plans.

“We experimented with the idea of stand-alone distance learning courses but we were fairly conservative at the time,” he says. “In fact, it hasn’t grown much. The market was not as strong as thought and we also found it didn’t fit our curriculum. What we sell is very much about the experience of the classroom.” He also concedes that distance learning cannot be central to the Insead business model.

“It’s easy to produce materials, content and put it up on the internet and charge students and we do offer some modules in that way. But this is a marginal activity to what we do. If people could replicate the classroom experience on their own, in front of a computer or from a book, we’d be out of business.”

Henley, however, has long prided itself on its distance learning courses and there is a department devoted to the technology behind it. Prof Turner says the college keeps courses lively by renewing each model every four years, on top of more frequent updates, and a complete rewrite of the programmes every five to seven years. It would not disclose how much it spent but continual investment is obviously important.

Nevertheless, Prof Turner says the college has a deliberate policy not to acquire the most up-to date technology every year. “Technology shouldn’t be leading edge, or whizzy at all,” he says “because you have to satisfy a broad church.

“We have students operating in 13 different time zones, with different infrastructures and speeds. There are still areas where you can’t get broadband, even in the UK.”

But it’s also that the technology should be the background to what they are teaching rather than the subject itself. “We like it if the technology is invisible,” says Prof Turner. “We don’t want it talked about; it should be just the background to what we do.”

Jeanette Purcell, chief executive of the Association of MBAs, says some institution, such as Henley and the Open University, specialise in distance learning and most have opted to mix e-learning with classroom based training.

While 100 per cent online courses are generally inappropriate for MBAs, where people skills are important, they can be useful for other courses at the same level such as finance or accounting. “Distance-learning can be good for number-crunching,” she says.

When it comes to costs, she believes that most business universities are finding the money to invest in new technology, coy as they might seem about revealing the price-tag.

“After all they are able to charge significant fees.”

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