Value Model

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Technology Affecting Educations Game
Facilitated by Albert ChiaradonnaMosaic
Partners llc www.mosaicpartners.com 610.918.9171
October 8, 2004
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Agenda - Overview

• Introduction and Setting the Stage
• Industry Trends in Education and E-learning
• Customer and Industry Value
• Findings
• Conclusions
• Business Designs for a Changing Market
• Evolution vs. Revolution
• Range of Business Models
• Key Processes and Assets
• How Can Your School Get Started - Practical
  Approach
• Methodology
• Top 10
• Questions and Conversation

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Patterns of the PastVisions of the Future
e-Learning will be the next big killer
applicationon the Internet -- its so big, its
going to makee-mail look like a rounding
error. Cisco Systems CEO, John Chambers
The message hasnt changed much, it is the
context of the message that has changed
dramatically. SEI Investments, SVP Global
Private Banking and Trust, Albert Chiaradonna
Human skills are subject to obsolescence at a
rate unprecedented in American history. Federal
Reserve Board Chairman, Alan Greenspan
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Patterns of the PastVisions of the Future

• If context is changing, howhow do you remain
  relevant?
• How do you add value?
• What process can we use to facilitate value
  migration?

• Add value
• Industry
• Position

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• Industry Trends in Education andE-learning
• Customer and Industry Value
• Findings
• Conclusions

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Industry Trends Customer and Industry Value
UnderstandWhat Customer Value
OBJECTIVE
Where is value migrating?
Examine Industry Influences
Who has power? What are the rules?
Analyze Competitive Landscape
Who is your competition? What is your position?
Identify Internal Assets
What are your core competencies?
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Industry Trends Customer Value

• Well Articulated, Yet Unmet Need
• Value Through an ExperienceNot a Product
• Content is a CommodityContext is King!
• Customization Provides Relevance for the Learner
• Technology Enables Richness and Reach for the
  Learner
• Segmentation Creates Opportunity for Focused
  Players

• Abbott Labs Director of Leadership Development
• AIG Director of Leadership Development
• AXA Financial VP of Learning and Development
• Bearing Point CLO
• Cigna Head of Corporate University
• Deloitte Director of Leadership Development
• Electronic Boutique Director of Training
• SAP Senior VP of Education
• Vanguard Dean of Company wide Schools,
  Corporate University
• Unisys Director of Corporate University

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Industry Trends Industry Influences

• Large, Growing, and Highly Fragmented Market
• Geographic Boundaries are No Longer Boundaries
• Technology has Created Greater Independence on
  the Supply Side
• Technology has Blurred the Line Between Commerce
  and Education
• Rapid Emergence of the Life Long Learner
• Less Focused on Degree and More Focused on
  Enrichment

• Business Week and Cambria Consulting
• Goldman Sachs
• IDC Industry Reports
• Training Magazine
• ThinkEquity
• WR Hambrecht
• Outsell
• Various Other Websites and Analysts Reports

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Industry Trends Competitive Landscape

• Technology has Disrupted the Education Space
  Creating a New Low Cost Group of Competitors
• Brands Need to Separate Themselves or be Pushed
  Towards Commoditization
• Except the Premium Brands
• Gap in Client-centric Academic Institutions
• Graying of the Line between Competition and
  Collaboration Enabled by Technology

• Carnegie Mellon
• Columbia
• Drexel
• Indiana
• Michigan
• Wharton
• Achieve Global
• Dale Carnegie
• Development Dimensions Intl
• Gallup Organization
• IRR Global
• Richardson Group
• The Kan Blanchard Companies
• Wilson Learning

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Industry Trends Internal Assets

• Aging Undergrad Population Demands a Redefinition
  of the Learning Experience
• Size is Less Relevant
• Migration for Tangible to Intangible Assets
• Access to Content as Opposed to Development of
  Content
• Access and Maintenance of Customer Relationship
  Along the Life Long Learning Continuum

• Right Management
• Villanova University
• VIA
• University of Michigan
• Indiana University

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• Business Designs for a Changing Market
• Evolution vs. Revolution
• Range of Business Models
• Key Processes and Assets

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Business Designs Evolution vs. Revolution
Vision
Customer Stickiness
Access to Capital
Scale Leverage
Advances in Technology
Change in Customer Priorities
Change in the Competition
Plan
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Business Designs Evolution vs. Revolution
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Business Designs Range of Business ModelsAOL
1995
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Price
Access
Value
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Business Designs Range of Business ModelsAOL
2004
46
Cable, Broadband
We live in constantly changing and intensely
competitive markets We must constantly innovate
and make tradeoffs
AOL
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Price
NetZero Erols
lt 9
Community
Access
Content
Value
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Business Designs Range of Business
ModelsClient Example
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Business Designs Range of Business
ModelsClient Example
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Business Designs From Business to Revenue Model

• Business Model
• Approach Customer centric
• Consultative and understanding (needs)
• Context (Content without Context is quickly
  becoming a commodity)
• Switching Cost (time to educate)
• Offering Focused and Flexible
• Ease of Customization (relevance vs.
  profitability)
• Cases, Simulation, and Examples must be Company
  Specific
• Focused on Solving Level Specific Business Issues
  in the Middle Market
• Dont be everything to everyone where can we
  excel and be profitable?
• Experience Business Academics
• Collaborative
• Coaching and Mentoring
• Thought Leadership
• Credibility with Leadership

• Revenue Model Pricing Model
• Design, Development and Delivery Fees
• Wont reward us much for customization!
• Be lower total delivered cost than other
  university players!
• Consulting Fees
• Competency models
• Development plans
• Coaching, Mentoring and Other Support Fees
• Articulated need to make learning extend beyond
  the classroom
• Training for the employees manager

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Business Designs Key Assets and Processes

• Sales processes and account management processes
  (one point of contact that truly understands my
  needs) to develop the right relationship with
  right levels of buyers having the right
  discussions.
• Needs assessment to drive customization
• Ego Management we want to be the customer and
  we want to be involved in the design, development
  and delivery!
• Risk Management we want to know exactly what we
  are getting because the audience isnt forgiving,
  at all!
• Integrity, trust, credibility with leadership,
  one point of contact, knowing when and when not
  to respond to opportunities. Dont try to be all
  things to all people!
• Customization at low cost!
• Frameworks
• 60 to 80 complete
• Developing a qualified pool of delivery people.
• The business academics!
• Consultative Approach to understanding and
  meeting customers needs
• Context is assumed without it you are a
  commodity!
• What should your partnering network look like
  including other training providers?
• Commercialization session?

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• How Can Your School Get Started - Practical
  Approach
• Methodology
• Top 10

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Getting Started Methodology
MARKET IMMERSION
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Getting Started Top 10 Practical Steps

• Sustainable growth is not about products!
• Value in migrating from products to solutions and
  experience!
• Solutions and experiences are customer dependent!
• Value cant be applied evenly across all
  customers!
• Value must be created for customers, business
  partners, ecosystem participants, etc.
• You cant do it all, so partner (build ecosystem)
  to create value through solutions!
• Unbundle your value!
• Understand the personal/ intimate needs of your
  customers!
• Rebundle your value!
• Invest in your intangible value (assuming your
  product is good)!
• Focus on internal branding where all employees
  can communicate (with passion) who you are, what
  you do, and how you are different!
• Think about the relationship even when closing
  on a transaction!

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• Questions and Conversation