E-Commerce in Education Term Paper 5 pages

E-Commerce in Education

With rapid technological advancement in the world, no sector of economy can any longer afford to remain loyal to traditional practices and old conventional strategies. The changes adopted by individual sectors and industries can have a strong bearing on the overall structure of the economy and on the way we previously perceived things (Clemons et al. 2001). The one sector that has been slow to adopt technological change in the true sense is the education sector which even if non-profit in nature makes substantial contributions to the annual GDP. We must understand that education sector was only slow in adopting electronic commerce opportunities while it swiftly embraced technology for on-campus instruction. Let us know discuss this topic in detail and see how e-commerce has finally managed to find its way into the education sector.

The gradual yet successful entry of e-commerce in education is the result of rapid changes that electronic commerce has brought about in the way we do business. Educational institutions also run on the same business principles that corporate sector follows i.e. maximization of profits while maintaining quality. In today’s education environment, quality is given utmost importance by large well-known universities while there are some colleges and higher education institutions that exist simply to make money while quality is given low priority. In both cases however, money is important and maximization of profits is important and for this reason most educational institutions are now looking towards e-commerce to increase profits while at the same time offer convenience to students worldwide.

Colleges and universities have come to realize that by integrating e-commerce facilities in education, they can offer existing and potential students a more convenient way of enrolling and receiving instruction. Now college catalogues, application forms and almost every kind of pre-admission information is available online which can be accessed at a certain price. For example, filling out online applications are not free of cost, sending an online application costs anywhere between $50-$75. But since more students have access to online applications than they have to offline brochures, a wider potential student body can access online applications and this results in massive revenues since only a small percentage of students finally make it to the university of their choice.

The sudden rise in the number of higher education institutions opting for a web presence for both admission and instruction purposes is probably the result of a study published by USA today in 1999. The headline of this study read, “Failure to tangle with Web may Jeopardize CEOs” and went into the details of how Internet is taking over our lives and those who fail to incorporate this technology will be left behind in the business race. Suddenly it became clearer that Internet and related technologies had an extremely profound impact on our lives and the way we previously did business. It didn’t take long for universities and colleges to understand that with this kind of impact, their failure to make use of the Internet would ultimately hurt their profits as they might fail to attract the one group that uses the Internet the most and coincidently happens to be the target customer section of the education sector i.e. The youth. Milliron (1999) writes: “Predictions that once rang with hyperbole are being answered by hard facts about how Internet technologies are changing the way we work, play and learn. It took only four years for the World Wide Web to be regularly used by more than a quarter of the U.S. population — a feat that took electricity 46 years, the television 26 years, and the personal computer 16 years to achieve. More than 100,000,000 people currently use the Internet, and its network traffic doubles every 100 days. The U.S. Commerce Department estimates that consumer e-commerce will reach $300 billion and business-to-business e-commerce $1.53 trillion by 2002. America Online has grown to more than 16 million members, increasing more than 4 million members in the last year alone.”

With growing use of the Internet, it was only necessary to opt for web presence. Corporate sector was swift to accept and implement this idea and educational institutional soon followed in its footsteps but the latter was slow in complete integration of Internet technologies. When it finally woke up to the idea after 1999, we saw a dramatic increase in the number of distance learning programs offered online, and universities websites mushroomed so rapidly that within a few years, almost every university and higher education institution had a web site. It is important to have a web site because users now come to expect every organization and company to have online presence. For example we take it for granted that travel agencies and airlines would have online presence, which would make reservation process easier and hassle-free. We use the web for everything from booking an airline ticket to following up on our hotel reservation to paying utility bills etc.

Under these circumstances, e-commerce had to enter the education sector too and it did. Apart from the growing number of Internet users, the other factor, which influenced the decision to adopt e-commerce, was the past success of virtual education projects that began in 1995 in the western region of the country. In 1995, Western governors decided to start a virtual educational institute that would provide degrees to students living in remote areas. It was noticed that expansion of mortar-and-brick educational institutions could prove to be a costly venture and the states lacked enough funds to make quality education accessible to people in rural areas. For this reason, they decided to make use of the Internet and laid the foundation of Western Governors University (WGU), which can be regarded as the pioneer in the field of virtual education.

Paulson (2002) writes: “Harnessing the power of the Internet to deliver instruction seemed to offer the economies of scale to meet both objectives. Also, competency-based education with third-party certification of what graduates know and can do made sense in an employment climate where it is commonplace to question what it means to have a degree. Other less obvious reasons for gubernatorial and corporate support for what became Western Governors University (WGU) include a variety of political interests, a desire to foster innovation in higher education institutions, and a need to actively address business requirements for competent graduates.”

This project helped other universities understand the importance of reaching out to people in far corners of the world. Secondly it introduced them to new ways of imparting distance-learning education. Thirdly this university, WGU, helped the learning industry understand the costs involved in adopting e-commerce technologies by education sector. But since number of Internet users in 1995 had not witnessed the exponential growth it did in later years, universities and colleges were slow to adopt e-commerce. In the year 2000, Educause Quarterly published an article “Prepare your Campus for Business” that identified four e-commerce strategies that the authors believed could work successfully in education sector too. These strategies had already been adopted by major corporations including Pricewaterhouse Coopers and were identified as “presence, integration, transformation and convergence.” The writes explained why it was important for education institutions to have online presence and what kind of information must be made available. The authors further focused on the strategies that could help transition to e-commerce easier and successful.

Sylvia Charp (2001) presents details of these strategies: “The presence strategy creates a place on the Internet that describes the educational institution and includes lists of courses, services, online purchasing procedures, catalogs, etc. In the integration stage, the institution reaches beyond its own walls, linking with funding agencies, vendors, subcontractors, etc. The writers state that online student services, alumni communication and online procurement and payment for supplies are bound to improve services and reduce costs. During the transformation stage, strategic partnerships are formed. Finding the “best” vendors becomes a challenge. The convergence strategy recognizes the trend of other industries that are catering to the learning environment. Training companies, publishers, software vendors and hardware manufacturers are re-examining their capabilities as they converge into the learning industry.”

E-commerce in education is now a reality and is definitely here to stay. E-commerce was adopted for important reasons, 1) convenience and increased accessibility, 2) profit maximization. We have already explained how Internet presence can give students greater access to information about courses, more opportunities to interact with instructors and provide them with an enhanced ability with facilities such as video conferencing, computer interaction rooms etc. The second reason is connected with the first one. Increase in revenues is directly associated with increase in customer base. When an institute is able to attract more students, it results in increased profits and Internet technologies have made it easier to accomplish this goal. Many believe that education has become too commercialized with many education sites seeking to increase revenues with advertising and other means. But this commercialization is part of adopting new technologies. So as long as large institutions are providing more convenient way of accessing information and receiving education, it doesn’t matter what additional means of revenues they seek to attract. This is because after all e-commerce is all about doing business online.


Clemons, Eric K., Dewan, Rajiv M. And Kauffman, Robert J. Economics, Electronic Commerce, and Competitive Strategy-Journal of Management Information Systems Vol. 18 No. 2, Fall 2001 pp. 11-16

Karen Paulson – Reconfiguring faculty roles for virtual settings. Journal of Higher Education. Volume: 73. Issue: 1. Publication Year: 2002. Page Number: 123+.

Mark David Milliron – Enterprise Vision: Unleashing the Power of the Internet in the Education Enterprise. Journal Title THE Journal. Volume: 27. Issue: 1. Publication Year: 1999. Page Number: 26.

Sylvia Charp – Management. Contributors THE Journal. Volume: 28. Issue: 7. Publication Year: 2001. Page Number: 10.

Peregoy; Kroder, Developing Strategies for Networked Education THE Journal. Volume: 28. Issue: 1. Publication Year: 2000. Page Number: 48.

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