When swathi aravindan decided to enrol for an executive MBA programme online, she already had a decade of work experience across product development roles. But the B.Tech graduate from IIT Madras felt an MBA would help accelerate her career. During the pandemic period, she completed a 15-month MBA course from a foreign university offered on an online higher education (higher-ed) platform. Then she switched jobs, and is now leading a team that drives strategy and execution of a global SaaS firm’s product road map.
Aravindan isn’t alone. Like her, many flocked to online higher-ed platforms to upskill themselves during the lockdowns. Their needs were diverse. Some wanted to change jobs, some wanted to move up the ladder, while some others wanted to augment their income. During that period, universities and their faculty had to rapidly adapt to digital modes of teaching. This extraordinary surge in demand from individual users and institutes provided substantial growth momentum for online higher-ed platforms.
For instance, Ronnie Screwvala-led higher-ed platform upGrad saw its MBA portfolio quadruple while BYJU’S-owned Great Learning witnessed a 4.5x growth for its overall management portfolio in the past two years. And WestBridge Capital-backed Sunstone—an upskilling company that partners with MBA colleges to offer add-on skills, certificate courses and career tracks for students—saw enrolments grow 10x in the past three years. But how did online higher-ed continue to grow when the larger edtech segment—K-12 and test prep—took a hit as physical classes resumed? Several factors kept the growth momentum on track, including an increased supply of programmes, and a progressive set of policies from the government that promotes digital education.
“When everything shut down and revenue from classroom programmes got affected, they (universities) had to embrace online (channels). That fundamental shift has continued,” says Ashwin Damera, Co-founder and CEO of higher-ed platform Eruditus.
The impetus that the National Education Policy (NEP) 2020 offered to online education is also a key reason why things do not look strikingly different for online higher-ed firms as they do for their K-12 and test-prep peers, which saw a drastic reduction in demand. Multiple entry and exit systems, a multidisciplinary approach, and an academic bank of credits proposed in NEP offer online management course providers more opportunities to flourish.
Universities are already collaborating with edtech platforms to unbundle their programmes into stackable courses to make them more flexible and accessible. While NEP permits higher education institutes to offer up to 40 per cent of any course online, the University Grants Commission (UGC) now allows top-ranked autonomous colleges in the National Institute Ranking Framework or institutes with top National Assessment and Accreditation Council grades to offer full degree courses online without prior approval of the UGC. A handful of these already offer fully digital MBA degrees, while many have begun the groundwork for complete online courses that they will either deliver directly or in partnership with edtech platforms.
“If we are growing at 100 per cent, the online MBA market would be growing at 50-100 per cent. But the overall MBA market is not growing more than 5-10 per cent year-on-year (YoY),” says upGrad Co-founder and Managing Director Mayank Kumar.
It’s not to say that digital higher-ed did not see a dip in demand. As people started going back to office, the enrolments dropped, but only marginally. Also, when the job market was booming towards the end of 2021, demand for upskilling courses reduced for a few months because people could land jobs with good pay packages quite easily and the incentive to upskill was not felt much, says Mohan Lakhamraju, Founder and CEO of Great Learning. Damera of Eruditus says his company doubled revenues in FY21 and FY22, but growth is likely to temper down to 70 per cent YoY in FY23. Lakhamraju says the growth of his platform, which peaked to 10x during the pandemic, is now down to 5x.
When the euphoria in the jobs market ended, growth returned for online higher education. “People have realised that if they want to get ahead in their career, they have to invest in developing new skills,” says Lakhamraju. For online higher-ed platforms, the young student base that wishes to pursue classroom-based MBA courses is not the primary market. They design programmes for working professionals with 5-10 years’ experience who are looking for part-time, flexible management courses. According to upGrad’s Kumar, an MBA is becoming a much more “considered” choice that experienced professionals take to advance their career than an “obvious” choice for younger students. He feels this shift towards more experienced learners adds weight to the case of taking up online, executive- or part-time MBAs.
Damera of Eruditus agrees. “Should I continue to work and earn an MBA online versus take a two-year hiatus to do an MBA, is a big question for many. Secondly, if I’m not getting into a top-tier institution, I’m better off doing an online MBA,” he says.
Pramath Raj Sinha, Founder and Chairman of Harappa Education (acquired by upGrad in July this year), says the company is expanding its newly launched online Harappa School of Leadership, to global markets. “An in-person MBA from a decent B-school in India costs Rs 6-7 lakh a year. Without spending `14-15 lakh you won’t get a quality MBA. If you take into account the opportunity cost of not working for two years, you’re losing another Rs 8-10 lakh. Online can deliver high-quality programmes for less than half the cost and save you the opportunity loss,” he says.
Gurugram-based Sunstone looks at management education from an affordability lens. It offers add-on certificate courses, and a combination of soft skills and specialisations to students while they are still in college. Co-founder and CEO Ashish Munjal doubts if industry-oriented courses that higher-ed start-ups offer can sustain themselves independent of formal education. “Parents have already spent Rs 3-4 lakh for their child’s undergraduate programme. Now if you need these additional courses, you are expecting parents to spend another Rs 2.5-3 lakh... So, we believe it should be plugged within the formal education set-up,” he explains.
Online MBA programmes also come with certain hybrid elements involving industry interactions and peer-to-peer learning, offline placement events, mentorship sessions, alumni meet-ups, etc. As per upGrad’s Kumar, the platform saw over 450 career transitions into the MBA domain in the first quarter of the year with learners receiving placements across 75+ companies, including Reliance Jio, Disney Star India, Infosys, Monster and Flipkart. Earlier, corporates didn’t give equal weightage to online MBAs and campus MBAs, he says. “But in the last two years, all MBA grads were online grads, and corporations have now understood that online MBAs can have the same efficacy level as an offline MBA.”
Sunstone shares that it clocked 95-96 per cent placement rates for its last batch. Debashis Chatterjee, Director of IIM Kozhikode (IIMK), says that in 2022, hiring at the institute has been the best ever in the past three-four years. Over 140 companies, including Netflix and Amazon, hired from a batch that completed its course in both online and physical modes. Meanwhile, most online higher-ed platforms are further augmenting their B2B presence as enterprises are increasingly working with online providers in hiring, retention and talent development.
The demand for full-length offline MBA seems to be diminishing. More and more people are questioning the very structure of traditional MBAs, as innovations in course design offer greater flexibility to aspirants. It doesn’t make sense for a student of digital marketing to learn 40 subjects to earn an MBA; rather, he/she could take five courses in digital marketing in addition to the basics of management science, they argue. “What changed this perception was more online education and professional courses being available on different forums. People have started weighing the benefits of doing such a course while working,” says MakeMyTrip Founder Deep Kalra, an IIMA alumnus.
However, K. Ganesh, promoter of start-ups such as bigbasket and HomeLane, and an alumnus of IIMC, differs. He is of the view that people should take a hard look at whether an online MBA is worth their while. “As an add-on skill, online MBAs are fine, but not as the main thing. I’d recommend people take a serious look at it,” he says. What is certain is that while premier B-schools continue to be in great demand, lower-ranked institutions that struggle to generate great learning and placement outcomes will suffer. “Offline MBAs from premium colleges will always be valued... But there will always be others who may not be able to get into those hallowed B-schools. And they will ask themselves: Should I compromise [do an MBA from a lower-ranked institute] or get a certification from a brand name B-school online?” elaborates Harappa’s Sinha.
It is quite evident that online management education is here to stay. Platforms that offer such courses are well-poised to grow as B-schools strive to be self-sufficient and expand their footprint by offering more courses online. The perception of learners and employers about online education being inferior is going away, hiring of online graduates is picking up pace and the cost structures are more affordable. As IIMK’s Chatterjee puts it, this may be an irreversible change. “The mental models have changed, so the digital infrastructure already in place will be actively used. It has opened up opportunities for institutes for internationalisation of programmes,” he says.
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