Russian Business Education Goes Online

Innovations cut costs and bring new students from the regions to programs. 

The combined online and classroom IntegratedMBA program was launched in the IBS RANEPA business school two years ago. Like the traditional full-time program, it is designed to be two years of training, but cheaper — 496,000 rubles ($7630) compared to 697,000 rubles ($10,723). "This year, despite the crisis, enrollment in the course increased by 30%. We have been able to attract significantly more students from the regions," said Yaroslav Pavlov, director of IBS RANEPA online learning programs. Pavlov said that the program's price is not the only reason for its popularity. According to him, people who want to save time as well as money sign up, especially those who face air travel from other cities.

The boom in online business education in Russia was noted several years ago, but it is only since the crisis that leading business schools are seriously thinking about developing this area, experts tell Vedomosti. The reason is not only schools' desire to reduce the cost of the educational process on a market rocked by the crisis. "The industry is going through a consolidation process. Large schools are expanding their share of the market, taking customers away from smaller schools. The online learning format allows them to increase their audience and capture the relatively open regional markets," said Yury Tazov, president of the Russian MBA League.

Only online

The audience for the CityBusinessSchool's online MBA school is extremely heterogeneous, its general director, Natalia Lagenen, acknowledges. The school, which has no classrooms, offers online MBA courses to middle and senior managers and owners of companies. "Some of them sign up to get specific knowledge, others believe in computer technology and want to be on the cutting edge and so choose online education," Lagenen said. According to her, only 40% of students this year are from Moscow and St. Petersburg, the other 60% live in other regions. The course costs 215,000 rubles ($3258). According to Lagenen, the one and a half years of training includes all the traditional subjects and exercises for the MBA: video lectures by teachers and professionals, an online simulator, and exams. There is a crowdsourcing platform where students can create your own cases and discuss other people's. "For regional students, it is important that they can communicate directly with professors and experts in Moscow through us," Lagenen said. Maria Tetereva, owner of the Akvist consulting company in Yaroslavl and graduate of the school, fully agrees with her.

"In the online course, I received knowledge that no one in my city could give me. I learned new working methods and new approaches," Tetereva said, and added that, after the online MBA course, she was able to increase the value of her consulting services tenfold.

Supporting traditions

Leading Russian business schools are, nevertheless, against a fully online learning format. "Online education is fine when you need primary knowledge, but you also need to have live work in the same classroom with other student for in-depth study of a subject and solving complex problems," said Elena Pereverzeva, dean of Mirbis. An electronic dean's office has been created at Mirbis, and the part of the course content has been transferred online for independent study by the students. The rest of the training is held in the traditional classroom format. It has only been since the crisis that the school has considered starting a separate full-time online program that might attract more students from the regions.

Business School Skolkovo is also thinking about the wider use of the remote learning format. But here we are talking more about online simulations and independent work in online programs, rather than the creation of a fully online course, says Denis Konanchuk, deputy academic dean of Business School Skolkovo. "Business education is much broader than gaining specific knowledge sitting at the computer. It is also the formation of the community, working on projects in teams, discussing cases," he said. He said attempts to convert all the training in an MBA program to the online format was nothing more than a marketing ploy. There are already about 4500 online courses worldwide, one-fifth of which are dedicated to business and management, he said. So if a business school cannot create original, competitive content in the online learning format, the education is worthless.

Not always affordable

The quality of online business education in Russia is still an open question, Tazov said. It looks simpler than it is: teachers' lectures are recorded, students are chosen from throughout Russia and the recordings are broadcast to them over the Internet. But, in fact, the creation of a high-quality online course is much more difficult and expensive process, experts say. The IBS's Pavlov explained that just the first step — the introduction of the LMS (learning management system) — cost the school about 1 million rubles ($15,000), and creation of every course costs several hundred thousand rubles more. Only the leading Russian business schools can afford it. Therefore, although the online MBA market segment is growing, no new players are appearing on the market. Smaller schools simply cannot afford it and are forced to give up potential customers to the major players. "Sometimes, they pass off online tutorials as online coursework. But this does not help," Pavlov said.

Another problem is promoting a new online training product, said Grigory Avetov, general director of the Synergy business school, which offers students a full-time combined classroom and online MBA course for 500,000 rubles ($7500) and a fully online program for 210,000 rubles ($3180). Avetov argues that the market for fully online MBA training is already divided between three main players: Synergy, CityBusinessSchool and MoscowBusinessSchool. They sell their programs in Moscow and St. Petersburg, but especially in the regions. Only 20% of Synergy students live in Moscow and St. Petersburg, for example, and 80% are in the regions. "Small schools couldn't run and promote their products on this market, even if their survival depended on it. They would not have the money for it," Avetov said.

Finally, money is needed not only to launch and promote an online course, but also for its daily operation, such as monitoring the students. At Synergy, in addition to special monitoring software, 30 trainers communicate online with students, answer their questions and check the quality of their homework. Each trainer has 100-150 students. They are, of course, paid.

Can't tell the difference

The debate on the quality of online programs and the need for that learning format so far remains within university walls. The labor market does not differentiate between graduates of the different schools, said Anna Burova, head of human resources management consulting at the Manpower staffing company. "Applicants with MBAs are appreciated for the flexibility of their thinking and motivation for rapid change. These are the people who set the bar high and are not afraid of difficulties," she said. Personally she has no prejudices against online education. "It is an opportunity to do it within the limits of their money and time. It doesn't matter where you study — in Siberia or America," she said. "The main thing is to know how to apply this knowledge in a rapidly changing business environment."