Executive Summary of Results

Using the Ameritech Fellows grant, I have redesigned a graduate class in ecommerce using an approach based on a novel pedagogical strategy, problem based learning, and a complex technological simulation of a competitive free-market, a Web-based "virtual economy." In this class, students face a complex and ill structured problem –starting up and operating an information-based ebusiness. Teams build and stock the stores during the first half of the semester. Shoppers come to the VE for the second half and purchase real digital products and services with (fake) digital cash. Currently, there are seven stores competing for the business of some 450 shoppers who attend business schools at ten different universities in three countries.

Need for the Project

Since 1996, L561: Electronic Commerce has been a highly structured, teacher-centered lecture course in the School of Library and Information Science (Bloomington). Thirteen topics were covered in fifteen weeks, and the term project involved designing a prototype of a commercial Web site for a local client. The class consistently garnered positive student evaluations, yet, by summer 1999, something seemed to be missing. The course content seemed appropriate, providing students with a reasonable survey of ecommerce. The term project was useful because students worked in teams, negotiated with clients, and managed a lengthy Web development project. However, neither the lectures nor the project involved students deeply in many of the issues discussed in the course. In a sense, they learned about ecommerce from a distance and did not get a sense of the complexities, pressures, frustrations, and gratifications of conducting ecommerce in real time.

To redesign the class, a new pedagogical approach was needed. A review of literature on curricular redesign uncovered interesting alternatives to transference (lecture) based approaches to classroom instruction, particularly “situated learning.” Educators in a number of disciplines have been working with situated learning, using an approach called problem-based learning to develop courses that provide a more student-centered experience. The origins of PBL lie in medical education where it has been used for three decades to train medical professionals.

Problem-based learning is based on an initial problem that resembles a “real world” problem. A key to PBL is a carefully formulated problem, ideally one that students are likely to face as professionals. It should have a realistic context, be complex and ill structured without clear-cut and easy answers, and have nuances and subtleties not immediately apparent. It should support discovery and self-directed learning while engaging the interest and curiosity of students. Consequently, the centerpiece of the course is a large, complex, and ill-structured problem that students explore, analyze, and resolve over the semester – what is involved in designing, building, and managing a Web-based “ebusiness.”

To create an appropriate context for this problem new materials (readings, tutorials, and interactive assignments) have been developed; for example, new material has been made available about business models and writing business plans. In addition, the sequencing of topic has been reorganized to support the ebusiness start-up cycle. During the first seven weeks, class readings and discussions follow closely the components of the problem the students are completing as they prepare their stores to go online. Class time is used to discuss problems that arise in the development of their stores in the context of the relevant readings for that session (for example, how one develops a customer service strategy for an ebusiness). The tight integration of the group project with the in-class interactions supports PBL. During the second half of the class, when students are managing their ebusinesses, in-class discussions range to broader issues of the history, development, economics, and regulatory framework of ecommerce. A current syllabus is here:

http://www.slis.indiana.edu/hrosenba/www/L561/syll/syll8.html

Use of Technology

The learning environment is supported by a technical infrastructure, a working, robust, and Web-based virtual economy (VE) that provides a powerful tool for teaching students about ecommerce. There are only three other similar implementations that I know of, and only one of these uses real products and shoppers, as is done here. A description of the VE is here:

http://www.slis.indiana.edu/hrosenba/www/L561/syll/new_ecomm00.html

In terms of its social structure, the virtual economy is a dynamic situated learning environment. Like all sociotechnical environments, the VE places constraints on the activities that take place within it while providing opportunities for participants to interact with each other in interesting ways. Participants interact in two main roles, as ebusiness owners and as shoppers, and engage in a range of business related transactions.

The VE is a global marketplace. In the spring 2000 version, 76 shoppers came from an ecommerce class in the Napier University School of Business, Edinburgh, Scotland and shopped in five stores. In the fall 2000 course, 110 shoppers came from ecommerce classes in the Schools of Business at Duquesne University and Indiana University of Pennsylvania (both USA) and shopped in four stores. In the spring 2001 version, some 430 graduate and undergraduate shoppers come from ecommerce and information systems classes in the Schools of Business at the University of Oklahoma, Lehigh, the Citadel, and Duquesne University, Georgia College and State University, Kennesaw State University (USA), the University of Greenwich and the University of Bath (UK), and Queensland University and the University of Canberra (Aus) and are shopping at seven stores. In all cases, I have worked with the instructors of these courses to develop assignments for the shoppers that mirror assignments being done by the Indiana University students, which aids in the gathering of content for the stores.

In terms of its technical structure, the VE is a password-protected Web space where storeowners and shoppers conduct business under conditions simulating real-world business-to-consumer ecommerce. Stores sell real digital information products of varying types (annotated lists of Web sites, topical collections of online papers, bibliographies, legislative and policy summaries, consulting and editing services, research-on-demand services, and entertainment) to shoppers who spend digital money. Shoppers and storeowners interact with each other using several communication channels (primarily email, webboards, and chat rooms). The current VE can be accessed at:

http://ebiz.slis.indiana.edu/g/ve/login.cfm

login: tourist
password: tourist
select Spring 2001

The VE has three main components. The VE portal is the gateway to the digital marketplace. It is the first content page that participants see after logging in. All traversal to storefronts occurs through clickthroughs on the portal page store banners. Storeowners have an administrative level of access that allows them to maintain their stores. Shoppers are registered, receive passwords and digital bank accounts, and then access the VE through the login page. They then click through to the stores and conduct their transactions. When finished in a given store, they return to the portal in order to explore other stores.

The second component is the storefront. All stores have the same basic template - a skeletal page with a custom Cold Fusion tag <cf_quickstore>. This tag calls a complex script containing a product catalog, a shopping cart, and a checkout procedure. The product catalog is configured to allow multiple views of the store’s products and services. Storeowners can create as many different categories of products and services as they want and then assign products and services to one or more catalog pages. The default catalog display page shows four items. In addition, there are two levels of product and service information that storeowners can provide. The first level is displayed on the product category page and uses three fields, one for a brief (200 character) description of the product, a second for the price, and the third for the URL of an image. Each also has a link that leads to a page displaying information about the single product. This second level of product information is on a dynamically generated page containing a more detailed product description, the image, and pricing information. This page has a “add to cart” button that allows shoppers to add the item to their shopping cart. All product and product category information is entered through a Web-based form.

When in the product catalog, shoppers have the ability to check their sales histories by clicking on an “account status” button at the bottom of the product catalog. The resulting report displays all of their purchases at all of the stores in reverse chronological order. After filling their shopping carts, shoppers click on the “buy” button to check out. The checkout page displays the products in the shopping cart, quantity totals, individual prices, and the total price. There is also a table that indicates how much money shoppers have left in their accounts. Shoppers can complete the transaction, change quantities, remove items from the cart, or opt out of the entire transaction. Upon completing the transaction, shoppers see a page confirming their purchase; simultaneously, an email message is sent automatically to the storeowners informing them that a purchase has taken place.

The third component is a digital bank. When shoppers are registered, they are given a bank account with $2000 in digital cash. Each store also has an account in the bank and receives money on the basis of the successful presentation of their business plan (in Spring 2000, each store received $20,000). When a shopper makes a purchase, the amount of the purchase is deducted from his or her account and added to the appropriate store’s account. The bank is relatively secure –shoppers and storeowners can check their balances but cannot make changes; they also do not have access to each other’s accounts.

Instructional Design Plan

Describe how the use of technology used supported your teaching approach:

• What student learning outcomes were expected?
• How did your teaching plan encourage active learning, provide feedback, address respective learning styles, and build collaboration?
• What resources were used? (campus technology support services, etc.)
• Would your project be easily understood and executed by other faculty?

For this current version of the class, the objectives are for students to:

• Understand what is involved in starting up and operating an ebusiness;
• Have basic knowledge of what is involved in designing and maintaining a Web based
  ecommerce site;
• Understand the complexities of the marketplace for ecommerce (marketing, advertising,
  customer service, consumer demographics, business models, emoney);
• Understand the history, development, economics of global electronic commerce; and
• Be familiar with the legal and regulatory policy issues that affect ecommerce (privacy,
  security, encryption, intellectual property protection).

As students work through the basic problem of starting up and operating a Web-based ebusiness in a competitive virtual economy, their activities in and outside of class are guided by the basic structure of the problem because the course is also organized around the problem. In practical terms, this means that the sequencing of the materials covered in class, the tasks involved in analyzing and resolving the problem, the benchmarks to be met all follow the trajectory of the ebusiness start up cycle. In this class, students:

• Develop a business plan for their store that will outline the product line, describe how the business will operate and forecast their profitability. This plan is presented to a "venture capitalist" (the instructor) who decides on a level of investment in the business. This investment allows the business to develop and buy advertising space, pay Web-hosting costs, purchase market research, and hire technical consultants.
• Design an ebusiness in an iterative process of prototyping and testing a design that is aesthetically pleasing, allows browsing, and handles transactions. The team designs content pages (product descriptions, help pages, etc) and develops pages containing pre-written Cold Fusion-based product catalogs and order forms.
• Develop content based on the syllabi of the courses taken by the student-shoppers (400 graduate and undergraduate business school students from 10 universities in three countries). Products include annotated bibliographies of print materials, papers, reviews of Web sites, consulting (answering questions) and other activities
• Create an advertising and marketing strategy based on banner ads that are placed on the front page of the virtual economy site. Teams will design the banners and will pay for their placement in a three round sealed bid email auction.
• Develop customer service and loyalty programs to protect4 May, 2007, provide technical support. Teams develop their own procedures for providing after-sale customer service and support. They also create customer loyalty programs through mailing lists, newsletters, or by having sales and discount offerings.
• Manage the business for eight weeks once the VE opens. This involves the delivery of products and services, managing the books, handling customer service and support, and the development of additional information products.

Because the main focus of the course is the design, operation and maintenance of a Web-based ebusiness, students were immersed in active learning from the first day of class. As can be seen in the list of student activities above, teams work on components of the central problem for the first seven weeks of the class and then operate their business for the next eight weeks. They receive feedback from the instructor each step of the way. Once the VE is open, the shoppers, whose purchasing decisions give store teams a clear and real time indication of how they are doing, provide market-based feedback. Because students work in teams, the nature of the major activity in the class is collaborative. In addition, there is some accommodation for variance in learning styles as team members divide the labor and work on the different tasks necessary to get a store up and running (design, information architecture, programming, information search and retrieval etc).

Potential to Impact Student Learning

Clearly define how your project improved student learning - include specific examples of how your project:

• Fostered depth of learning
• Supported efforts to improve retention
• Fostered the learning of large numbers of students
• Has broader applications that will affect learning K-12 or community environments?

This project fosters depth of learning because students have to investigate a range of important issues that surround the central problem of starting up an ebusiness. For example, in the third week of the term, teams present their business plans to the venture capitalist (the instructor). This means that in the first week, they divide themselves into teams and then have two weeks to investigate the problem of developing a business model. Using readings, templates, and their own resources, teams develop the basic model on which their store will be based. For the rest of the term, they are intimately involved with their business plan as they develop and operate the stores that will carry out the plans they have developed. They learn about customer service by reading research on customer relationship management and developing the policies and procedures that they use in their stores. They learn about CRM in much more depth when they begin to deal with disgruntled customers who have complaints about products and services. Even though the shoppers are spending virtual dollars, they take the experience seriously, creating interesting dilemmas for store teams to resolve.

The class does foster the learning of large numbers of students. In addition to the thirty-five students in the class this term, there are 400 students in 10 universities in three countries who are learning about ecommerce in the virtual economy. Their instructors are finding the experience to be very valuable as a basis for discussion. One instructor reports that she has an easier time engaging her students in discussions of the issues involved in business to consumer ecommerce because they all have a experience upon which to draw – browsing and purchasing products and services in the virtual economy.

Educators are facing a serious challenge as they seek effective ways to ready students for work in the digital economy. The use of PBL and a virtual economy has application beyond the classroom and addresses a need for developing pedagogical strategies to prepare the next generation of information systems students for careers in this fast-paced, highly competitive marketplace. This project is a successful demonstration of a strategy based on problem-based learning used here for ecommerce instruction. By focusing on the problem of building and managing an ebusiness in a competitive virtual economy, students learn about the social and technical intricacies of digital ebusiness

More practically, I would like to create a version of this course for distributed education and create a set of materials that would allow remote populations, such as high school students in advanced placement classes or people in corporate environments, to participate in the VE.

Retention is not a major issue in the graduate programs at SLIS, so this question cannot be easily answered.

Assessment Plan

Briefly explain the effectiveness of your assessment plan:

• What measure of assessment was used?
• How did your approach obtain measures of performance?
• Did you feel your measurement was accurate and effective?

Four methods are used to assess student group performance in the VE. First is the calculation of the total profits. From each store’s revenues, the total Web hosting costs (~$1,800 for nine weeks), banner auction costs (variable), consulting costs ($125.00/hr for technical consulting), and refunds are subtracted. Second, the total number of transactions for each store is calculated and third, the number of unique visitors for each store is calculated. There is a small bonus added to the group grade for the store that generates the most profit after expenses (.05%); there is a smaller bonus for the team whose store handles the greatest number of transactions (.025%). In addition, the instructors provide feedback from shoppers after the VE closes. These data provide assessment of the students' work by external interested audiences. This time around, two classes are studying the usability of the stores in the VE and a third class is attempting to ascertain the stores' business models. This first method is suggested by the use of PBL, which stresses the importance of "real world" measures as a means of evaluating performance in resolving the central problem of the course.

The second method involves a series of meetings with individual groups throughout the semester; this semester, the instructor is meeting with each group at least four times during the semester – twice before the VE went live and twice while it is open. During these meetings students discuss the problems they are encountering and the instructor assists them in worked out strategies for resolving the difficulties. During these meetings the instructor’s roles are to be a critical listener, providing an objective evaluation of their suggested resolutions, a facilitator, steering them towards certain resources, and an arbitrator, resolving group conflict, when necessary. From these meetings, it is possible to grasp the extent to which students are mastering the technical and social problems of creating and managing an ebusiness and making use of the resources that they find and that are available through the syllabus.

The third method is a paper where students investigate an issue from a list provided in the syllabus. This provides an indication of the extent to which they are assimilating the ideas and themes from the readings. The last method is a critical essay due at the end of the course where each student reflects on his or her experience in the class, describing his or her contribution to the group, and, in broad terms, what he or she has learned about ecommerce during the semester. These essays are a valuable source of information about student learning and have thus far indicated that students do develop an impressively deep understanding of the workings of business to consumer ecommerce and an appreciation of broader issues in the ecommerce environment. Informal indications of student learning have been provided by private and listserv email.

I believe that the combination of empirical measures, feedback from shoppers, frequent interaction with the groups, and the various written assignments provide a broad and rich means for assessing student performance in the course. From all indications (adding anecdotal evidence from former students), the course is extremely successful.

Plan for Colleague Development

Describe your role and activities as a mentor:

• What mentoring activities were implemented to assist colleagues?
• How did you help to develop colleague's instructional technology skills?
• How do you think your contributions to the Knowledge Base will help colleagues planning similar projects?
• Is your project approach potentially applicable to other contexts or disciplines?
• What tips would you offer?

I have been involved in several mentoring activities. First, I have worked closely with the 15 faculty members who have been involved in the project. These colleagues, most of whom I did not know at the beginning of the collaboration, have volunteered their students as shoppers for the virtual economy. They have studied my syllabus and have developed assignments (with considerable interaction between them and me) that mirror those I have assigned to my students. During the course of this exercise, we have had extensive discussions (by phone and through email) about using problem-based learning in information systems education. I have also demonstrated the virtual economy for these colleagues, provided them access months before their class began, and explained its intricacies. I will be working with one college in a future version of the course where each store team will be composed of students from IU and from his school (University of Virginia). The use of virtual teams will inject another interesting challenge into the problem the students must resolve.

I have also written about and done presentations about this project in front of national and international audiences:

Rosenbaum, H. (2001). Problem based learning and the virtual economy: A new approach to ebusiness education. To be presented at the Eighth EDINEB Conference, Nice, France.

Rosenbaum, H. (2000). Teaching Electronic Commerce: Problem-based Learning in a Virtual Economy. Journal of Informatics Education and Research. 2(2). 45-58.

Rosenbaum, H. and Davenport, E. (2000). Teaching and learning electronic commerce in a virtual economy. In Chung, M.H. (Ed.). Proceedings of the 6th America's Conference on Information Systems.

Rosenbaum, H. Teaching Ecommerce in a Virtual Economy. Supercomputing '00, Dallas, TX. (Invited talk/demonstration)

Rosenbaum, H. and Davenport, E. (2000). Teaching and learning electronic commerce in a virtual economy. America's Conference for Information Systems in Long Beach CA on August 11, 2000.

I have recently submitted papers and proposals on the project as well:

Rosenbaum, H. (2001). Educating information professionals with problem based-learning and collaboration technology, Submission to the American Society for Information Science Annual Meetings

Rosenbaum, H. (2001). The Internet, the virtual economy, and ecommerce education. Paper submission to the Second Internet Researcher's Conference.

Rosenbaum, H., and Lennox, M. (2001). Problem based learning in a virtual economy: Using technology and pedagogy for ecommerce education. Submission for 2nd International Conference on Electronic Commerce and Web Technologies (EC-Web 2001)

Rosenbaum, H., Lennox, M., Moody, J., Ridings, C., and Spangler, W. (2001).Panel proposal: If we build it, they will learn: Teaching ecommerce in a virtual economy Submission for America's Conference on Information Systems 2001.

I expect that my contribution to the Knowledge Base will greatly assist colleagues planning similar projects. I will be able to detail the steps taken to develop and maintain the virtual economy, including the range of problems that have arisen and how they have been resolved. I will also be able to describe the process by which the class was redesigned from its original lecture based format to its current focus on problem based learning. Colleagues should be able to gain an understanding of the extent to which change is necessary when adopting this type of approach and integrating it into their current practices.

The project itself – the virtual economy – could be used in information science, information systems, economics, marketing, and other disciplines where students are being trained to work in and around the "new" economy. The pedagogical strategy – problem based learning – has much wider applicability throughout higher education.

I would offer the following to colleagues contemplating this type of project. Begin planning at least a semester on advance. Make sure that there is enough technical support to manage the virtual economy. I have had to hire a database specialist and a Cold Fusion specialist and make use of my department's two system administrators, one of whom works primarily on the machine housing the VE. Be prepared to spend a lot of time with students in face to face and electronic communication. I also begin soliciting the colleagues who will volunteer their classes to be shoppers eight months in advance. Be prepared to make changes in classroom practice. Using PBL means much less time spent in formal lecture and evaluation based on testing is less useful, especially when there are real world measures that can be used.

Final Comments on Project Results

• Do you think you met the goals of your project?
• What, if anything,would you do differently?
• Did you have any unexpected outcomes? (positive or negative)
• Would you recommend this teaching approach to colleagues?
• What other comments or suggestions would you offer to complete this report?

I believe that I am meeting the goals of this project. The class has become one of the more popular electives in our program – this past semester, there was a waiting list that had enough students to open a second section. Students are coming to SLIS from IST, Telecom, Journalism, and SPEA to take the class. The feedback that I receive from students who have taken the class in previous semesters remains glowingly positive. Many point to this experience in their job interviews and consider their stores to be central components of their graduate school portfolios.

I would spend more time developing the technical infrastructure. Because of the nature of graduate education, students are in the program for a year and a half to two years and they can't easily spend more than a semester or two working on the VE (providing technical support and developing new functions). The Ameritech funding had been critical in allowing me to retain talented students and I have been fortunate to have a steady (albeit small) stream of students who work on pieces of the VE as independent studies.

An unexpected positive outcome has come about as a consequence of the way in which the course has been redesigned. By following the central problem – starting and managing an ebusiness – the course has been effectively "front-loaded." Students do a tremendous amount of work during the first half of the semester and then, once the VE opens, their work load for the class eases up. They report that this allows them to spend time on their other classes, where the work piles up at the end.

Another unexpected outcome is the amount of time that is needed to run this course. In addition to the normal time involved in any course, there is the time involved in maintaining the technical infrastructure. The VE is running 24 hours a day, seven days a week and this places the pressure of operating on Internet time on the instructor as well as the students. If the VE goes down on Sunday night, I have to take care of it. There is also the time involved in meeting with students. PBL requires that the instructor meet frequently with student teams to act as facilitator and arbitrator.

Another outcome, not unexpected, is that this has been and continues to be a lot of fun. I would recommend this approach to adventurous colleagues. The investment is great but the payoff is greater. There is personal satisfaction in developing an education experience that students look forward to and seem to enjoy immensely while learning complex content. They really appreciate the real world simulation and in this project, seem to take great pride in successfully operating their businesses.

As a final comment, I would like to express my deep gratitude to Ameritech and UITS for making this opportunity possible. I have thoroughly enjoyed carrying out this project and the 90 or so students who have passed through the three versions of the class have benefited immensely from the fruits of my labor made possible by the grant. I am already working on improvements for the next version of the class! I would be happy to talk about this project at any time and in front of any audience and will publicly acknowledge both organizations for assisting me in developing this demonstration of technical and pedagogical innovation in higher education. In fact, I plan to spread the word about the Fellows program over the next six months during presentations in Denver, Boston, Washington DC, Minneapolis, Bath and Greenwich (England), Edinburghy (Scotland), and Nice (France).

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