Tough times for training

Don't train your people, and your company will fall behind. It's not a question of maybe—it's a dead-on certainty. But the equally loud lament heard from many high-tech managers is, "Where's the money supposed to come from?"

One of the ways companies are adjusting

to pared-down training budgets is by incorporating e-learning, which nowadays might as well stand for "economical learning." For example, instead of five days in a classroom, salespeople at Cisco Systems Inc. , San Jose, CA, spend no more than two days with instructors and the rest in Web-based training, says Rick Crowley, director of e-learning architecture at Cisco's Internet Learning Solutions Group. He adds that most employees will pick up the e-learning components at night or during lunch. "That lets our salespeople stay out in the field, in front of customers," says Crowley. Although Crowley won't get specific about bottom-line figures, he says Cisco is "saving millions of dollars," mainly in reduced travel costs. Additionally, he says, employee time is used more productively. "E-learning definitely pays."

Training can mean anything from keeping your HR people up to date on policies and procedures to keeping your engineers apprised of the latest technology breakthroughs. "Corporate training budgets are down 20% in just the past two years, but companies want 10% more training," says Robin Gunn, a vice president of Pleasanton, CA-based PeopleSoft Inc. E-learning is the answer, especially now.

E-learning has helped slash travel expenses at Sun Microsystems Inc. , Santa Clara, CA, says Mike Wenger, senior director of e-learning. In 2001, Wenger says, he flew about 200,000 miles. In 2002 that figure dropped to 100,000 miles. "This year I won't crack 100,000." What's changed? "Now, we are extensively using e-learning tools.

"The technology has gotten much, much better," adds Wenger, who vividly remembers that just 10 years ago—maybe even as few as five—e-learning meant crudely repurposed instruction manuals that had been hastily tossed onto CD-ROMs. Employees understandably scorned these "page turners," as they are known in the trade.

Just what is e-learning? It's easier to describe what e-learning isn't: live, in-person, instructor-led classes. But almost everything else is: Web-based training, online workbooks, even real-time classes in which a live instructor delivers lectures to students in remote locations over the Internet.

But the increased use of remote training is presenting a new set of challenges for managers. In most companies, instructor-led training traditionally has been perceived as a perk and e-learning has come to be viewed as second-rate. But the push is on to change that.

How? "Internal marketing is the key," says David Palumbo, vice president of learning services at Cambridge, MA-based Sapient Corp. "The more we market e-learning internally—the more clearly we explain why it is good for the company and for the individual—the better the success we'll see." Vendors of e-learning programs are helping this marketing effort by supplying customers with the tools—e-mail blasts, PowerPoint shows and so forth—for promoting this new-style courseware and stressing the positive aspects. That's aimed at bringing more people, more willingly, into e-learning classes.

But the next step is keeping them there: a challenge for both high-tech managers and e-learning program providers. Customers are fuming that completion rates for e-learning courses are anemic—as low as 20%, says Ray Halagera, president of Scranton, PA-based Career Systems International, a developer of e-learning courseware. "Everybody in the industry knows we have to raise completion rates to levels nearer those achieved by instructor-led courses." In many cases, those levels are more than 50%, and sometimes as high as 75%.

Vendors say they are working hard to make online courses more compelling. "We can take a page from the gaming industry," says Clint Everton, a vice president at Naperville, IL-based NETg, Inc., an e-learning leader. "Customers want more-robust content, and they will be getting it. We'll be adding more interactivity, sound, and even making courses more gamelike. The better our content, the more people will complete the courses."

Another way to increase completion rates is by tailoring coursework that's immediately relevant to a specific employee's job, says Daniel Messick, strategic planning manager for the Canon USA Sales Training Division in Lake Success, NY. When Canon has deployed e-learning in conjunction with product rollouts, "completion rates are very close to instructor-led course completion rates," Messick says. "Align the e-learning to business objectives, and you'll get good results."

And customer demand may propel e-learning to a leading—rather than supporting—role in corporate training. Customers are demanding a level of flexibility that traditional classroom instruction cannot match. "The buzzword today is 'just-in-time learning,'" says James Lundy, a Gartner Group vice president. For instance, instead of enrolling a manager in a multihour course on Microsoft Word, because that's the way training has always been done, organizations are demanding access to only the portion of the course the manager needs. And they want him to be able to access that portion exactly when, in the midst of creating a report, he needs it. "That's what we are seeing more organizations insisting on," says Lundy.

E-learning vendors, meantime, are scrambling to respond to customer demands. Plenty of issues need to be resolved, such as how to price e-learning à la carte when it's always been sold in wholes. But the fact that such conversations are now taking place is a sign of e-learning's increased maturity. "We really are in a revolution," says Sun's Wenger, "and the real revolution is that, finally, people are using these e-learning tools."

Terrific as it sounds, though, e-learning has yet to sweep the market. "The global training market is around $110 billion annually," says Gartner's Lundy. "E-learning is perhaps $3.5 billion to $4 billion. We are still in the early stages of adoption."

But, Lundy adds, the dollars spent on e-learning have doubled in just the last year—and more growth is probable. Says Sun's Wenger, "In fat times, we often brought people physically together. In lean times, we are using e-learning"—and that just may bode well for the spread of e-learning in the near term.