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February 26, 2001 |
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E-Learning Branches Out
E-learning systems may not be easy to implement, but many companies see the potential for a broad business impact
By Sandra Swanson (sswanson@cmp.com)
ony Loyd knows how to make a compelling business case for E-learning. He also knows how painful it can be.Last spring, the manager of learning technology for John Deere & Co.'s Moline, Ill., construction-equipment division worked with a team of 20 training managers hammering out a companywide E-learning strategy for the $13 billion heavy-equipment manufacturer. They argued that improved training for the company's 15,000 technicians would increase customer satisfaction. Moreover, they knew that their increasingly sophisticated customer base wanted access to training through John Deere. To make those things happen, the divisions had to get funding.
One day last June, the managers gathered in a conference room at the Abbey Hotel in Davenport, Iowa, to present their "strategic blueprint" to a dozen members of John Deere's executive management team. Before the 10 a.m. presentation, the executives were each given a copy of the 200-page blueprint--wrapped in cellophane so they wouldn't flip through it while the presenters were speaking. They unwrapped the documents anyway. And there was something else that didn't quite go according to plan that day: Loyd's presentation.
When Loyd tried ad-libbing about his background, he lost his train of thought. When he tried to explain the finer points of the proposed E-learning plan, he stumbled over every word. At the end of the two-hour presentation by Loyd and four others, one of the VPs, a Texan with a reputation for straight-shooting, spoke up. He told Loyd that it was the worst presentation he'd ever heard, but that it was a compelling business case and the company absolutely had to execute the plan.
The next morning, Loyd received an encouraging E-mail from his manager's boss: "I really think things went great. Š You hit a home run." Loyd wasn't convinced about his public-speaking skills, but the E-learning strategic blueprint had been a hit. By mid-July, Loyd had the money to get the project rolling. He won't say how much, only that "it's more than double the previous year's entire training budget." The online John Deere University program is slated for a March rollout.
When it comes to making the business case for E-learning--providing training and instruction online--companies such as Air Canada, DuPont, John Deere, Ford, and J.P. Morgan Chase are placing long-term bets, moving beyond the traditional notion that E-learning helps cut training costs. They see the potential for broader business impact: tying learning to increased sales, improved employee retention, and better customer service. Still others are reaching outside the firewall, offering online instruction to business partners and customers, or exploring E-learning's revenue potential with online versions of fee-based classroom instruction. As a result, corporate training departments are becoming strategic business assets. And they're teaming with IT managers to make these initiatives work. New corporate E-learning programs will push U.S. sales of E-learning technology to $11.4 billion by 2003, International Data Corp. predicts.
Of course, saving money still has plenty of appeal, and Web-based training yields big savings by letting employees learn from their desks instead of flying them halfway across the country. But for many businesses, that's the least compelling reason for adoption.
"We didn't set out to reduce the cost of training; that's an old paradigm," says Brian Corbett, manager of E-learning and knowledge management at Air Canada in Montreal, which has so far invested $1.5 million in a four-year, worldwide rollout of E-learning for all of its airport ground crews. "We're integrating a culture of safety and awareness," says Corbett. "The VP of airports likes that a whole lot."
But even proponents admit that it's difficult to deal with the growing pains of most E-learning initiatives. Dramatic culture shifts are required at times, especially when users aren't computer savvy. And E-learning can have a steep technology learning curve when products don't work together or when E-learning is perceived as a bandwidth hog. Nevertheless, companies are moving forward. Four out of five CEOs whose companies provide or are planning to provide online training view E-learning as important to their business strategies, according to 250 business and IT professionals surveyed last month by InformationWeek Research.
Much of E-learning's potential ties into the buzz surrounding today's knowledge economy. Human capital will make or break your business, the management gurus say; the more your employees know, the more they can accomplish. Of course, the need for well-educated employees is nothing new. But with ramped-up product rollouts and customer requests, there's a greater urgency to provide training that can be updated quickly and accessed at employees' convenience.
For salespeople at Circuit City Stores Inc. in Richmond, Va., Web-based training is the only way to keep pace with rapid-fire product introductions. When vendors send representatives out to personally train salespeople about their products, it can take anywhere from 16 to 24 weeks before all of Circuit City's 750 locations are covered. With E-learning, Circuit City can have online training developed in six weeks for a new line of digital cameras, says Jeff Wells, VP of human resources.
Since employees with more product knowledge will sell more digital cameras, home theaters, and everything else, E-learning "is the ultimate competitive advantage," Wells says. To prove that, Circuit City is integrating its DigitalThink Inc. learning-management system--software that manages a company's Web and classroom training courses, including registering users and tracking course completion--with its PeopleSoft Inc. HR files. This will let the company track whether sales performance improves after training and how to customize the training for each individual. "HR initiatives [usually] take two to three years to judge, but we think we'll see some very good short-term results."
J.P. Morgan Chase also values E-learning's ability to convey information quickly across an organization. That's why the recently merged bank and investment company in October introduced 14 hours of online E-business content for employees using the Ingenium learning-management system from Click2Learn.com Inc. The goal is a workforce that's better prepared to create E-business solutions for customers. "With a traditional classroom solution, it would've taken six months to a year to train our 83,000 employees," says Peter Jones, director of E-learning for J.P. Morgan Chase. With that snail's pace and the rapid changes in E-business, content would be irrelevant by the time it reached all employees through classroom-based training.
Unlike classroom instruction and even CD-ROMs, Web-based courses, at their best, can be updated on the fly. Still, E-learning doesn't always equal flexibility, so caveat emptor should be the purchaser's mantra. During a beta test with an E-learning supplier, Volvo Trucks North America Inc. was told that once its E-learning portal was up and running, the company could design its own courses. Not quite. "There was no internal flexibility other than dropping words into paragraphs--the templates were extremely rigid," says Mark Williams, project development manager. So Volvo had to bring back consultants to redo programming, at anywhere from $65 to $200 an hour. Needless to say, Volvo dropped that vendor. Williams says, "It was like they sold us a pretty package, but it had to have batteries, and they were the only ones that had the batteries." Volvo ultimately chose a product called Socrates from Quelsys LLC, particularly because it's easy to use. Socrates includes a course-authoring tool, a learning-management system, and an E-commerce option that lets companies resell their training material.
Many companies with large-scale rollouts are willing to wait before demonstrating hard-dollar paybacks. According to the InformationWeek Research survey, 46% of respondents already see a return on investment, but 21% say it will take a year or more to report ROI on their programs. "People need to [assume] that the first year is going to be an investment," says Brandon Hall, lead researcher for Brandon-hall.com, which does E-learning research exclusively. Consider the cost of a learning-management system: The average price for a system that handles 8,000 students is $550,000, a fivefold increase from 1997, Hall says. And that doesn't include costs associated with content and Web servers.
The total investment can be a big, bitter pill to swallow. J.P. Morgan Chase's Jones knows companies that have spent $7 million on large-scale E-learning initiatives. "I've spoken to lots of people at different companies, and I haven't seen anybody who's been able to say, 'I've saved money the first year.'" Chase is no exception. It won't realize any savings on E-learning this year either, says Jones, who won't say how much the company has invested.
Air Canada didn't save money in the first year of its E-learning program in 1999, but that was never a goal. The $6 billion airline wanted to create a stronger safety culture for ramp employees, who are responsible for ground handling of planes: loading and unloading cargo, deicing planes, and directing planes to airport gates. Air Canada launched an E-learning trial based on voluntary use in the summer of 1998.
Trouble was, about 80% of the target employees had no computer experience. Kim Horne, an E-learning integration manager at Air Canada, recalls one employee who had his first computer encounter at the training session. "He picked up the mouse and said, 'OK, what do you want me to do with this now?' and jokingly starting talking into it." Horne has seen at least one employee speak into a mouse in earnest: "Some people have been watching too much Star Trek."
Illustration by Lorraine Tuson
Photo of Loyd by Doug Knutson
Photo of Corbett by Tim Krochak
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