InformationWeek

T systems with fast, proven return on investment win out when budget belts begin tightening. And that's what has sparked recent revenue growth at several E-learning suppliers. Click2Learn.com, DigitalThink, Docent, SmartForce, and Centra Software all posted improved quarterly revenue figures in April. Sales were up, losses trimmed, and SmartForce reported another quarter of profitability.

In the current economic environment, IT budgets are shrinking, "but E-learning software is taking up more of the budget," says Fred McCrea, an analyst for Thomas Weisel Partners. "That's because the real selling point is an ROI that's tangible and immediate."

Case in point: Marty Murrillo, manager for sales training at Palo Alto, Calif., software developer iPlanet E-commerce Solutions, reduced his training budget by 40% within a year of deploying three DigitalThink training modules for the company's 800 sales representatives worldwide. Previously, sales training for the joint venture of Sun Microsys-tems and Netscape was held in classes that cost as much as $4.5 million for week-long sessions called "road shows."

Murrillo advocates online training, especially since his department's budget was cut in March. "I can get twice as much for my dollar with Web-based training than with more costly instructor-led training," he says. The savings were so great that he's already extending the training to more than 5,000 salespeople at Sun.

E-learning offers significant cost reductions--and not just in travel expenses, says Bruce Mills, manager of performance management for the industrial controls division of Honeywell International Inc. in Ashland, Ky. "It's the downtime that really kills you," he says, referring to time spent away from projects. But with NetG's specialized IT courseware and SkillSoft Corp.'s business-skill content, Honeywell engineers and technicians can fit training into their work schedule by taking courses at their desk instead of off-site.

E-learning represents 60% of the division's training; Mills expects that could increase to as much as 80% during the next 18 months. Honeywell will devote its classroom instruction primarily to hands-on lab experience.