It is cheaper and more effective than traditional training methods and is quietly winning a large share of users' budgets. So how do you weave it into your strategy?
E-learning was once billed as a revolution in training and a cheap, efficient replacement for classroom-based courses. Although the revolution did not really happen, e-learning has quietly become a mainstream part of corporate training in both the public and private sectors.
The market for IT training has shrunk over the past three years but e-learning - generally defined as training via an internet browser - has continued to grow steadily. In 2002, UK companies spent 11% of their total training budgets on e-learning, up from 9% in 2001, according to research service the IT Skills Research Programme.
Most analysts believe the growth in e-learning will continue, driven by its potential to cut a company's training costs and save staff time. Insurance firm Royal & SunAlliance, for example, is rolling out an enterprise learning management system to its 50,000 staff worldwide, and the Ministry of Defence, which spends £2.2bn a year on training, aims to deliver 30% of its training electronically within the next few years.
E-learning can provide 30% more training content in 40% less time and at 33% of the cost of more traditional techniques, according to analyst firm Meta Group.
Jennifer Vollmer, research analyst at Meta Group, predicted that, in future, e-learning would no longer be treated as a standalone endeavour. She said it would become woven into companies' enterprise IT systems, aided by technologies including threaded group discussion - where groups in an online forum can chat about a main topic and divide off to talk about various sub-topics - synchronous meeting tools and chatrooms.
This is a departure from when e-learning was delivered chiefly through learning management systems that combined a repository for content with automated testing tools and a workflow function for notifying line managers and human resources departments. E-learning can also be done through a combination of conference media, such as instant messaging, company intranets and face-to-face meetings.
Recognition of the bigger role e-learning will play within the enterprise has encouraged some of the largest software suppliers to throw their hats into the ring. Oracle, IBM, PeopleSoft and SAP now offer e-learning products alongside specialist suppliers such as Saba and KnowledgeNet.
However, the consolidation of the e-learning market over the past two years has left many users with systems they cannot maintain. Gartner predicted that a further 25% of suppliers in the learning managed systems market will be involved in mergers and acquisitions this year.
Another challenge for IT directors is to persuade staff, including those in their own departments, to use e-learning systems once they have been installed.
"A more common scenario is that once a company has bought an e-learning system, nobody uses it," said David Pardo of IT Skills Research Programme. "E-learning has not been popular with IT professionals and other users. People value classroom interaction."
Regarding e-learning as a cheap way of replacing traditional training methods has been one of the biggest pitfalls the e-learning community has wised up to.
In the worst-case scenario, this approach to e-learning is equivalent to "help files on steroids" said Robert Chapman, co-founder of the Training Camp, which offers classroom-based programmes of accelerated learning to IT professionals.
"E-learning is good for tactical-type learning, but is not very effective for teaching curriculae which are deep and broad. I have not come across anyone who has been told 'here is a learning package and I want you to sit at your desk and do nothing else'," he said.
One way to ensure a return on investment is to apply e-learning at the appropriate level. Companies such as Scottish Equitable (see case study, above) have reported that e-learning is a useful way of delivering basic knowledge about a topic that is then covered in more depth in a classroom-based training course. Similarly, e-learning is highly effective for certification of certain levels of mandated regulatory or technical competencies.
Whatever the benefits of staff morale or training efficiency, it will generally take firms up to three years to achieve cost savings of 20% to 30%, according to Tom Kraack, senior partner at management consultancy Accenture.
Companies developing their own e-learning systems face similar risks to other IT projects, such as the risk of technology becoming obsolete or not delivering on user requirements. Compliance with emerging technical standards for e-learning, such as Scorm (Shareable Courseware Object Reference Model) and HRIS (Human Resources Information System), will help mitigate this risk.
For smaller firms with fewer IT resources, getting a supplier to install and run an e-learning system might be more practical.
Like many technologies, e-learning suffered from being over-hyped in its early years, but is now proving to be a useful training strategy, rather than a replacement for classroom training.
The development of internet-based technologies has opened up new opportunities for e-learning which can also help cut costs. The challenge for IT directors and their boards will be in persuading end-users that e-learning can be interesting and worthwhile.
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Case study: Scottish Equitable
Pensions provider Scottish Equitable is a pioneer of e-learning, having used it since 1990 to train its 5,000 staff in financial legislation. E-learning now consumes 63% of the company's training budget.The training costs £7 an hour, compared to £31.85 an hour for traditional classroom methods.
Although computer-based methods are an ideal medium for delivering updates of financial services knowledge to staff on a self-service basis, other organisations have been less willing to embrace e-learning. Perhaps surprisingly, IT professionals can be reluctant e-learners, according to Bruce Deans, group resources manager at Scottish Equitable
"My experience has been that IT people are wedded to this idea of going away on training courses," he said. "There is more interest in e-learning now, because it is harder to obtain access to funds for external training."
Deans thinks that resistance to e-learning is partly because it is so similar to the normal working environment and it does not provide the necessary level of stimulation for learning to take place. "We have found that IT people have bought into the idea of e-learning providing the fundamentals, but when more complex issues about the application of learning are concerned, we realise that an external tutor is needed to provide the necessary interaction and the benefit of others' experiences."
- Protect yourself from being "orphaned" by the expected merger activity among training providers this year. When negotiating contracts, ask for specific investment protection clauses
- E-learning is cost-effective when used as a prerequisite for certification, or as a way of teaching the fundamentals of a topic
- Use e-learning as part of a blended approach of individual online learning and group classroom techniques
- Make sure that an organisation is open to learning before introducing monitoring and testing activities.