Plug Into E-Learning

Global Knowledge, 3-year-old training and education solution provider in Cary, N.C., has seen companies turn to

e-learning during the recession as a way to increase employees' knowledge, thereby enhancing the company's offerings.

Take IP Communications. When it launched its first client offering more than a year ago,a broadband capacity package for small and midsize businesses,the company made do with an inexperienced sales team.

But as the economy tightened, the company decided to move up market, beyond providing basic access to custom network design for bigger enterprises. Aside from recruiting veteran salespeople with backgrounds in areas like telephony, wireless and frame relay, the company wanted to improve its training programs to standardize education across the company. So, Bill Harrington, senior manager of training for the Dallas-based firm, turned to Global Knowledge.

Working together, they designed a 14-part, CD-based learning system in which salespeople go through a self-paced series of tutorials on the fundamentals of telecommunications, networking and TCP/IP protocols. To centralize the activities, Global Knowledge set up a hosted location on its own Web site, so IP Communications employees could go online to fill out assessment forms and have their progress monitored from one location.

Since the system's implementation in October, more than 50 sales reps have gone through the training. Now the company is working with Global Knowledge to design a second phase of training, a Web-based virtual classroom program.

Growth Potential

IP Communications is just one example of how companies are turning to e-learning solutions to get a competitive edge. That shift in spending presents a big opportunity for solution providers.

"This is a market that in 1998, if you were an analyst, you couldn't put a dollar amount on it," says Bill Hitchcock, global director of digital learning at EDS, a Plano, Texas-based global IT services company. "Now the expectation is that just the e-learning part of corporate learning is going to be $23 billion by 2004. That gives you a sense of the glide path this thing is on."

Hundreds of small and midsize companies already sell some form of e-learning solutions. Like EDS, many larger solution providers have established their own e-learning divisions; IBM Global Services, PricewaterhouseCoopers and Accenture are but a few. Others are strengthening their existing offerings. One in particular is Dimension Data, which last June purchased the Colorado Computer Training Institute. Late last year, the company completed the integration and rolled out a new suite of e-learning solutions.

Still, it looks like e-learning has a long way to go before it lives up to the initial hype bestowed on it. While a big selling point is the resultant cost savings, today's customers want to know that their learning programs are producing real results. According to a survey by Gartner of more than 150 training coordinators, respondents gave e-learning exceptionally high marks for cost-effectiveness and efficiency (both scored 9 out of a possible 10). However, important areas like customer satisfaction, meeting goals and changing users' behavior scored much lower (ranking 6, 5.5 and 4.5, respectively).

The message: IT buyers are taking a critical view of e-learning solutions. "We're entering the stage of smart adoption," says Michael Fox, vice president of e-learning for Global Knowledge. "People are really starting to understand what the return is, what they are getting for their money and what it can do strategically for their businesses."

Here are several ways solution providers can demonstrate those kinds of results and win big deals.

Sell Into the Enterprise

If marketed correctly, e-learning solutions can be sold into several areas of your clients' businesses. Among them are CXO-level executives who oversee corporate spending decisions, individual employees who have the ability to make their own decisions about skills education, and operations and line-of-business managers who are responsible for rolling out new products and programs.

For EDS, the latter group provides the best opportunity, Hitchcock says. For example, the company recently implemented a solution for a large telecom provider that was struggling to keep training and education programs up to speed with new product rollouts. The company's traditional programs, which included classroom training and mailers, were taking up to 15 months to complete. In most cases, by the time the entire VAR and corporate sales channels were up to speed on the new product, it was already near the end of its life cycle. Working through the company's line-of-business managers, EDS convinced the company to go with an e-learning program that could be better aligned with product rollouts. "We built the program hand-in-hand with their subject-matter experts, and within 30 days of the program's launch, they had already penetrated 40 percent of the constituency," Hitchcock says. "Speed-to-learner was a tremendous value to them, but the other value was the consistency [the program brought."

At the other end of the spectrum, companies like Global Knowledge win a good portion of business marketing to employees specifically with educational requirements, targeting them through direct-marketing and mail campaigns.

"A great example of this is anything that has to do with a certification that may change a pay grade or give the employee a promotion or bonus," Fox says.

You should also consider going to the training department managers,those directly responsible for the programs. However, the risk is that training managers often approach implementations from a do-it-yourself perspective and may see e-learning as a direct threat to their jobs. Tread lightly.

Show ROI

According to Mike Littlejohn, general manager of IBM Learning Services, the training initiatives of a typical Fortune 1000 company can be broken down into two parts. While 10 to 30 percent focuses on generic training--e.g., managerial programs, basic accounting or application skills,the bigger opportunity, the remaining 70 to 90 percent, revolves around proprietary learning unique to the organization.

But the reality is that during the past four or five years, most e-learning efforts have targeted generic issues,what Littlejohn refers to as the low-hanging fruit.

"If you do a Web search right now, you can find dozens of e-learning offerings on Lotus 1-2-3 or basic negotiation skills," Littlejohn says. "But that doesn't represent the larger piece of the pie."

Why haven't more companies attacked that larger opportunity of proprietary learning? For one, it's a much larger investment than just signing up with your local e-learning company and getting a URL. It requires establishing a learning- management infrastructure, a learning-delivery infrastructure and a mechanism to repurpose content for new media.

Learning Management Hot

Clients can be convinced that all that work is mission-critical if you can show your solutions will deliver real ROI. Littlejohn points to IBM as an example. To date, Big Blue has ported more than 40 percent of its IBM-specific training programs to

e-learning, saving an estimated $350 million annually for customers for each of the past two years.

Global Knowledge usually goes to market with a "total learning-system cost" scenario to show potential clients the actual costs associated with traditional training programs and then compares them with the cost of the services it can provide. "We can usually demonstrate anywhere from a 25 to 40 percent savings overall, sometimes more," Fox says. "So that's a great message for us to be able to say, 'Here's the net cost of our program vs. the net cost of your program.'"

As with any hot industry, e-learning has seen the emergence of countless tech vendors in the past few years, with tools that do everything from content creation to content delivery to collaboration. But the ability to integrate them into platforms that can be easily implemented, managed and monitored has been missing.

Learning-management systems are becoming a hot growth area for VARs because they give clients a stable platform to administer a variety of programs and keep track of employee progress, says Michael Brennan, senior analyst at IDC.

The core of EDS' e-learning effort revolves around a "learning consulting" framework, which it uses to help clients pick appropriate media and the most effective and efficient delivery techniques. It then designs programs to address relevant business needs. As part of the e-learning framework, EDS has designed a platform of products from vendor partners, including DigitalThink for its asynchronous engine, Centra's synchronous engine, Books 24/7's referenceware, and AF Kelly and Z Interactive for staff-augmentation support to build products tailored to specific needs.

"When companies commit to [dipping more than just their toes in the water, they are finding out that it's a jungle out there getting all these things to mesh or deciding which ones to go with," Hitchcock says. "The main question from clients is how they can sort that all out and get the right combination to make it work. My answer is they don't have to. I already bloodied my nose and I already stepped in the holes. I can tell them right now that the consortium of providers and the platform we created, with our consulting expertise wrapped around it, works."

That platform has helped General Motors, one of EDS' earliest learning-solutions clients, keep its programs relevant in the face of a changing market. EDS started working with GM in 1996, building the company's first corporate university on native HTML--before the explosion of e-learning tools. Since then, GM has used EDS' evolving framework to upgrade programs, putting more content online each year and creating GM University,a corporate learning portal.

Another example is SmartForce, Redwood City, Calif., a 17-year-old firm that recently made a name for itself as an

e-learning ASP. SmartForce has invested more than $100 million in the past three years on an infrastructure dubbed My SmartForce. The customizable platform leverages tools and learning-management system technologies from some 20 vendor partners and goes to market via a channel of approximately 60 partners worldwide.

"It's all about personalization and customization, not just distributing off-the-shelf content," says Devon Lynch, vice president of SmartForce partner sales.