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At Corporate Training High, e-learning is the cool kid, the smart kid and the class bully all at once. It’s better looking than traditional classroom learning, it gets better grades than nerdy computer-enhanced teaching systems, and everyone in the skills-training market is handing his lunch money to the newest kid on the block.

Electronic learning—educating employees using Web-enabled materials deployed via the Net—offers in its most sophisticated incarnations such bells and whistles as streaming audio and video, built-in PowerPoint presentations, hot links to related information on the Web, animation, flip books and self-running screen-capture display programs. E-learning is significantly cheaper and more productive and can be delivered with more timeliness than either classroom learning or traditional computer-enhanced teaching, practitioners say.

For these reasons, e-learning will account for almost half of the projected $16.9 billion business skills training market by 2004, while growth in CD-ROM, videotape and satellite training will slow considerably, according to Cushing Anderson, program manager of learning services research for market analyst IDC (a sister company to CIO’s publisher, CXO Media) in Framingham, Mass. "People are spending a relatively stable amount of money on training," he points out, "but the outsourcing component of that is growing at 12 percent or 13 percent total, and almost all of that is spent on e-learning. The growth in this market is in e-learning."

But just like the high school friend with the car and the trust fund, e-learning can be high-maintenance as well. It needs bandwidth and server space that many companies aren’t willing to devote to an activity that makes good sense but isn’t, truth be told, a moneymaker. Many training and HR departments, which traditionally have been the overseers of employee learning, resolve e-learning’s resource demands by outsourcing the entire proposition, including the hosting, delivery, scheduling and tracking of training modules, leaving the IS department completely out of the loop—often with the CIO’s explicit or tacit approval.

Electronic learning is a good teaching tool, corporate training specialists say, but companies shouldn’t be lulled into believing that e-learning can teach all things to all people. When the stakes are high (as with team-building) or the subject is highly personal (as with coaching) then real live teachers are still irreplaceable. And while it works to outsource e-learning, that might not be the case in coming years, according to IS managers. As e-learning systems become more technologically complex and more integrated into other corporate functions like personnel management, in-house IS departments may have to play a heavier role in e-learning deployment and maintenance.