E-Learning: Does It Make the Grade?

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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.

Fast and Flexible

Like many financial services companies, American Skandia uses e-learning to train and reskill its workforce quickly. The U.S. arm of the international savings and insurance company, American Skandia faces a number of training challenges particular to its business, says Rebecca Ray, a senior vice president at the Shelton, Conn., location. The company sells its financial services through wholesalers in the field rather than directly to the public, which poses a special challenge when it comes to educating, certifying and then continually reskilling that decentralized workforce to keep abreast of a portfolio of services that’s continually increasing in both volume and complexity. In addition, Ray points out, the savings and insurance industries are heavily regulated, and most employees must be fluent with the latest regulations.

Rather than spending days away from their desks sitting in a classroom, American Skandia employees can log in to a training website and complete materials at their own pace between assignments, before or after hours or even from their home. Distributing learning electronically lets the American Skandia wholesalers in different locations train simultaneously, eliminating knowledge lags between various far-flung units. And the live nature of Web-based learning means American Skandia can instantly update training materials to incorporate changes such as new product information or new government regulations.

Ray holds the title of director of training at American Skandia University, a project in the making that will centralize various training initiatives throughout the company. The corporate university will offer three educational options: instructor-led classes, self-study and online learning. The e-learning offerings are in turn divided into three formats, scaled for different levels of complexity. On the light end of its curriculum, the company contracted with ElementK, an e-learning vendor based in Rochester, N.Y., to provide training on basic Microsoft business software, advanced IT professional topics and the Harvard Manage Mentor series of business- and management-skills courses. ElementK hosts, tracks, tests and delivers all training data back to American Skandia, which uploads the data straight into its PeopleSoft workforce-management system.

For industry-specific training in topics like annuities and financial ethics, Ray chose Securities Training Corp. (STC) of New York City, which offers a service to track employees to ensure they’re in compliance with Nasdaq-required training elements. And for company-specific topics such as antifraud policies and internal auditing, American Skandia plans to partner with STC to develop customized e-learning courseware written in concert with various in-house experts at American Skandia.

In all cases, American Skandia employees access those vendors’ sites through an internal learning portal that’s part of the American Skandia website. The portal was developed by a cross-departmental intranet development team, to which Ray’s department had to contribute minimal man power. The role American Skandia’s info services department has in electronic learning is one primarily of advice and consent: "We worked with the folks in IS. I sat down with a pretty firm vision and plan and said, ’This is what I’d like to see happen. Can you come back and tell me what will work and what won’t?’" Ray recalls.

Having made a significant investment in e-learning, Ray still says it won’t replace instructor-led education entirely, now or ever. "E-learning is not a panacea," she warns. "An information dump on Microsoft Office is perfect for online. And that frees us to deploy experts at the high end of the spectrum. When we need role-playing, coaching, one-on-one feedback, the benefit of sharing best practices still comes from a real person."

Her opinion is echoed by Dan Bartholomew, national practice leader for e-learning solutions in the San Francisco office of KPMG Consulting. "Different media lend themselves to different learning events," he says. "If you need a team-building class to launch a project, you need to physically interact, and you won’t get that on the Internet."

That said, Bartholomew and KPMG are bullish on e-learning for nearly all other kinds of training. "Anytime you need to reskill yourself and learn a new function fast, those are great for Internet learning." Plus, he points out, instructor-led training is only as good as a given instructor and student are on a given day in a particular classroom. By contrast, e-learning is consistent, controlled and scalable to individual learners’ styles, meaning that students can work in chunks of time that suit both their temperament and schedule. Finally, e-learning is eminently trackable on the back end, so training centers can assess students’ interaction and competency at whatever level of detail they choose. "With e-learning, you can determine a real ROK—return on knowledge—rather than being dependent on the instructor’s or the student’s impressions to know how effective your training is," Bartholomew says.

KPMG is also bullish on advising its clients to outsource e-learning (with, of course, help from a consultancy like KPMG). That’s a standard stance in the world of corporate training: Companies like Deutsche Bank, People’s Bank and Continental Airlines have partnered with outside companies to develop, host and track part or all of their e-learning initiatives for a wide range of reasons.

Most corporations, even those with larger in-house training sites, don’t have employees with the mix of skills needed for effective online curriculum design. Training departments are often reluctant to take on the administrative burdens of registration, scheduling, tracking and results analysis, features that are included in many e-learning packages, particularly those hosted by ASP-type vendors. Many companies aren’t willing or able to allocate bandwidth to a noncore function like corporate training. And most companies simply couldn’t get a homegrown program up and running in anywhere near the time an e-learning specialty company can.

"We deploy our solutions within a week or two and, in some cases, within a day," says Pete Goettner, president and CEO of San Francisco-based DigitalThink, one of the larger and more well-established players in the burgeoning e-learning marketplace. "Companies don’t want to be specialists in e-learning. CIOs have their plates full already," he says. "Training departments are looking for solutions that don’t impact IT, so they turn to a high-level service provider like DigitalThink"—or one of the many companies competing for DigitalThink’s business, including ClickToLearn, NetG, Ninth House, SmartForce and Saba.

Boston’s Northeastern University contracted with vCampus, an e-learning company based in Reston, Va., to host Network Northeastern, its online university that has some 1,200 students enrolled nationwide. Professors rather than Web designers are responsible for the presentation of their classes online. And while the bursar’s and registrar’s offices at Northeastern have some interaction with the vCampus system, the university’s IS department has none at all. "The other computing demands here are massive," explains Susan Kryczka, the director of Network Northeastern. "I think we’re like most universities, where the information services groups don’t have the man power to handle another project. Their first responsibility is to research faculty and on-campus students."

At least one industry analyst thinks corporate America should follow suit when it comes to the IS staff’s involvement with e-learning. "Most companies shouldn’t be doing e-learning in-house, and IS doesn’t need to know a thing about it," IDC’s Anderson says. "IS should stick to things that are core to the business, banking applications or e-business initiatives or whatever."

Involving IS

But as e-learning technology grows ever more sophisticated, some CIOs say they’d be open to bringing some, or even all, e-learning work in-house someday. New York City-based Deutsche Bank, for example, has seen an evolution in its approach to e-learning. When the bank teamed some of its in-house subject experts with DigitalThink consultants last year to develop nine custom courses covering topics like financial products, regulations and compliance, IS’s involvement was minimal. With DigitalThink hosting the courses externally and handling all registration and tracking requirements, IS needed only to contribute a technical liaison who encrypted passwords and checked security issues, bandwidth and connectivity demands, according to Adam Girard, the vice president responsible for the online learning center for the bank’s global technology and services department. "It was a due diligence process. Since 90 percent of what we were doing was external, we needed very few interactions with the technical staff," he says.

That plan sits well with KPMG’s Bartholomew, who says he tells clients that information services should be involved initially so that consultants and vendors alike can get a good understanding of a company’s long-term infrastructure blueprint and map out their training plans accordingly. "It’s good to know everything you can about the infrastructure: capacity, caching devices, what upgrades are planned and when, and what network distribution traffic controller they have in place," Bartholomew says.

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