Driven by the need for organizations to keep up to date on compliance regulations and training, corporate e-learning is on the rise. Today’s corporate e-learning, however, has evolved into something that goes above and beyond compliance training to embrace numerous learning types. This new, blended e-learning is gaining popularity as more management executives realize that the knowledge their employees have is the asset that is most important to the success of their organization.

E-learning promised to deliver faster learning more consistently to more people than traditional classroom training could. It has succeeded first through computer-based training, and then through web-based training into what has become the broader umbrella of e-learning.

Although touted in the early 2000s as the replacement for traditional classroom training, online learning alone didn’t work for everyone, because it failed to address individual learning styles. Moreover, some content lends itself to self-paced learning, some to online learning where you hear and see the data, and some to face-to-face encounters. “To say it can all be done using one method or another is unrealistic,” notes Claire Schooley, senior industry analyst for Forrester Research in San Francisco.

“Even a carpenter doesn’t live by his hammer alone,” adds Will Hipwell, vice president of marketing for GeoLearning, Inc. in West Des Moines, Iowa. “You need to use the right tool for the job at the right time. And that’s what e-learning is — one of several learning tools that should be found in a training manager’s toolbelt.”

The rest of the industry seems to concur. Today e-learning encompasses online self-paced courses, online virtual classrooms and, at times, traditional classrooms, as more organizations move from departmental to enterprise-wide e-learning. The coursework can include web-based seminars and classes, downloadable content, CD-ROM content, video content, live instruction in classroom settings, and online forums and chats. This blended learning environment is further combined with an organization’s human resources, accounting and e-commerce departments to streamline administrative tasks.

“E-learning systems are not simply about delivering training; smart companies want to know what was learned, by whom, and what impact it will have on the bottom line. Think of what we provide as an air traffic control system for learning,” explains Bill Perry, director of public and investor relations for SumTotal Systems in Mountain View, Calif.

Becoming Mission-Critical Gartner reported that new license revenue for e-learning suites and management systems software grew 12.2 percent in 2004. The market research firm expects new-license revenue for enterprise e-learning suites and management systems software to grow at a 15.6 percent compound annual growth rate from 2004 to 2009. Specifically, Gartner forecast business-focused e-learning to grow 16.7 percent annually worldwide from 2003 through 2008, and to more than double in size to $619.4 million in new-license revenue by 2008.

Those numbers indicate that e-learning is becoming a mission-critical element of business and employee performance. “One of the drivers for this is that critical business initiatives are dependent on well-trained people who are able to learn and develop as needed,” explains Vicki Morris, vice president of marketing for e-learning software vendor Saba in Redwood Shores, Calif.

“Linking learning with a company’s business objectives is job one for executives and training pros these days,” adds SumTotal’s Perry. “Savvy employers are increasingly tapping into e-learning to do everything from educating employees about the launch of a new product to delivering specific courses to boost workers’ skill sets.”

Technology-savvy employees are also playing their part in integrating work and learning by proactively seeking the learning they need in order to get up to speed on their jobs. Employees “can find the learning they need to take right now in order to be able to do their job,” says analyst Schooley.

As an example, she cites Cisco Systems, where 60 percent to 70 percent of learning is done online. “A new employee spends the first two weeks on the Web site going through the components he or she has to learn about,” Schooley says.

Driving Factors

Organizations are turning to corporate e-learning for a number of reasons. One of the most significant reasons is the ability to gain knowledge without traveling to a central location, which results in cost and time savings. “e-Learning is a way to beef up the skill set of a team without bringing all the members to a central location for training,” Perry acknowledges.

That was the driver behind Geisinger Health System’s adoption of an e-learning solution. “Staff were traveling up to two hours each way in some cases,” explains Jack Latshaw, assistant director for technology education services in Danville, Pa. “That was time away from patients.”

The health system implemented SumTotal Enterprise Suite to provide training to its 39 counties in Pennsylvania. “With e-learning, we’re able to wipe away geography as a barrier,” Latshaw adds.

Another chief reason for the move to e-learning is the promise of access to just-in-time information and instruction, as Schooley indicated. “It gives companies the power to tailor learning to solve specific problems, on demand,” adds Perry. This also allows for small chunks of information rather than bites that are too large to chew.

Some of the other incentives for organizations moving to corporate e-learning include the speed with which it enables organizations to compete, as well as access to large numbers of employees, partners and customers, convenience, consistency across the country, and context. In addition, e-learning helps organizations address regulatory compliance, certification, sales and channel readiness, customer education, and the evolution of the corporate university.

“Done correctly,” says GeoLearning’s Hipwell, “e-learning programs can also ensure that an organization effectively plans, manages and generates ROI from its investment in human capital.”

“E-learning costs are one-third to one-fifth those of traditional classroom training,” declares Waldir Arevolo, Gartner’s research director in Brazil. “The savings come from eliminating such costs as the time workers have to spend away from their jobs. Workers take 20 percent to 40 percent less time to complete e-learning courses than comparable classroom training, so workers lose less time learning new skills,” he adds. Other cost savings, he continues, include employees’ travel to a training center, course or conference fees, fees for hiring instructors, and maintenance of training labs.

Making an Impact

At Mitel Networks, an Ottawa-based communications firm, training has grown from an average of 3,600 enrollments per year to 45,000 per year since implementing Saba’s Learning Suite, according to Lynn McCormick, manager of HR and training systems.

The firm began offering e-learning back in the 1990s when it introduced a virtual classroom to deliver distance learning. E-learning provides consistency across the organization’s global geographical dispersion. “Since 2001, we have been offering blended learning including self-study as well as leader-led and online Web-based training,” McCormick acknowledges.

Prior to 2001, Mitel had two separate homegrown applications for tracking students’ training with minimal online testing capability. “There was no global view of training, because the systems were disparate. Many processes were manual, from administration through to students having to fax back tests for marking and wait for certificates to be mailed to them,” McCormick says.

Today, however, by offering a blended learning approach, Mitel is able to address various learning styles and offer training options that fit customers’ business requirements and budgets. “With the additional training being offered today, we are seeing reductions in calls for product support, because our customers are more easily able to keep their skills updated through e-learning,” she notes.

The need to train thousands of employees in hundreds of locations throughout the country led National City Mortgage (NCM) to embrace corporate e-learning. The firm also needed to deploy training to everyone in the company simultaneously and rapidly and to be able to monitor and track results.

The company turned to GeoLearning’s hosted GeoMaestro Learning Management System (LMS) because it lacked the internal resources necessary to support an e-learning solution itself, according to Susan Fair, Dallas-based vice president and training manager. The ability to track and report results was the key criterion on NCM’s vendor selection list. “We also needed a vendor that could provide in-house courseware development as well as off-the-shelf courses for general computer training,” Fair adds.

Since implementing its e-learning suite, the company found that “the volume of training has increased, and reporting is easier and more accurate, because all training records are centrally stored on the LMS,” Fair says.

In addition, the company has developed numerous job-specific courses that have both added to its bottom line and fulfilled regulatory requirements. “Courses with content customized for our business processes have significantly increased usage of the LMS and generally show a higher ROI than generic off-the-shelf courses,” Fair comments.

Omaha-based transportation company Union Pacific, with a dispersed population in 23 western states, first embraced corporate e-learning in the early 1990s but still lacked a centralized distribution method. The desire to facilitate the regulatory training and testing of a non-exempt segment of its population led the organization to Plateau’s e-learning application, currently Plateau 5.5.

“Having a centralized solution available that is robust enough to support key safety initiatives was at the core of the business case for licensing the product,” notes Nick Ericksen, Union Pacific’s director of technical training. “We have embraced interactive distance learning using satellite downlinks to various locations and have used synchronous web solutions to address the issue of getting a consistent message to a dispersed audience in a timely manner.”

Addressing Challenges

While blended corporate e-learning has garnered much buy-in, it still has some hurdles to get over. For one thing, self-paced e-learning requires discipline. “I’ve got to figure out when in my work day I’m going to do that learning,” explains Forrester’s Schooley. “We’re not used to learning when it’s right for us. We’re used to having to go to a class at a specific time.” One thing that helps address this challenge is strong support from executive managers.

Additionally, if no real portability or mobility is offered in the e-learning initiative, that too can lead to a lack of motivation for users. As a result, people will prefer previous effective resources such as workbooks and instructor-led training.

Reduced social and cultural interaction poses another challenge. E-learning can leave employees feeling isolated. “Collaborative technologies to support e-learning, such as virtual classrooms and web conferencing, can ease that problem,” notes Gartner’s Arevolo. Another thing that needs to be addressed is the variety of people in the workforce. They may be close to retirement, but some employees have not grown up with computers and technology and have tended to adopt it very slowly. This can be overcome by walking them through the process at a brown-bag lunch, for example.

Other drawbacks abound. E-learning requires coordination among IT, HR and training, and that isn’t automatic, notes SumTotal’s Perry. “If the infrastructure and alliances aren’t in place, e-learning can flop,” he contends.

Although corporate e-learning promises to save money and time, ironically the lack of both can deter companies from adopting it upfront. “For a corporation to implement a true e-learning solution and gain real benefits, it must spend the time and money necessary to implement an appropriate solution,” advises Ed Cohen, chief technology officer for Plateau Systems in Arlington, Va.

Other challenges include legacy content conversion, selective use of e-learning and change management. Adoption also varies geographically based on culture. Latin America, for instance, has rapidly adopted e-learning; France, however, is slow to hop on the bandwagon, because learners there prefer face-to-face contact, according to Saba’s Morris.

Looking Ahead

Despite the numerous challenges presented by corporate e-learning, it is here to stay. “We’re going to see enterprise learning management platforms become just as crucial to an organization’s success over the next 10 years as we now deem similar enterprise systems for accounting, CRM, distribution and communication,” predicts GeoLearning’s Hipwell. “We won’t be able to compete effectively without them.”

Saba’s Morris anticipates that collaboration will become more important as learning evolves. In addition, she says, ”E-learning will become more accessible, more embedded and more contextual for people in the extended enterprise — employees and contractors, customers, suppliers and partners.”

Blended and learner-centric e-learning will continue to grow, forecasts Forrester’s Schooley. Market consolidation, such as Saba’s recent acquisition of Centra and SumTotal’s acquisition of Pathlore Software, will also continue.

In addition, “E-learning will be multimodal, more interactive, immersive and better aligned to people’s context,” predicts Gartner’s Arevolo. Gartner further predicts that by 2008, immersive “edutainment” techniques such as simulation and gaming will be used in more than 20 percent of corporate e-learning, and that by 2010, offline capabilities and personally owned mobile devices will be the leading problem for e-learning leaders, Arevolo notes.

“There’s a whole generation of workers entering the job market who are attuned to sophisticated video games,” explains SumTotal’s Perry. “The simulations in these games can be great teaching tools. So the people who design e-learning courses now and into the future will have to engage learners with more simulations.”

Robyn Wright is a technology writer based in Phoenix. She can be reached via e-mail at rwright@softwaremag.com.

Keep an eye on the blackboard The higher education market also represents a growth opportunity for e-learning software providers, as indicated by Blackboard’s recent acquisition of WebCT. Individually Blackboard and WebCT were the two dominant vendors in the higher education space, according to Marti Harris, research director, higher education technology strategies for Gartner. Blackboard alone reported $135.7 million in revenue in 2005 – 67% of which came from the higher education market, according to Michael Stanton, Blackboard’s VP, investor relations. “It’s become over the last few years, a really mission-critical application on campus,” says Harris. At any university or college, she adds, “almost every course on campus will have an element of using a course management system.” This could range from delivering a syllabus online to full-blown delivery of content, calendaring, assessment, etc. The global higher education and K-12 schools in the U.S. covers approximately 31,000 institutions, according to a Blackboard spokesperson. Other contenders in this field include Desire2Learn, Angel Learning, eCollege, and two open-source options: Sakai and Moodle. Some companies seek to piggyback on the Blackboard market with related software. One example is Agilix, which offers Blackboard Backpack, communication software for a laptop that supports the mobile user. “We said let’s make a personal solution,” says Brad Baldwin, vice president of product marketing for Agilix. “It gives the student the ability to track assignments, schedules, notes and research in one place.” Noting that 16% of all laptops are sold into higher education, he says the company’s preferred distribution model is to get the higher ed institution to offer Backpack to all its students. One such win was at Seton Hall University, which agreed in the fall of 2005 to give its 4,500 students access to the BackPack application. The higher education market represents a significantly smaller number of vendors than the corporate e-learning market space. That, according to Harris, can be attributed to all of the administrative pieces already in place at institutions, such as those for handling enrollment, student information, grading and record keeping. In addition, the educational offerings have to integrate with student systems and other administrative systems so there are no “shadow” systems. Will higher education e-learning vendors cross over into the corporate e-learning space? Blackboard already has 196 clients in the corporate government space, according to a company spokesperson. “In a sense, that’s the easier part to develop,” Harris acknowledges, referring to the management side of e-learning applications. “It’s harder to go from the corporate side to the higher ed side than to go from higher ed to corporate,” she adds. While it is clear that this market will continue to grow, it will be interesting to see how it plays out, particularly as it relates to the corporate e-learning market. — Robyn L. Wright