When eLearning came into being through its early predecessors in the form of CBT and then WBT one of the primary reasons and its drivers was increasing acceptance of its potential to save costs due to the inherent advantages in centralizing (more with WBT) content, the reduction in logistics costs, persistent storage and to an extent uniformity in content delivery. It soon caught on as a medium which is now used as a part of learning strategy (in context of workplace learning) and not only helped companies save costs on a recurring basis but it evolved as a ‘learning’ delivery medium.
As an industry, eLearning has witnessed significant growth over the past years. Then the recession hit and not only did it disrupt the continuity of growth and momentum in the industry, but as I see it, even when fading away it poses another threat to eLearning industry. I will explain how.
If the only thing the last 15 months or more of the cruel downturn has taught more companies than anything else, it is the need to be cautious on cash (and costs) front. Tremendous pressures were put on companies to save on costs (and continue even now, while a little milder) and more so to generate more value at the same cost. These pressures led organizations to react in varied ways – downsizing, rightsizing, blanket budget cuts, even training cost cutting, across the board salary revisions, etc. On one hand while the pressure to reduce costs kept on increasing and still is a reality, on the other there was also a burning need to upskill and reskill employees to generate more value and productivity.
This mix of cost pressure and need to still keep an eye on training to survive and grow beyond the recession phase, in my belief, started the second wave of adoption of eLearning. Over the past few years, as the industry was maturing, the focus was slowly, but firmly, moving towards producing learning solutions that impact performance and dollar numbers, this second wave could have a pull-back effect, potentially.
In the last few months (6 to 9 months) we (as a solutions provider) have seen an increase in inquiries focused on adopting eLearning primarily to compensate for the budget cuts and to reduce overall training costs. This is where my concern stems from. There are cases where the customers are looking for something quick, dirty and of course inexpensive. That these cases are increasing in number is a matter of concern, primarily for two reasons:
- If such demand keeps increasing (and I believe as effects of the recession continue to get milder it will) there could be a surge in solutions which are good from a cost perspective but not from a ‘learning’ perspective. This could undermine or distract from the progress and advancements the industry is making in coming out with innovation and solutions to enhance learning in self-paced environments.
- As more such solutions sell it would take another level of effort to evangelize and educate customers on the true value and potential of eLearning. This seems like going back a few good years and that isn’t good.
While I am confident that the recession is definitely proving and will continue to prove a booster in terms of revenue growth for learning solutions providers, I am also worried that it has the potential to erode the true value to some extent.
The bright side is that more companies are now able to produce excellent quality eLearning at costs lower than before and will still be able to offer good value at low cost striking the right balance. However a challenge still remains on the other front. How big this challenge will be only time can tell. As a company that provides high quality solutions we are pushing Innovation and development to ensure that we don’t fall into the trap (for the lack of a better word).
I’d love to hear more about this and how others feel about this situation. I’d really like to hear and conclude (hopefully) that most of my concerns are unfounded.
March 24th, 2010 at 11:36 am
In most organizations, training is viewed only as a cost center; and more often than not when it’s time for “Cost-Cutting” training usually bears the maximum brunt.Atleast this holds good for the Financial Services industry of which i’m a part.
What are a few things that elearning & training professionals can do ?
1)After a project, ensure that you publish a post-project report and do a quick satisfaction survey and forward it to the “People who matter”
2)Develop the programme in such a way that it impacts the bottom line. If it’s a sales organization, the programme needs to impact increased sales numbers. If it’s a BPO the programme needs to impact customer satisfaction scores and so on..
3)Try to obtain data regarding performance metrics before the course/programme and compare it with data regarding performance metrics post the course/programme. If we can prove with facts & figures that we have contributed to the bottom line, the clients are more likely to look at e-learning as a “value add” as opposed to a cost cutting tool.
In conclusion, if we impact the bottom line of the clients – the future continues to look bright.
March 24th, 2010 at 2:02 pm
I think the trend started much before recession, with practically zero entry barrier for starting to put something together that can run off the web, and the image in many customer’s minds that elearning is nothing more than converting training manuals or documents into web pages and making them look pretty. And as folks in the industry we don’t make things easier for ourselves by continually claiming how an hour of elearning can be done in less than $100, or worst, create elearning at no cost or become an elearning pro for free.
As elearning professionals, we need to understand what value we bring to learners and how elearning can truly help in solving business problems (and not just the cost problem). In my view we need to value ourselves and then demonstrate that value to customers/stakeholders.
The need to learn is truly recession proof. What we need to learn and how we learn is continually evolving. And that’s what we need focus on.
March 24th, 2010 at 6:14 pm
As a learning and social software vendor we too see prospects and customers who are looking to create inexpensive eLearning to compensate for budget cuts and reduce overall training costs. Unfortunately for these folk, this approach sometimes have unforeseen repercussions that severely limit the overall impact learning can have on their organization.
But we also see the encouraging trend of Learning & Development groups saying enough is enough. They realize that to avoid the fear, uncertainty and doubts of potential budget and staff counts they must be far more proactive in providing learning in support of their organizations’ key initiatives. They are connecting directly to their senior and looking to support learning in every form required: classroom, elearning, socially, performance support, and through mobile extensions.
These companies reach out to OutStart and other vendors to utilize learning content management technologies to develop, manage, maintain and deliver learning content once, (what we call “single source”). Once created they can then easily deploy it for different courses, in different delivery modalities (e.g. classroom training materials, elearning, performance support and the like), and in a personalized way (based upon role and/or knowledge level). These companies are also tapping into social technologies to augment formal learning initiatives through collaboration and support tools.
The recession is also forcing companies to examine current investment and leverage those where possible. An example of this we frequently see is in the use of mobile devices. These companies have already purchased phones or are supporting them for employees, so why not take a look at how to extend learning through these devices in the form of mobile performance support, surveys, assessments or key communications from executives.
Although these proactive teams must still deal with budgets and staff constraints, rather than being fearful of the budget and staff axe, they appear to be far more enthusiastic about their future and are expanding their influence. I’m not sure if I’ve reassured you that your fears are unfounded, but this is our perspective. Like you, I look forward to hearing what others say on this subject.
March 25th, 2010 at 1:09 pm
@Aneesh. Aneesh I agree with you on the training facing cost pressures more than other areas in a company. Also thank you for the thoughtful tips for the elearning professionals.
However, the three points you mention are not possible to execute for a solutions provider without the approval and willingness of the customer’s training team. If the customer continues to view it as a cost only then its practically impossible for the solutions provider to be able to measure effectiveness – solely because the whole exercise is not geared towards achieving something in the first place.
However what you mention, if done, will ensure that the delivered value of (e)learning is visible and also is positive (but for that there is one more step in the beginning – define learning objectives and outcomes clearly).
March 25th, 2010 at 1:44 pm
@Manish. Rightly said about the trend being there. Though it may not be entirely due to the low entry barrier but primarily because the value of eLearning itself is not clearly visible and understood. Since cost-savings was the first obvious and important side effect of converting training to computer based (and now internet/mobile driven) that caught on more than anything else.
In fact the events of last 15 months or so of financial downturn and crisis have definitely put focus on hiring and retaining skilled professionals who can deliver more with less. This will eventually lead to better and clearer training processes and those that are focussed on actually ’skilling’ and not just to cut operating costs. As companies continue to understand the trade-off between short term and long term training focus the learning solutions will need to fall in line and deliver value. Those who are doing that and can keep on doing that will survive that wave, rest will gradually perish if they don’t adapt.
March 25th, 2010 at 1:57 pm
@Jeff. Thank you for responding to my fears. Your comment does make good points and as an organization we are also on a similar line of thinking when it comes to developing learning solutions or working with the customers. As you rightly said, its important for the customers to appreciate the trade-off between quick and dirty solutions and well-planned and designed solutions.
Very interesting point on the mobile front, specially with investment already being done on the handsets, I think its smart for the customers to utilize the advances happening in mobile learning domain and make use of this strong medium.
It is a two-way street and both the customers and providers like yourself and us would need to continuously work on better learning solutions. Independent research companies in the field of eLearning are already doing excellent work in bridging this gap by way of research, insights, surveys, awards, conferences, seminars and multiple other channels.
March 26th, 2010 at 12:12 am
I see a disconnect between the evaluation parameters of the purchase department (yes, you read it right) and the training department. No points for guessing purchase department’s focus. The training department would like to get a good solutions but is overruled by the purchase department and policies of x number of bids from different vendors. How would they ever know the difference between the solutions different vendors are providing when evaluating proposals on costs alone? The fact remains that in some companies eLearning is bought by ‘Purchase’ so ‘learning’ is only a secondary need, sadly.