e-Learning: Hype or Reality? - Management
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e-Learning: Hype or Reality?

Written By Catherine Connolly

Article Date: 02-01-2005
Copyright (C) 2005 Associated Equipment Distributors. All Rights Reserved.

A shift has occurred in the way education is delivered within companies.

In 1999, as e-Learning was growing in popularity, Cisco CEO John Chambers said, "Education over the Internet is going to be so big, it's going to make e-mail usage look like a rounding error." 

In the years that followed, organizations that had no instructional background or technology experience jumped into the e-Learning market in an effort to cash in on what was expected to be a $25 billion market. 

Now that much of the hype has died down and the industry has distilled to fewer, more qualified vendors, we can take a more realistic view of e-Learning and examine how and analyze how widely it's being implemented and how it's affecting the bottom lines of the companies that use it.  

According to the recently released 2004 American Society for Training & Development (ASTD) Annual State of the Industry Report, 29 percent of a broad cross section of U.S. organizations with an average of nearly 7,000 employees will use technology to deliver learning. This is up from 8.4 percent in 1999, the year it was first measured, and corresponds with the declining trend in classroom training offered by this size organization - from 80 percent in 1999 to 68 percent in 2003. 

Likewise, ASTD reveals that 35 percent of larger Fortune 500 companies and public sector organizations with an average of approximately 100,000 employees currently use technology to deliver instruction. The statistics for traditional classroom training also show a downward trend for these large organizations, from 78 percent in 1999 to 61 percent in 2003.

Driving Factors
While we can clearly see a trend toward adoption of technology-based training initiatives, it's important to understand the factors that are driving the increased usage. For businesses, the competitive advantage hinges on gaining up-to-date information and having a well-trained workforce. 

As such, a basic paradigm shift in the way education is viewed and delivered within companies has occurred. No longer are corporations viewing training as a costly annoyance, but rather it is now considered by most to be an essential and competitive weapon. To remain competitive, companies must value their employees as their most important assets and have begun to embrace a philosophy of lifelong learning. 

Jack Welch, former CEO of GE said,  "An organization's ability to learn and translate that learning into action is the ultimate competitive advantage."

Within the corporate training market, a tremendous push for technology-based education has taken place. Many factors can be identified as fueling this demand for more-effective and efficient education and training, including changes in the complexity of the work environment. Employees are under pressure to process more information in a shorter amount of time, as production cycles and the life spans of products continue to decrease. 

Another factor contributing to the growth of e-Learning is the shortage of skilled labor. According to PriceWaterhouseCoopers, 70 percent of Fortune 1000 companies cite a lack of trained employees as their number one barrier to sustaining growth.

Other factors driving the growth of e-Learning in the corporate training sector include:

  • Rapid obsolescence of knowledge and training  
  • Need for just-in-time training
  • Efficient means to train global workforce
  • Increases in skills gap and demographic changes
  • Demand for flexible access to lifelong learning
Bottom Line Results
A 30 percent to 70 percent reduction in training costs is the largest reward for most organizations that use e-Learning as part of their training strategy. Hard costs, such as removing the need to travel and pay per diem, are a significant factor in the reduction, as are soft costs, such as eliminating time away from the job and freeing up instructor bottlenecks.

There is also growing evidence that standardization of instruction and compliance documentation throughout an organization can foster improved worker safety, which in turn may reduce fines, accidents, workman's compensation claims, litigation, and insurance premiums. 

And more and more research points to the potential for reducing turnover, as many employees see training as a significant employee benefit. 

With an average of 30 percent of U.S. companies currently using technology to deliver instruction, perhaps it's time to examine whether e-Learning could help your organization remain competitive.

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