Lessons From the Virtual Classroom

By Baselinemag  |  Posted 2004-06-08 Print this article Print

E-learning software can let organizations more efficiently manage their training and enable them to offer tutorials over the Web. But there are some dangerous pitfalls on the way to the electronic university.

E-learning software can let organizations more efficiently manage their training and enable them to offer tutorials over the Web. But there are some dangerous pitfalls on the way to the electronic university.

Kinko's learned the hard way that replacing human instructors with a Web-training system would require a major shift in the way its managers and employees interacted with each other. The Dallas-based chain—now called FedEx Kinko's Copy and Print Services after FedEx acquired it this year—shut down most of its instructor-led training program in October 2001 to cut costs. Pete Premenko, Kinko's learning-technology program manager, headed the team that scrambled to get an e-learning system into place as quickly as possible, and in the spring of 2003 the company launched one based on Saba Software's learning-management package.

The system initially offered a catalog of 2,700 courses and was supposed to let 20,000 employees at 1,100 Kinko's locations log on and learn about everything from word-processing software to specialized printing equipment, as well as more general topics like human-resources policies. Like other learning-management systems, it would let the company organize and schedule all of its learning activities, whether offered online or by instructors (Kinko's kept about 10% of its offline training), as well as track employee progress. Saba even provided tools to create and publish Web-based training content.

But the Kinko's e-learning team realized belatedly that it should have offered some basic training on the software itself. "We never fully told people how to use the system," Premenko says. "We thought, 'It's Web-based. It's intuitive.'" The major problem: The system included no information about which of the 2,700 training courses an individual employee was supposed to take.

Eventually, Kinko's started grouping courses together into "curriculums" that are defined based on job function. It also pared down the number of courses, to 700 today, and replaced some generic, off-the-shelf content with 80 hours of new-employee training designed for its stores. In addition, Premenko and his team have customized the system's opening screens to be organized in a more logical way. "It was painful, but it just took time," he says.

As was true for Kinko's, the cost justification for rolling out an e-learning system traditionally has been to reduce—or eliminate—the expense of providing in-person instruction. That's an especially big lure for organizations in heavily regulated sectors that constantly need to train employees to comply with government rules.

DTE Energy, a Detroit-based electric utility, spent $400,000 on an e-learning project built on Plateau Systems' learning-management system, a price tag that includes custom-developed content. The system primarily provides online courses to 8,000 workers who must be regularly certified on specific skills by government agencies, including the Occupational Safety and Health Administration and the Department of Transportation. Gayle Ashbridge, DTE's director of organizational learning, says the Web-based system is expected to save as much as $3 million per year on travel costs associated with the mandatory classroom-based training the utility used to provide. "This is easily paying for itself," she says.

Another key part of e-learning's appeal is that it allows "self-paced learning": Bob from Accounting, for example, can get up to speed on new tax regulations from his computer instead of wasting time covering old material in a conference room. "In a classroom, you might already know 50% of the material—but you can't just walk away in the middle of the class," says Nick van Dam, chief learning officer at Deloitte Touche Tohmatsu.

While learning-management systems can streamline the training process, though, they are not simple pieces of software. "E-learning is much more complex than you could possibly imagine," says Rick Williams, Fidelity Investments' vice president of investment education.

The mutual-fund company took well over a year to bring its Web-based tutorials online for 401(k) customers. Among the holdups was that Fidelity needed to link its 7 million-user account system with the learning-management software from Click2learn (which this year merged with erstwhile competitor Docent to form SumTotal Systems). However, the information-technology group wasn't brought into the project until halfway through, Williams says. "We needed to line up our internal groups earlier," he says.

That raises another sticky wicket: Training and information-technology departments sometimes tussle over who owns an e-learning project, which can lead to unrealistic deployment expectations. "It's the training executive who makes the decision about a learning-management system," says Josh Bersin, principal of consulting firm Bersin & Associates. "But training people tend to be very unsophisticated about I.T."

Entering the mix now are enterprise-resource planning software vendors, such as PeopleSoft and SAP, which sell e-learning extensions to their human-resources systems—and they see their existing relationships with the information-technology side of the house as a foot in the door.

"At the end of the day, the I.T. organization enters the process and says, 'Why are we buying these one-off solutions for e-learning when I already have PeopleSoft?'" says Tom Kraack, managing partner of Accenture's learning practice.

The ERP companies aren't yet major players in the learning-management systems market. The pure-play providers say that's because the bigger competitors don't provide the depth of features enterprises need. "This is an industry that requires focus," says Kevin Oakes, SumTotal's president.

But it's just a matter of time until the likes of PeopleSoft and SAP start capturing share, says Carrie Picardi, an analyst with Meta Group: "The big guns with solutions that are 'just OK' are going to be serious competition for the smaller companies."

E-learning software can let organizations more efficiently manage their training and enable them to offer tutorials over the Web. But there are some dangerous pitfalls on the way to the electronic university.

Group Dynamics: Learning-Management Systems

What It Is: Software that delivers online courses, allows individuals to register for and schedule training, and provides tools to track employee progress and specify training requirements.

Key Players: Oracle, Pathlore, PeopleSoft, Plateau Systems, Saba Software, SAP, SumTotal Systems, Thinq Learning Solutions

Market Size: $350 million for learning-management software in U.S., 2003 (IDC)

What's Happening: Vendors are enhancing performance-management features, which help assess skills and track employee development. Meanwhile, enterprise-resource planning software players are stepping up their push into the market.

Expertise Online: learningcircuits.org, hosted by the American Society for Training and Development, provides articles and discussion forums on e-learning.


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