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E-learning
on course for strong growth
As the world's
biggest companies strive to build on the intellectual capital held within
their workforces, the value of the corporate e-learning market is set
to rise dramatically over the next few years.
According to IDC, the technology and e-business consultants, the global
e-learning corporate market will exceed $23bn by 2004 - up from $1.7bn
in 1999 - and rising at a startling compound rate of nearly 70 per cent
a year.
Executives will be offered increasingly flexible courses of lifelong learning
within their own companies as the estimated 2,000 corporate universities
expand towards some 3,700 at the end of the decade.
Academic universities - hard-pressed for cash and fired by the chance
to enter the overall $50bn so-called webucation market - will also begin
offering lifelong learning opportunities - particularly to executives.
The external provider market for e-learning to companies was first opened
up by traditional instructor-led trainers (ILT), offering IT training,
using online methods to provide courses to clients.
But that model is now changing, with the big suppliers diversifying or
finding partners to offer a wider curriculum. Niche e-learning companies
are also appearing in markets such as financial services, languages, and
telecoms.
"E-learning is changing the way corporations organise and manage
training, particularly in North America and Europe," says Sheila
McGovern, senior research analyst at IDC.
In the past, IT was delivered separately from other skills. Now non-IT
topics, such as finance, management, employee orientation, and product
information are being delivered through a common system.
However, IT still accounts for 71 per cent of the market, according to
IDC. By 2003, the global picture should be an even split between IT and
non-IT. Inside companies, these changes mean that managers of human resource
departments - and chief executives - are often the purchasers of the new
systems rather than departmental heads or IT managers.
Most of the big global suppliers are US based, including SmartForce, Click2Learn,
DigitalThink, Global Knowledge Network, NETg, and Saba. IT industry training
vendors are also driving the market, including IBM, Oracle, and HP. Pearson,
which owns the Financial Times, is also active in this sector, via FT
Knowledge, its business and management education division. Last year FT
Knowledge bought Forum, a leading US corporate training company, for $90m.
As corporate leaders try to leverage the value of their workers' ability
to learn on the job - and reskill for new ones - the internet provides
a new tool, not just a faster or less costly way of delivering the old
training programmes. "If you consider the traditional classroom approaches
used in the business world, then it could be argued that very little stays
with the person, for any length of time," says Steve Harvey, HR and
finance director for Microsoft.
E-learning - particularly so-called asynchronous or self-paced learning
- offers companies a way of delivering training in a very flexible way.
"It helps companies rethink the best way to assess, source, deliver,
evaluate, and manage the development of their staff at all levels, making
the process easier, faster and more effective," says Jane Carr, for
Skillvest.
Along with many entrants to the market, Skillvest seeks to work with companies
to ensure training adds to companies' ability to meet long-term objectives.
"The real money is in saying to a chief executive 'this is about
meeting your business objectives'. If it does not make money, why are
they doing it?" says Ken McNaught, for NIIT Europe.
"A client of ours, a major international telecoms company, saved
£1.3m on a course for one product launch by using e-learning,"
says Steve Dineen, chief executive and founder of Fuel, an e-learning
provider. "The course, which involved substantial spending on equipment,
would have cost £1.4m. Using e-learning and the creation of 'virtual'
versions of the equipment, it cost just £100,000."
The biggest suppliers now offer strategies to corporate clients which
may include several forms of delivering training and education - not just
online content.
"It is important to consider how e-learning supports or replaces
other forms of learning," says David Baty, for PricewaterhouseCoopers,
the Big Five accounting and advisory firm.
He says e-learning is well suited to deliver "know what" and
"know how", or skills-based learning, while face-to-face training
is better at teaching staff softer skills and developing corporate values.
The shape of the new market is, however, confused, both geographically
and in terms of content, and there are a series of hurdles still standing
in the way of a fully integrated e-learning industry. Language is a big
barrier, but technological advances may make expansion possible. Cathay
Pacific Airways, for example, is using a system called EKP - supplied
by NetDimensions - to train 14,000 employees. The system can handle double-byte
character set languages, such as Chinese and Japanese, as well as western
languages such as English and French.
The e-learning market has grown from the US. "North America presents
the largest potential and it will continue to account for close to two-thirds
of the market over the period," says Ms McGovern. But by 2004, Western
Europe will be a much closer second - growing at a phenomenal 96 per cent
a year. Spain will be a hard-fought market as it is seen as offering access
to Latin America. Japan will fall into global third place.
Each market provides a challenge for the bigger suppliers. Canada is a
good example, with its dual language culture and the dominance of the
mid-sized business providing resistance to one-size-fits-all products
from global players. But Canada's language problems look insignificant
to those in the Asia-Pacific region. Here, Australia is set to account
for half the region's e-learning market by 2004. Progress elsewhere could
be slow.
Another problem is the growing demand from companies for e-learning programmes
which come with full service back-up, including online live technical
support and, increasingly, tutorial and mentor services.
"Its
all about creating the community aspects you take for granted in the classroom,"
says Mr McNaught. "It's about support-mentoring, web help-desks,
expert answers, and 'pushing and pulling' the learner."
Corporate customers may look to other portals and suppliers for e-learning
products. In the UK, for example, the government has set up the University
for Industry. Through its learndirect High Street brand it is seeking
to become as ubiquitous as the Post Office. It offers learning units covering
a wide range of skills but is also signing contracts with corporates.
These include British Telecom, Sainsbury, the Royal Air Force, The Army,
and the Trades Union Congress. And the government has just announced plans
for a University for the National Health Service.
"A key benefit for smaller organisations is that they can provide
their staff with training on tap, that can be picked up and put down to
suit their time constraints," says the university. The services it
offers highlight a key concern for companies - especially smaller ones.
Training to meet individual needs may not fit corporate plans. Small-
and medium-sized enterprises (SMEs) often complain that trained employees
simply move on \ 2 6 0 a concern that is being partly met by UK government
plans to introduce "portable" training courses.
Another potentially important supplier in the corporate market are universities
- many of the the larger ones with international reputations are involved
in the early stages of constructing virtual online colleges. These are
likely to provide academic courses which may attract companies interested
in developing staff and promoting lifelong learning.
Universitas 21, a network of universities, has announced a partnership
with Thomson, the Canadian electronic publishing group, to set up a global
online university. The colleges involved have a combined operating budget
of $10bn.
Oxford University has linked up with Princeton, Stanford and Yale to set
up an elite virtual college providing internet courses for half a million
alumni - many of whom hold seats on the boards of the world's leading
companies.
For companies, the next decade will see a rapidly expanding market in
e-learning. The only cloud in the sky is the possibility that some ventures
will provide the dotcom disasters of the future.
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Source:
FTIT
By Jim Kelly |
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