Web Learning Still a Class Struggle

E-learning technology may be poised to go mainstream.
Scott LeibsMay 1, 2002

Like college deans everywhere, Rick Taniguchi knows a thing or two about the high cost of education and the need to balance student expectations against administrative realities. Having lobbied for a $4 million expansion to his “campus,” his careful cost-benefit approach will soon be put to the test.

As associate dean of learning technology at the University of Toyota, Taniguchi played an important role in the creation of the “Insight” project, the car maker’s most substantive foray into Web-based training and development to date. Beginning next month, more than 50,000 Toyota and dealer employees will have online access to 100 hours of training on everything from car repair to financial management.

Toyota has offered Web-based training to some workers for more than a year, through a hodge-podge of systems that have grown increasingly costly and burdensome to administer. By centralizing and standardizing these efforts, Taniguchi says that the company can earn back its investment in just two years.

On Course

While computer-based training is at least 20 years old, the advent of the Internet has triggered what Gartner analysts Kathy Harris and Jim Lundy call the “hyperadoption” of E-learning. They say that by 2005, E-learning will be the single most-used application on the Web. Not all of that will be corporate use; primary, secondary, and higher education will also tap the Web extensively, as will government entities. But corporate investment in E-learning will grow, they say, from $2.1 billion last year to $33.4 billion by 2005. Another IT consulting firm, Meta Group, says that 60 percent of companies will deploy E-learning systems over the next two years.

Genuine E-learning is not the same as using the Web to retrieve information. As practiced at the corporate level, E-learning encompasses several distinct technologies or business practices. At the heart of most companies’ E-learning programs is a “learning management system” (LMS), software that acts as a course catalog and registrar’s office rolled into one. Priced from $250,000 to $350,000, an LMS provides a repository of information about course content, the ability to enroll employees in courses and, more important, a range of information pertaining to employee development: who has taken what course, how they’ve fared, whether they are working toward professional certifications or taking the course as part of a career-development plan, and so on.

“Authoring” or content-creation tools are used to develop Web-based courses or translate courses developed for classroom or other use into Web-ready versions. Web conferencing and collaborative technologies can be added to the mix so that the experience of Web-based learning is as interactive and, where appropriate, team-based as possible. And a host of companies provide professional services to tie these disparate elements together.

Proponents of E-learning claim the technology can yield impressive returns, from obvious savings on travel to harder-to-quantify benefits such as better customer service and a more-productive employee base. But they often face skepticism on the part of senior managers, who balk at the high price and wonder why current methods of training don’t suffice.

At Toyota, Taniguchi says his team had to do an enormous amount of analysis to win funding for the project. Car makers are logical candidates for such systems; in Toyota’s case, the E-learning system will not only help educate thousands of internal employees, but also tens of thousands of workers at its dealers, everyone from mechanics, who must be kept apprised of repair information, to salespeople, who need to know how to position Toyota and Lexus models against competing makes.

Toyota picked Vuepoint Corp. to provide an integrated LMS and set of authoring tools in part because it believes it can save $1 million a year simply by standardizing on one company’s technology. Toyota develops many of its E-learning courses in conjunction with various third parties, which tend to create them for different technology platforms. Now they will all develop courses to work with Vuepoint’s technology. And Toyota will reduce administrative overhead by using the Vuepoint LMS to enroll and track employee education, versus dozens of databases and related systems today.

Learn to Earn

But that ability to centralize functions, which is a major E-learning selling point, is also a hurdle. At many companies, employee training and education take place in many different business units, from marketing to service to field sales. The human-resources staff is often involved, but usually only on issues pertaining to employee hiring and orientation. Many companies talk about “human-capital development” and the importance of “lifelong learning,” but to date few have put significant resources behind the rhetoric. In fact, employee education is one of the first areas companies cut back on any time money gets tight.

Tom Kelly, vice president of the Internet Learning Solutions Group at Cisco Systems Inc., says that companies need to bring a different attitude to E-learning. “CFOs have to understand that an E-learning system can provide the infrastructure for all kinds of collaboration and communication,” he says. Having made almost 100 acquisitions over the past several years, Cisco uses the Web to broadcast speeches from senior executives and provide other information that can make all those new employees feel a part of the team.

Ara Ohanian, founder, CEO, and president of Vuepoint, says companies need to understand that E-learning is not simply an HR tool to bring employees up to speed, but a means to boost revenue by creating a smarter sales force. “Companies spend up to 10 times as much to support new products and services as they do to support traditional training,” he says. “E-learning can play a huge role in new product rollouts. If you can use sophisticated Web content to quickly get thousands of salespeople well versed on how to position your products against a competitor’s, the impact is tremendous.”

E-learning analysts and corporate practitioners are unanimous in saying that E-learning is in its infancy. But they also agree that it should be viewed as a new strategic opportunity, not merely an extension into cyberspace of current approaches to training and education. It may, in fact, rejuvenate “knowledge management” by providing a badly needed focal point around which those fuzzy concepts can adhere. “The term ‘knowledge management’ may be passé,” says Doug Johnson, CFO of E-learning company Thinq Learning Solutions Inc., “but the concept is still valid: we are in a knowledge economy, and E-learning is emerging as a way to respond to that reality.”

Room with a Viewer

A technology known as Web conferencing is often at the heart of Web-based E-learning programs, but it can facilitate almost any kind of online interaction. Even before September 11, Web conferencing was identified by IT analysts as a fast-growing market segment; after 9/11, its usage reached a new plateau, and the stock prices of the publicly traded companies in the sector rose by an average of 30 percent.

Web conferencing provides a virtual workspace in which almost any number of people can meet; communicate via text, voice, and, increasingly, video; share documents and other presentations; vote (in a virtual shareholder meeting, say); and do almost anything else they might do in person. Companies such as WebEx Communications, PlaceWare, Raindance Communications, IBM/Lotus, and many more offer a range of software and services. Cheap bandwidth and technological advances affecting how voice and video traffic are handled over the Internet have made the meetings much more “high touch,” according to IDC analyst Robert Mahowald. Some applications emphasize interactivity, while others simply provide a way for participants to view presentations from the comfort of their offices. The large number of vendors fighting in the space has driven prices down and features up; last month WebEx announced that its newest technology platform can now support PowerPoint presentations, 3D CAD drawings, access via wireless devices, streaming media, and the sharing of multiple documents and presentations.

“Travel and expense budgets have been dropping for some time,” Mahowald says, “while IT budgets should rise substantially in the third quarter.” Since Web conferencing exists at the nexus of those two trends, he says, it will fare well throughout 2002. “As vendors add features that address everything from project management to E-learning,” he says, “Web conferencing will become commonplace.”

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