E-learning: Key drivers and challenges

October 31, 2003 by SAP News 0

Bangalore, India

“Learning is like rowing against a current – as soon as you stop, you drift backwards.” In today’s world of life-long learning and configuring old values with new skillsets, nothing could be truer than this saying from philosopher Lao-Tse.

Yet rowing against the current has never been easy. Traditional learning took up massive resources in terms of setting up classrooms and infrastructure. It took employees away from jobs thereby driving up expense phenomenally. It was rigid and remote. In comparison, E-learning seems flexible and customizable. With a mouse click, learners can access information at home, on the road or in the workplace and at anytime of the day or night. No rigid class timings or remote locations.

E-learning is set to explode and the applications are increasing. It started as a training tool but now companies are realising that larger audiences of learners can take part in continuing education opportunities more simply and efficiently than before and so they are focusing on E-learning not just for employees but customers as well. Manufacturers are distributing new product knowledge quickly and directly through on-line courses to worldwide audiences. Consultants on the road can use e-learning to improve efficiency, accessing up-to-date knowledge anywhere and at any time. Field personnel can access real-time training without being physically present. And learners can participate in training from their own homes whether it’s provided by their own company or by another organisation.

Yet, E-learning doesn’t come without its share of challenges. For one, the business environment itself is throwing up new challenges. Then, there are evolving needs of customers that are driving the e-learning initiatives. Further, e-learning itself is offering new tools to deal with the challenges. What do these trends mean for E-learning?

The growing importance of E-learning can be seen in the context of the business environment and key drivers of this environment. E-learning is set to change the way companies look at training because of the following reasons:

Complex goods and services: Products and services are getting more and more complicated. For example, an average digital camera or a TV may have more than 30 features. A financial services site may offer 50 services or products. Such sophistication can be a double-edged sword. While it may differentiate a company from its competitors, it could also derail the business model as users may not buy a product or use a website if they fear it will be too difficult to learn. Further, if a vendor has to bear the burden of training, it might be reason enough for him to forgo the product or service or delay it even if the system provides real benefit. Users may also resent features they do not use and this might result in low customer satisfaction.

Under these circumstances, E-learning comes in handy to demystify some of the fears of potential customers. Since it is a human tendency to be embarrassed about things we don’t know, people are hesitant to go to classes. But if they can learn at their own pace and in the anonymity that E-learning offers, they would be more receptive to new products and services. Companies like Charles Schwab have effectively used E-learning to take fear out of investing and get more customers for their products. According to Gartner group, at least one out of ten customers of products would demand, test-drive and pre-learn before buying products this year.

Need to augment revenues: One of the most powerful reasons to train customers and not just employees is to bolster revenues. Building a classroom has been an unacceptably steep investment for most corporations, but setting up a virtual capacity is possible for many. Not just powerhouses like Sun, Microsoft and Cisco, but even smaller software developers are offering a combination of instructor-led training, E-learning and certification programmes to customers as well as free agent learners. For application developers like SAP, Peoplesoft and Baan too have sophisticated training operations. SAP now makes about 12 per cent of its revenues from training and has rolled out virtual classrooms to thousands of end users. In the bargain, most companies report a double-digit addition to their revenues.

Need to reduce training burden: Paradoxically, companies today need to reduce the training burden that customers and employees pose to organisations if they are to improve their bottomline as well as topline. Software companies like Microsoft have been increasing features in every upgrade of its operating system in order to reduce the training impact on organisations. The company’s Office 2000 has significantly redesigned or new help tools like Office Assistant, HTML Help, Answer Wizard, Alerts and Extensions to the web. Sales depend on them. The Gartner group estimates that such embedded learning will ultimately cost software developers about 8 per cent of total development costs for end-user applications.

Increased competition: Competition for mind share of customers is increasing dramatically. Traditionally, corporations and individuals vied for pulpits at conferences because it gave them an opportunity to position themselves as thought leaders and to paint their own view of the world. Now that capacity is being decentralized rapidly by the Internet’s capability to disseminate information. In this context, e-learning tools like virtual seminar or streamed on demand presentation can be used to launch new offerings, position a company in the context of its competition and even explain implications of recent developments. According to analysts, for companies that need to change their market perception and establish thought leadership, offering virtual seminars and asynchronous educational content will be the single most-used channel by this year-end.

E- training is, therefore, no longer just about training employees. Of course, it provides tremendous saving for an organisation by way of continuously upgrading the skills of the workforce and allows companies to react more quickly and flexibly to new challenges and ever-changing learning needs. It also reduced corporate training costs by at least one-thirds, which promises a rapid return on investment.
But the most recent trends in E-learning indicate that it is not just a cost centre or something the training department worried about. In fact, it is core component of business. It is the strategy and profit-loss component in businesses ranging from IT to consumer durables to financial services. Not just E-businesses but even traditional industries will soon be forced to embrace the mantra of E-learning, “Educate your customers before your competitors do.”