The Second Coming
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Most people could not see what the fuss was about when e-learning was first introduced at the turn of the millennium. It was a bit like the emperor’s new clothes. A few sang e-learning’s praises, but most thought it was quite a waste of time and money. But today, companies are finding it increasingly difficult to find well-trained, employable candidates, while recruitment levels are unprecedented. All this had led to dramatic increases in training expenses. Suddenly, the attractions of e-learning are far more obvious in 2008. Besides, broadband is here.
Rajul Asthana, head of the learning centre at IT major Satyam Computer Services, says that his company uses e-learning because of its reach. “We’re a global company spread across 55 countries, so it is essential that every associate is able to leverage this,” he says. Satyam’s employees train to develop leadership, behavioural and technical skills; they also study project management and sharpen their knowledge in specific domain-related areas. Satyam is a client of QAI, an IT consultancy firm and e-learning service provider. By using e-learning, Asthana says that Satyam has cut cost and time expenses by nearly 30 per cent.
“The present growth (of e-learning) has resulted from the coming together of a number of factors,” says Pradeep Udhas, executive director of KPMG. Convergence of technology has made content delivery far easier than before. Also, more and more businesses want to standardise training for employees. E-learning can, thus, deliver the same training simultaneously across multiple locations. Finally, improved graphics and Web technology have resulted in more practical and easy-to-use user interfaces.
Apart from the always techno-savvy IT sector, industries such as banking and financial services, insurance, telecom, auto and even large format retail players, are among the new converts to e-learning (see table ‘E-nabler to the fore on page 72’). KPMG’s Udhas believes that, right now, there’s such a need for talent that it makes little difference to companies whether candidates have trained online or in a traditional institute. “At any rate, all companies test candidates for abilities,” he says.
Prabhash Bhatnagar, director of business development at Blueapple Technologies, an e-learning service provider, agrees. “Fast growing companies are boosting demand for better training solutions,” he says.
According to studies by market analysts, IDC, the global e-learning market, which was roughly $1.1 billion (Rs 4,400 crore) in 2000, will grow to more than $21 billion (Rs 84,000 crore) by this year and corporate e-learning itself will grow 27 per cent year-on-year over the next four years . Nilesh Vani, executive vice-president of learning services at e-learning provider Aptech, believes that the content development market alone is worth $250 million (Rs 1,000 crore) in India, while the market for companies that only deliver e-learning, a newer service, is now worth nearly $5 million (Rs 20 crore). At any rate, growth has belied expectations so far. In 2005, Nasscom had estimated the e-learning market to be worth only around $9.5 million (Rs 38 crore).
Navyug Mohnot, chief executive officer of QAI, says that e-learning will soon provide nearly 50 per cent of his company’s revenues. QAI is moving towards higher-value services and Mohnot believes e-learning is one such area of opportunity. If opportunity costs such as training time and travel expenses are included, QAI estimates that e-learning can reduce the cost of hiring and training new employees by up to 43 per cent.
Although e-learning currently accounts for 6 per cent of Aptech’s $208-million (Rs 832 crore) revenues, as a business unit it is growing at 73 per cent year-on-year. “Business is definitely picking up at the moment, and it is reaching a tipping point,” claims Vani.
Venture capitalists have been eyeing e-learning companies for some time. In 2003, Mentorix, a leading Mumbai-based e-learning provider, was bought by US-based IT services company, Lionbridge. Recently, 24x7 Learning Solutions and Hurix Systems, both Mumbai-based, received $4 million (Rs 16 crore) and $5.1 million (Rs 20.4 crore) from venture capital funds. QAI is expecting another round of funding soon.
The utility of e-learning has become as varied as the clientele it serves. “E-learning gives larger clients cost and volume advantages while smaller companies now have easy access to high-quality knowledge resources,” says QAI’s Mohnot.
For One, For All
For banking sector leaders HDFC and ICICI Bank, and a host of thier private sector peers, it is easier (and definitely cheaper) to send training modules on new product offerings and financial concepts to executives working in hundreds of branches across the country, rather than have them gather centrally. Built-in assessment modules enable companies to assess how effective the training has been. Only when employees clear a certain grade or assessment level do they become eligible for promotions or more advanced levels of training.
Also, “auto companies are now heavily focused on customer experience”, says Aptech’s Vani. “More sales and service outlets are getting IT-enabled, so they need employee and dealer training in these locations.” A few years ago, a leading two-wheeler maker took on 300 new dealers across rural India. These dealers were successfully trained in a computerised dealer management system by Aptech. Training modules that used audio clips and flash animation were created and deployed across the dealer network.
E-learning works for independent learners as well. Payal Bhatnagar started an online course on quality management after her last job in a multinational software company placed her in the quality and operational excellence department. According to her, e-learning is very effective for professionals who want to learn new skills while working at the same time.
New Wine, New Bottlenecks
The e-learning superhighway is not without its potholes. Westhill, a UK-based language training company, faced difficulties ranging from straightforward system bugs to slightly oddball issues, like computer phobia among trainees.
Other users complain that e-learning cannot address on-the-spot questions from learners. The patchy availability of broadband internet across India makes Web-based training services less than fully reliable. Finally, behavioural subjects, such as personality improvement and leadership, are harder to train through e-learning. These are better suited for sessions that are facilitated by human trainers, as they can articulate concepts in ways that a computer cannot.
To stay ahead, e-learning service providers must now think about streamlining their offerings. “Back then, too many tried and failed because none of the service providers paid attention to processes and systems to deliver their services,” says Blueapple’s Bhatnagar. In order to capitalise on quality, Bhatnagar says e-learning providers must choose between developing content or delivering it.
Not too long ago, e-learning was an idea that had arrived too early. Today, keeping pace with changing market needs seems to be the biggest difficulty. “Now, we’re even seeing terms such as e-learning 2.0 floating around,” says Vani, Watch this space.
(Businessworld Issue 19 - 25 February 2008)