School’s out

When ICI elected to make a global change in basic desktop software and provide an easily accessible, cost-effective form of learning for its 36,000 staff worldwide, it had no idea that its decision to deploy web-based e-learning would transform the business’s performance.

What began as a cost-centred project with a finite end has evolved into a major e-learning initiative across ICI’s four global businesses. This is not only delivering


Measuring ROI from e-learning

There are a number of ways to measure the success of e-learning. Analysts suggest using a combination of factors, including the number of people who register for courses and then enrol their scores, and how many complete the course. Regular staff appraisals should reveal improvements in job performance.

A typical rule of thumb is that one hour of e-learning is the equivalent of three hours of instructor-led training.

Some companies opt for e-learning because it appears to be the cheapest option, but this is not necessarily the case. Robert Chapman, co-founder of The Training Camp, which offers intensive IT training and certification testing services, argues that the price of the course alone does not give an accurate picture of the total cost. Instead, users should take into account the effectiveness of the teaching itself and the financial burden of taking highly paid staff away from their work.

“Though e-learning often appears to be a cheap option, the total cost, which factors in the number of paid hours spent out of the office and the time it takes to put the new skills into practice, is much higher than the initial course fee suggests,” says Chapman.

“Accordingly, the total costs of training will be much lower if a member of staff studies solidly for one week, rather than dragging out the training over a number of months.”

Research shows that some users find it difficult to quantify the effectiveness of e-learning. Only about half of 350 global training professionals surveyed by SRI Consulting said they had managed it.

Of the rest, 15% said they had attempted the task but failed thus far, 8% were unsure if they had tried or not, and a surprising 30% had not tried to quantify the effectiveness of their e-learning programmes at all.



savings but also, more importantly, underpinning ICI’s whole business strategy.

The same can be said of Dow Chemical, the biggest US chemicals maker. It conducts more than one million hours of regularly required training for its 60,000 staff worldwide. Its systems can deliver 200,000 online courses at a rate of between 5,000 and 10,000 courses each week.

Dow’s e-learning courses have to be flexible enough to cope with changing regulations across multiple countries, further diverse local requirements and more than a dozen languages. Using WBT Systems’ TopClass product, Dow has built thousands of customised courses based on individual learner and group needs. It has also linked staff training records into the company’s PeopleSoft HR systems.

Jon Walker, Dow’s HR IT director, says the company has enjoyed significant cost savings associated with the integration. Dow is projected to achieve a $34 million return on investment in the first three years of using TopClass, and it has cut training costs from an average of $95 per user on traditional classroom training to only $11 per user.

E-learning has become central to Nestlé’s business, too. With 250,000 staff worldwide and regional variations in IT infrastructure, Nestlé, the world’s largest food and beverage company, faced a considerable challenge in implementing a consistent global learning solution. Localised e-learning courses and flexible deployment methods were adopted.

Nestlé has deployed more than 900 online courses from Thomson NETg’s Open Learning Solution in business and professional development and IT skills.

The courses cover skills such as communication, leadership and team-working, end-user training in office automation tools, SAP training and technical courses for IT staff. The company has also been able to tailor the software it uses to include company-specific graphics, text and files.

Many of the courses are available to staff via Nestlé’s intranet, with others accessible through Thomson NETg’s hosted service, This has enabled easy and flexible delivery and the management of a blend of instruction.

Moreover, Nestlé has also been able to ensure learning time is optimised for staff since the architecture of the courses allows staff to by-pass those parts that do not fit their skills needs.

“Since learning can be personalised to individual requirements, our staff can take control of their own learning, which has proved to be very motivating for employees,” says Dawn Waldron, learning and training manager at Nestlé.

The company has gone one step further to ensure continual learning goes on. Employees have no restrictions on what courses they are able to take – so someone working in production could take a Microsoft or Oracle certification course, for example, without having to first seek permission from management. “Our staff now have a real just-in-time learning solution which means they can easily re-skill or up-skill at their desktops, enabling them to work faster and smarter and drive our business forward,” says Waldron.

All these businesses have one thing in common: being proactive in skilling up for future growth, instead of just reactive to technology upgrades and skills shortages.

Two factors have held back this trend to date: over-hyped and sometimes immature e-learning technologies, and a corporate culture that regards training as a cost, rather than an asset investment.

ICI’s intranet-based learning portal, called LearningZone, offers such highly-targeted and personalised learning designed to meet specific business needs.


E-learning technology providers

Gartner’s magic quadrant for e-learning suites in 2004, published in March 2004, identifies the following vendors as leaders, challengers, visionaries and niche players to watch:

Click2learn (in the process of merging with Docent), Saba Software, WBT Systems, Docent, IBM, INTELLINEX, KnowledgePlanet

Oracle, Pathlore Software, Plateau Systems, THINQ Learning Solutions

CyberU, Hyperwave, KnowledgeNet, Meridian Knowledge Solutions, Inc. (Meridian KSI), OutStart, SAP, Siebel Systems, Vuepoint

Niche Players:
Element, Knowlagent, Open Text, PeopleSoft, Sun Microsystems

Source: Gartner



The starting point is a list of pre-determined business success factors. For example, ICI knows that its business thrives when its management staff can build effective teams, and when individuals have business acumen and a customer focus. If an ICI staff appraisal identifies a weakness in any such area, then the individual can consult the LearningZone, key in the success factor and choose from a list of courses to remedy the situation.

The LearningZone provides all ICI employees with access to IT skills ranging from Microsoft Office and Lotus Notes to the International Computer Driving Licence course in a range of languages. Its database of Thomson NETg courses teaching vital business and professional development skills uses interactive learning containing role-plays and real-life scenarios in key business skills such as teamwork and leadership. ICI hopes that the provision of such skills will further increase individual and business performance and will help the organisation to provide world-class customer service.

ICI’s cost savings from aligning e-learning to business goals have been impressive and demonstrate true ROI. Just on capital outlay alone, ICI quickly saved more than £150,000 by adopting web-based e-learning over instructor-led training. Further significant savings have been achieved through the reduction of travel and hotel costs incurred by trainees. But perhaps the best ROI from the initiative has been the positive impact on the growth and development of staff across the organisation. Quality learning has led to an increase in productivity, efficiency and motivation, according to Steve Gunn, senior communications manager in ICI’s second largest business, National Starch &Chemical, which is a flagship for e-learning within the ICI group. Staff can now learn on demand anywhere, at any time, and so acquire the right skills the moment business demand dictates.

“While we are still to measure changes in staff behaviour and performance as a direct result of e-learning, the excellent feedback we have had from employees so far is evidence that the LearningZone is helping to drive both individual and company performance,” says Gunn. “The investment we’re making in staff development is helping to contribute to the success of ICI across the globe. Expanding the programme even further makes strong business sense in terms of helping ICI maintain its competitive edge, so we’re working hard on keeping the momentum going,” he adds.

ICI is not alone in experiencing huge benefits from the deployment of e-learning. Manufacturing giant, Procter &Gamble, is forecasting a five-year after-tax saving of over $14 million from its application of Saba’s Learning Enterprise system.

Proctor &Gamble has consolidated multiple learning management systems and content used by more than 100,000 employees in over 70 countries into a single learning portal, offering web-based and live distance e-learning.

Right blend

The e-learning market is growing, and growing surprisingly quickly. IDC predicts that the worldwide online learning market will be worth $23.7 billion by 2005 – or one-fifth of the total training sector. In Europe, spending on corporate e-learning systems more than doubled between 2001 and 2003, reaching $934 million, and will have doubled again by the end of 2005.

One reason for this spurt in growth has been e-learning’s ability to link to other enterprise systems, creating what some IT suppliers call ‘human capital management’ systems. Professor David Birchall, director of research at Henley Management College, head of the Centre for Business in the Digital Economy, and co-author of recent report called ‘Corporate e-learning: delivering business benefits’, says that companies are competing on the basis of strategic management of knowledge as much as the allocation of physical and financial resources.

Another cause of the demand has been a shift towards greater use of self-service HR systems. Companies want systems that not only enable employees to check the timing of pay day but that also make it possible to further their careers. Laura Kelly, international marketing communications manager at e-learning specialist, Thomson NETg, says that “reasonably-priced” MBAs (masters of business administration) are a particular high growth area.

General Motors’ corporate university has rolled out Thomson NETg’s MBA course to 86,000 of its employees to date, she says.

There is also significant demand for e-learning services. SkillSoft, Thomson NETg and IBM – regarded as three of the leading suppliers – are moving towards providing complete training programmes that embrace services and infrastructure as well as content. This trend appears to herald the ascendancy of learning content management systems (LCMS), which can take content from different sources and create a customised curriculum.

But sustained demand from enterprises cannot be taken for granted, says Birchall. “In moving to the next phases of development, urgent attention needs to be given to achieving greater levels of learner engagement and participation, integrated approaches to design and delivery, a stronger business case and the effective management of resulting projects,” he says.

A culture of self-development is still proving illusory in many organisations. He says that organisations must guard against this in order to remain competitive.

Other courses currently in demand tackle such areas as project management, occupational safety and regulatory compliance. Financial regulations change frequently, and e-learning is enabling workers at insurance giant Royal &SunAlliance (R&SA) to keep up. Compared to the cost of ‘chalk and talk’ training, it is also saving the company money: perhaps as much as $3.7 million over the next three years.

The company’s latest e-learning scheme, on the subject of risk management, replaces a two-and-a-half-day classroom programme and includes two self-paced e-learning modules, a half-day classroom session, and online discussion groups to encourage collaboration. The whole process is being managed centrally using Saba’s e-learning management system.

“E-learning allows us to not only prove competencies, but also track and link competencies to job profiles and integrate them into R&SA’s total learning framework,” says Andy Wooler, the company’s learning management systems manager. “It also enables us to deliver a wider range of courses.”

R&SA’s e-learning system is integrated into the company’s HR databases so that managers can be certain who has taken which course, in line with the industry regulator’s record-keeping requirements.

“Financial e-learning puts career development back into the hands of employees and I think a lot of people appreciate that,” says Wooler. “Our system allows staff to see the job profiles of anyone in the organisation and their own competency gaps so they can develop themselves in the right ways if they want to.”

He adds: “For the business, e-learning is helping us make sure that we take the right decisions at the right time, which will hopefully give us competitive edge.”

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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