July 2008

In addition to the modules on various business topics published on this site, a regular update on corporate e-learning issues will be posted monthly; review Purpose. Readers should be aware of and read the associated Health Warning before acting on this update. Your commentator is Bob Little, click for Biographical Details.

According to the well known – and well respected – journalist John Charlton, writing for Personnel Today, a report from French e-learning specialist Cegos names UK companies as top of the European training league. The Cegos survey of 1,000 medium and large companies in the UK, France, Germany, Italy and Spain found that 61 per cent of staff at organisations polled in the UK received training in 2007, compared with fewer than half in the other four countries.

UK companies also tend to be more e-learning focused in their approach to L&D, with 55 per cent of UK organisations providing e-learning, compared with 51 per cent in Spain and less than 50 per cent in the other countries. Cegos also said the average length of UK training courses was 14 hours, compared with 28 in Italy, 25 in Spain, 24 in Germany and 19 in France.

UK training spend is lower than other European countries surveyed, except Italy. The average UK training budget was £261,000, while it was £829,000 for France, £684,000 for Germany, £292,000 for Spain, and £236,000 for Italy. Other findings include:

• 86% of UK and 74% of German respondents use coaching, compared with fewer than half elsewhere. • 43% of UK companies have a corporate university, compared with 47% in France and 24% in Spain.

Comment: After all those years of being told that the UK lags behind Europe in terms of formal education qualifications, this survey redresses the balance and offers a glimpse of reality. Basically, there is less vocational education and more vocational training in the UK compared with other European countries. So, we do things differently in the UK and it seems to have worked for over 150 years. And, by the way, today’s ‘technology strong’ approaches to learning delivery – e-learning, mobile learning and so on – seem well suited to the UK’s approach to corporate learning.

Reports of the death of the learning management system (LMS) appear not to have been exaggerated. This is due to the growing popularity of open source LMSs, such as Moodle, among the corporate learning community.

Open source virtual learning environments (VLEs) - as LMSs are known in the educational world – are free to download, free of licence costs and can be modified or extended. They help organisations to create effective online learning courses and communities - and can be adapted to allow assessment, collaboration, discussion, content and learner administration. There are even consultancy companies that will help HR managers and trainers get the most out of their open source software.

Moodle is used for online learning on some 40,000 websites but, until recently, UK training managers have been slow to react. Traditionally, their organisations have bought licences to run LMSs – and these licences can be expensive where there are large numbers of trainees involved. However, in the last year or so, large LMS players such as SumTotal Systems and Saba have posted less than encouraging results and market watchers, analysts and so on – including Kineo – have started to champion open source software.

Comment: Open source LMSs offer a cost-cutting lifeline to companies currently under pressure because of the current economic conditions. They also do the basic learning management administration job with relatively little fuss.

Of course, if you still think that an LMS is the leading edge in terms of monitoring and managing corporate learning, the chances are that you’re not in touch with the systems that can not only do that but also can do much more interesting and sophisticated things. These include talent management, succession planning, competency analysis, as well as learning content management. So, while the last of the pure LMS vendors turns off the lights on their way out and leaves the ‘basic stuff’ of human resources analysis to open source software, the clever money is being spent on systems that allow you to develop human capital management techniques and strategies.

As our lives move increasingly online, people are starting to reject the paper CV in favour of online CVs. Online CVs can include links to documents, online profiles and other ‘rich media’. Indeed, VisualCV, a US online CV company backed by VC Valhalla Partners and search firm Heidrick & Struggles, claims to have ‘reinvented the resume’ for ‘today’s web 2.0 environment’. Nonetheless, a recent survey by web hosting company Fasthosts found that over 66 per cent of British business owners are worried that their online image could have a negative effect on their business – perhaps when someone ‘Googles’ an employee and finds embarrassing comments on Facebook or compromising photos on Flickr.

VisualCV has just signed a white-label deal with the online community China Business Network (CBN) (which brings together English-speakers who do business in or with China). VisualCV is providing the software, under licence, that allows members to create interactive branded CVs, which they can use to network with each other. CBN’s Christine Lu described her new service as ‘open and social enough to be appealing, yet professional enough for members used to traditional networking - without it being too cutesy or boring’.

Comment: So, what price ‘e-portfolios’ now? After all that angst of a few years ago about compatibility of virtual learning environments/learning management systems that store records of individuals’ skills, knowledge, achievements and so on, web 2.0 comes along and it’s all sorted. At least BECTA will be pleased. They spent any number of man hours – and taxpayers’ money – looking into this issue some years ago. Presumably they decided to leave well alone and let technology sort it out eventually – which it seems to have done.

According to Global Industry Analysts, the US is the single largest e-learning market worldwide, with revenues exceeding $17.5bn in 2007 - representing over 60 per cent of the total market. Europe is the second largest e-learning market, with a share of less than 15 per cent - but the Asian market is reported to be growing rapidly.

Market analysts Bersin & Associates’ 2008 Corporate Learning Factbook suggests that, in both the US and Europe, the e-learning market continues to grow each year as a proportion of all training expenditure. Apparently, the US corporate learning market grew from $55.8bn to $58.5bn from 2006 to 2007, and the average spending per learner was $1,202. The Factbook paints a similar picture for Europe, with management/supervisory training and leadership development being the top priority but with significant expenditure on customer service, sales and compliance training.

In particular:

• Telecommunications companies spend 23 per cent of their training budget on customer service training;

• Technology companies spend 29 per cent of training budgets on sales training, and

• Pharmaceutical companies spend 25 per cent of their training budgets on compliance and other mandatory training

In addition, Bersin found that there was increased expenditure on custom content development, despite there being a decline in the use of offshore content developers. Bersin also revealed that some 38 per cent of organisations are now using a learning management system (LMS).

Comment: All these numbers look encouraging but they could easily disguise some important trends. For example, since there are no real barriers to entry into this industry, is the e-learning market’s growth being shared among an increasing number of supplier/distributor companies? If this was the case, more suppliers would be getting, on average, a smaller slice of the cake in both absolute and percentage terms – and that does not bode well for profitability or sustainability among e-learning suppliers / distributors. From an e-learning industry perspective, it’s a good job that there isn’t an economic downturn coming along – much less a recession…