Economics reshape corporate training budgets
Austin Business Journal - by Emily Sopensky Special To The Austin Business Journal
Facing stagnant earnings and massive layoffs, many corporate budgets, especially in the technology industries, look a lot like Swiss cheese.
Add to this the increasing expenses of travel and time away from the office and it is not surprising to find traditional classroom training on the decline. Corporations now seek more efficient and cost-effective means of delivering training to employees and customers, leading them to reshape how training is delivered as they revamp training budgets.
"We saved a lot of money last year by moving 36 percent of our employee training to an online environment," says Nancy Deviney, general manager for learning services at IBM Corp. [NYSE: IBM]. The numbers are clear in the company's annual report for 2000 released June 30 -- more than 200,000 employees received education and training online.
"We have similar targets for 2001," says Kent Hemingson, program manager for IBM learning services in Austin, confirming online learning is not a one-time-only effort, but a managed decision. His group oversees training for Austin's 7,000 IBM employees.
Training is a serious matter for most firms, but especially those in technology. Applied Materials Inc. [Nasdaq: AMAT], for example, requires employees to spend 40 hours a year in training. Safety and other compliance courses are mandated, regardless of economic conditions.
In addition, a technology company tends to define its competitive edge in terms of a combined knowledge base of talented employees and the products they produce. For most of these companies, online training is no longer unique, but a necessary part of the overall strategy for training, education and workforce contentment.
Preparing for the upswing
Some companies, like Austin's Applied Materials, view the current economic downturn as a time to emphasize training and an opportunity to prepare for the eventual upswing.
In the semiconductor equipment industry, Applied Materials is a major player. The largest supplier of manufacturing equipment and services to the industry, the Santa Clara, Calif.-based company fields a workforce of almost 20,000 at close to 90 sites worldwide. In Austin, Applied Materials holds a significant manufacturing presence.
Romek Nowak, president of Applied Material's Global University -- or AGU -- says nearly 6,500 employees took online courses in less than two months recently.
As with IBM learning systems, AGU's strategic direction this year is to improve the efficiency of training through e-learning. In April, a new AGU Web site was launched on the company's intranet.
"Of our new course development, more than half is online training or some version mixed with conventional," Nowak says. "This offers employees the ability to take a course at any time, anywhere."
Online training delivery reaches a broader audience quickly while being easy to update. Additionally, employees can register for classes online and track their personal academic histories.
Using its own model
"We use the Web in training because it's a natural extension of the Dell business model. With it, we can compress time, distance and oftentimes cost," says Don Duncan, senior training manager at Austin-based Dell Computer Corp. [Nasdaq: DELL]
Using technology-enabled learning, Duncan explains the learning objective often dictates how training is delivered. Knowledge and skills-based training, for example, are more conducive to online training than field sales, which is more relationship-based.
Regardless of the method, however, assessment is usually delivered online. Results go to the employee within 30 minutes and within a week to the executive team.
For a sales audience learning about its business model, Dell uses a combination of pre-work and online presentation, which is limited to less than 30 minutes. The presentation includes full motion video and high impact graphics. For employees on the road, the online version is also available on CD-ROM.
In the four years Duncan has been with Dell, he has eliminated paper training manuals in the classroom. By eliminating the hard copy training manuals, he says the company reduced per student costs by 5 to 15 percent for internally produced courses -- and double that percentage of savings for licensed courses produced outside the company.
"These savings allowed for other investments in the training budget," Duncan says.
"The most we use is a laminated job-aid card," he says. "People don't reference training manuals unless it's very technical. Now the in-classroom tools are all on the Web to reference and bookmark."
Simulations and animation
For technical support training, simulations and animation are much more important to corporations, especially in technician training.
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