Most large companies have made significant investments in training facilities. But will the arrival of internet-based training at the desktop make country house learning centres - and dedicated CD-Rom training rooms - redundant?

There is little doubt that e-learning offers considerable cost-savings over traditional methods of instruction. IBM has saved some $200m per year on the cost of training its 95,000 employees worldwide by switching to e-learning, according to Mike Theaker, head of e-HR (that is, web-enabled human resources) consulting for the company in the UK. Similarly, Dow Chemicals has saved $100m by providing 80 per cent of the training required for health and safety procedures over the internet. The ability to manage and assess the progress of trainees was an added bonus in a critical area for the company.

Savings at IBM, Dow Chemicals and other multinationals accrue from lower travel costs, smaller hotel bills, less time off work for training and the more effective learning styles made possible by web-based courses. "We will see a scaling back of training centres and instructor-led training in IBM," acknowledges Mr Theaker.

Instead, employees are likely to spend more time accessing online courses from their desktop systems. E-learning courses are usually designed to be absorbed in short bursts of under one hour so that they can be fitted in with the requirements of the working day. But course material can be available 24 hours per day, allowing employees to study from home as well.

Other benefits of internet learning include the possibility of running games and simulations over the web, making instruction more realistic and memorable. Training departments can also operate virtual classrooms with lecturers supervising tutor groups remotely using e-mail, chat rooms and internet telephones to communicate with trainees.

"The chief advantage of the classroom is that you can ask questions," says Ian Clague, managing director of the training company, BlueU.

"The chief advantage of CD-Rom is cost. However, with web-based learning you get the best of both worlds. Low cost, but with synchronous tools such as voice-over IP, real time e-mail and text-based chat rooms increasingly being used."

Compared with CD-Rom, internet-based learning is more convenient. Trainers have access to a wider choice of course material and they can monitor the progress of trainees. There are management advantages, too: learning management systems are available to provide timetabling and reporting facilities for web-based courses.

Companies are gradually phasing out CD-Rom, comments Dennis Quilter, chief executive of training supplier the AdVal Group. "Two years ago, 80 per cent of our business was in CD-Roms, now 80 per cent is web-based. CD-Rom is mainly used now to deliver video or for material with heavy animations."

Some companies have set up internet-based corporate universities which not only provide work-related courses, but also more general studies. Some of these company learning centres in the US are even run by universities and are available to people outside the organisation.

"There is a growing demand for corporate universities," observes Joe Pelissier, European consulting director for Click2learn, an online training services company. "A lot of organisations are saying they can use the internet to promote their own ethos and to encourage the self-development of their employees."

However, e-learning usually has less high-flown objectives. For many companies, the ability to train large numbers of people quickly is a key factor in their ability to bring out new products, respond to changes in markets and to ward off competition.

"In sales training, the lead time in briefing people is significant," Richard Morris, e-learning practice manager at KPMG Consulting, points out. "If you can speed that up by creating immediate training packages and remote collaboration between groups, your organisation can work much smarter."

Mr Morris cites Sony in Germany, which invested considerable resources in using web-based instruction to keep its 1,200-strong sales force up to speed on new products, services and potential problems, thus giving the company a competitive edge.

The desktop model has not completely replaced more traditional forms, however. Many training professionals advocate a mixture of different styles. "Blended learning is the new buzzword," explains Jan Hagen, head of the solutions group at online learning company Wide Learning. "That means using whatever method is most suitable to your company."

Companies that have invested heavily in e-learning will not necessarily be closing their training centres, either. Deloitte Consulting, for example, will continue with classroom instruction. However, the company has used e-learning to prepare students for a company-wide classroom-based e-business course, and to reinforce their learning afterwards.

"This programme usually lasts up to seven weeks," says Nick Van Dam, principal chief learning officer at Deloitte Consulting. "We have 'e'-enabled the front and back-end of the programme. This has reduced the typical classroom time by 15 days."

There are also technical limitations to e-learning. In many companies, the communications bandwidth required to deliver high quality class material over local area networks to employees' PCs is not available. There are also problems in using techniques such as internet telephony.

"Online learning may be mature now, but what is not mature is the way it gets through to trainees. The virtual classroom can be very rickety," claims Mr Hagen of Wide Learning.

There are additional costs, too. While an hour's lecture in a classroom may call for 50 hours of preparation, an hour's worth of e-learning requires an average 250 hours' development time, according to Mr Van Dam.

On top of this come various management overheads. Although online training can be self-administered, in practice trainees still need reminding about training times, deadlines and course assignments.

Meanwhile, e-learning is still in its infancy. Most users are multinational companies with more than 5,000 employees. There is still a huge untapped market among smaller enterprises.

So, while some former training centres come on to the property market as their owners cash in on savings from e-learning, it is unlikely that older styles of learning will be abandoned entirely. "We'll see around 50 per cent of training being done online," forecasts Mike Maunder, vice president of international operations at Saba, the training company.