Two years ago, Cisco's internal training scheme was reaching crisis point. This was not because of a problem with the quality of the training, but with the sheer quantity. The company was growing exponentially and could not train its expanding workforce fast enough.

In less than two years, Cisco had acquired 50 companies and diversified from its core market in data networking into telecoms. "When you grow like this it becomes impossible to keep up with the requirement to train all your people in selling, supporting and fixing your products," says Mike Couzens, European managing director of corporate communications and training.

"The only way to cope is to move to a fundamentally different training model." Cisco had always used standard, instructor-led training, sending employees to the classroom. But since then it has adopted e-learning, using the company intranet to deliver training direct to the desktop. "In January last year, we reached the inflection point where more than half our training programmes were delivered over the net," Mr Couzens adds.

Cisco has also scaled up its training, offering its internal courses over the internet to its external marketing partners. "The irony is that in scaling-up the volume of training in this way, we discovered we can save humongous amounts of money."

Not only does the company save the cost of airfares and hotel bills, but staff are also more productive because they spend less time away from their desks. Before e-learning, sales staff spent six days a year away on product training, technical staff 12 days a year.

"If you teach 100 people on one topic, you have to pay the instructor four times and pay travel costs 100 times. If you teach the same 100 over the internet you only pay the instructor once, and there are no travel costs. Unlike traditional training, the more people you train, the more you reduce costs."

Although it could not meet demand, Cisco was satisfied by the quality of its classroom training. "Replacing leader-led training by electronic training was risky because we risked losing quality," says Mr Couzens. "What we found, to our surprise, is that people enjoy it more, and the results are going up in terms of the average performance levels on tests."

There was concern among employees that the introduction of e-learning would force them to catch up on coursework after hours. In the event, more than 80 per cent of training is still done in the working day. "There is no compunction on when staff do training. People do it to suit themselves, dialling in to do an hour, and breaking it into manageable chunks, like taking three meals a day."

The training programmes are delivered in two ways, either as Cisco TV, broadcast to the desk, or as video-on-demand. "Staff will be informed that at 9am Monday there is a company broadcast on the latest high-speed gigabit router. They can click in and watch it like an Open University programme." This programme is videotaped and stored for staff to dial in and replay at any time.

The broadcast is interactive, allowing staff to ask questions, either directly, or via a moderator who summarises all questions, to prevent the flow being interrupted. Those learning from the video can phone a tutor - or Cisco Interactive Mentor - for advice.

Every employee has an individual training programme, and their progress can be monitored remotely. "This makes training very much more personal", says Mr Couzens. "If someone doesn't need a particular course, then they don't have to do it."

E-learning can also offer huge advantages in terms of updating the curriculum and the training materials. "A text book takes two years to rewrite; at Cisco we do quarterly updates of all our training material."

Cisco spends $40m a year on training in Europe, and Mr Couzens says the cost savings of e-learning "can be quantified in tens of millions". But the improved quality of training and the productivity gains have broader implications. "The move to e-learning has been instrumental in helping us to hit our very aggressive revenue targets."

Cisco sells mainly through distributors - and e-learning means it can ensure its partners have access to the same training at the same time. Sales staff can be tested online, to ensure they have mastered the details of Cisco's products.

The company also makes its training courses available for free to secondary schools and technical colleges through its Networking Academy Program. In the UK, 400 schools and colleges use the 280 hours of training material. "School leavers who are taking these courses are walking into very well-paid jobs," says Mr Couzens.

He also finds himself making regular presentations to large corporatations that want to adopt e-learning. "Typically, they have their own network, which e-learning applications sit on. So I'm not selling networks, but how to use them."