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| FTIT June 6 2001 / E-learning |
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| Finding the right mix By Mark Vernon Published: June 4 2001 08:36GMT | Last Updated: June 5 2001 16:17GMT |
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 With so many vendors of varying shapes and sized jostling for position in a fast-growing market, prospective customers may feel in need of an instruction course just to find out what is available. IDC, the IT research group, estimates that the sector will be worth $23bn worldwide by 2004, with areas such as Europe growing at annual rates of 96 per cent. Other observers are less sanguine, believing that many start-ups will suffer the fate of the dotcoms -a fear compounded since the start of the year with deflated stock markets leading to scarce investment funds. So what strategies are service providers devising? And of whom or what should customers be wary if they are thinking of signing up for e-learning? There are three basic elements to providing e-learning: content, technology and services. And it is getting the right balance between them that is driving the strategy of vendors. The larger suppliers generally advocate a one-stop shop that provides all three. Smaller participants unsurprisingly suggest that a solution can be built from multiple vendors. There are advantages and disadvantages to both approaches, and variations that fall in between. Working out what combination will best suit a particular customer is critical to their decision. But whatever approach is adopted, content quality, combined with strong instructional design, should be the hallmarks of the best. The problem for buyers is that it is hard to know where to start with the mix on offer. They inevitably tend to choose on the basis of the vendor's reputation. "Features such as 24x7 online mentoring, localisation of content and customisation of content are basics. But customers must find out about the details of what is being offered to them," says Sheila McGovern, senior research analyst at IDC. For example, some kinds of e-learning can be delivered off-the-shelf. IT skills are an obvious candidate here and IDC believes this type will capture up to half the market. However, just because the internet is a centralised dispersal medium does not mean that vendors can automatically roll out universal content. "Bespoke solutions are emerging and, when needs require it, customers should go for vendors that have worked with consultants to find out what people need, and in what context," Ms McGovern adds. On the technology side, standards are still an issue, particularly in the less mature European market. "The two main standards appearing - AICC and SCORM - both hail from the US and were both developed for different purposes," says Mike Maunder, vice president for international marketing and alliances at Saba, the California-based vendor. Until standards are accepted, adoption will be stymied, he suggests. But deeper strategic issues also face vendors. For example, Paul Henry, senior vice president at SmartForce, also based in California, believes that getting the right e-learning package is symptomatic of a greater challenge, which is to persuade customers that they need to buy into e-learning in the first place. "Are we going to collectively persuade customers that the e-learning offering is as compelling as figures such as those from IDC suggest?" he asks. Customers are nervous, he suggests, as they see a market that is not only highly fragmented but also volatile with a large number of players both old and new vying for a dominant position. Ken McNaught, sales director at NIIT Europe's Knowledge Solutions business, suggests that this situation has become worse since the start of the year, following the collapse of high-tech stock markets. "This is enough to scupper the fragile end of the industry and consolidation will become more rapid. The small guys with low revenues and high debt will have to go. Medium-sized players will start to look very attractive to buyers - so, cash rich companies will gobble them up," he says. Other observers are confident that e-learning will take off regardless of market conditions. Cisco Systems, for example, declared e-learning a "killer application" for the internet last year - and is sticking by this view. "Unless a company wants to employ professional students, the answer is e-learning," says Mike Couzens, European managing director of corporate communications and training. "It allows people and organisations to keep up with the changes in the global economy that occur in internet time. "E-learning enables students, whoever they are and wherever they are, to harness the power of information and knowledge at a fraction of the cost of traditional training methods. This has to be a good thing for any organisation." So, if and when it comes to choosing a vendor, each element in the overall solution - technology, content and services - should be considered in turn, according to Nick Van Dam, global learning director at Deloitte Consulting. "To select a likely winner in the area of technology, buyers of services should look out for the following signs: strong vision, a high quality workforce, a global client base and sufficient capital to feed expenditure and investments," he says. In relation to content, he suggests that off-the-shelf courseware should demonstrate the quality of its course portfolio - "for example, showing input from thought leaders or that content has been developed with a keen eye to organisational change management, critical for any genuine learning experience ". Vendors should also make e-learning game-based, he says. "The current generation of graduates has grown up using computers - and they are familiar with computer games. A game-based approach makes e-learning fun, challenging and exciting. This is what tends to be missing from the present generation of e-learning content." And finally, in terms of service, vendors should show they have the bigger picture in mind, that is know something of their customer's business. "Good people and performance management are key - and good e-learning offers excellent foundations upon which to build," he concludes. E-learning vendors
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