Virtual training centers

the future of training and development


The days of the internal training department are numbered: computer-based training and outside contractors are more in sync with a projectized world.

by Mark A. Gould

TODAY AND INCREASINGLY in the future, training functions in organizations will decentralize, outsource their training needs, reduce full-time training staffs, and make use of alternative delivery systems. Traditional training departments will be reengineered into “virtual training” centers. What impact will this change have on staff trainers, independent consultants, training companies, and colleges and universities?

This trend of decentralization and outsourcing will be true of the training functions of tomorrow's corporations. Individual managers will become responsible for making training decisions for their employees. These decisions will be based on the strategic business goals of the individual projects and initiatives for which they are responsible. Training will be deemed successful based on measuring the impact return on investment of training, not just “reaction sheets” filled out at the end of a training workshop.

Show Me the Money. According to the annual Training magazine survey, outside training expenditures increased by about 32 percent over the last two years to $13.6 billion (see Exhibit 1), and outside expenditures for seminars and conferences increased by more than 22 percent to $3.69 billion (see Exhibit 2). As companies are forced to do more with less, and with the rapid evolution of new technologies, companies will continue to invest in the skills that will contribute the most, and the most quickly, to the growth of the organization.

The results of Training magazine's 1997 survey on training expenditures shows that outside expenditures as a whole (representing the market for training-related goods and services) have increased by about 32 percent over the past two years

Exhibit 1. The results of Training magazine's 1997 survey on training expenditures shows that outside expenditures as a whole (representing the market for training-related goods and services) have increased by about 32 percent over the past two years.

Training's survey also indicates that spending on seminars and conferences alone has grown by 22 percent. This category covers courses outsourced to contract trainers and outside training companies

Exhibit 2. Training's survey also indicates that spending on seminars and conferences alone has grown by 22 percent. This category covers courses outsourced to contract trainers and outside training companies.

Companies will no longer provide training for their employees unless it helps the company make money, save money, or improve the quality of service to its customers. Thus you will see more and more organizations measuring the effectiveness of training based upon measured behavior changes.

Trainers Move Outside. The trend toward reducing training staffs will continue while the outsourcing of training will increase. Companies of tomorrow will move toward just-in-time training vs. the old just-in-case training mentality. Here is where training methods such as CBT (computer-based training), Internet- and intranet-based training will really pay off. These will enable new employees to learn about company policies, products, and benefits right from their desktop instead of waiting several weeks until a training session can be offered. When employees need to learn how to use a new application, these new delivery methods will give them the flexibility to spend time on the features they do not understand rather than spending two or three days in the classroom reviewing things they already know. Once companies make the investment in the infrastructure of these new training delivery systems, training costs per employee can be greatly reduced.

As the outsourcing trend continues, independent trainers and consultants will have tremendous opportunities to grow their businesses. However, only those who can deliver what, where, when, and how the clients want will thrive in the training and development business of the future. Corporations will continue to use independent trainers and consultants because they can't justify the cost of a full-time training staff to deliver all of their training needs, especially those when training needs are evolving so rapidly that even they are not sure what type of training they will need in the next six months.

Moreover, with new technologies constantly being developed and released, it is nearly impossible to keep up with them all. By outsourcing, companies will be able to have a “virtual training” center that can easily adapt to training needs. Companies will have resources only a phone call away to help when they need it. Independent trainers and consultants who do not offer the flexibility, quality, and customer service that companies are expecting will no longer receive the call for more work. Only the strongest and most responsive will survive in this new competitive market. The benefit for the independent trainer or consultant is that companies will be willing to spend more money for outside services than they would for an internal resource as long as their needs can be met. Another bit of good news for those in the training and development field is that according to the annual Training magazine survey, 94 percent of all companies planned to maintain or increase the same amount of training expenditures in 1998. So expect similar growth in the market in the upcoming years.

With this new focus on lifelong learning, there are new opportunities for training organizations. The adult education business—seminars, workshops, classes, conferences—is one of the fastest-growing industries in North America and can be extremely profitable. Seminars are an important aspect of the pervasive information revolution.

As evidence of the important and growing role of seminars, enrollment in both public programs and on-site training programs is high and on the increase. Observers of the seminar business such as Howard L. Shenson have predicted that by the year 2010 some 80 percent of the nation's adult population will have attended one or more public seminars or workshops. According to Shenson, at the present time, only 57 percent have had this experience. Thus, several million first-time participants will be candidates for the seminars and workshops provided each year. Conservatively, enrollments in public seminars can be expected to continue to grow at a 5 to 9 percent annual rate over the next five years and enrollments for on-site training at a 4 to 7 percent annual increase.

Expertise For Sale. In the “virtual training” centers of the future there will be little demand for independent “generalist” trainers and consultants. Companies will be seeking those independent trainers and consultants with expertise in specific disciplines, those who are flexible and who act as a business partner rather than a quick fix. To ensure continuing success as a provider of training, it will be critical to position yourself as an expert in your field, and not as a generalist. Consultants who are not willing to play by the rules their clients establish will find themselves without much work.

The future will also bring an increased demand for nontraditional delivery hours for training, such as evenings and Saturdays. Expect an increased demand for one- to three-hour training modules instead of the traditional full-day offerings. Time is a resource that companies of the future will cherish even more than they do today. The demand for more time is also driving the demand for the nontraditional training methods. As the trend for using more interim workers, contract employees, and outsourced staffing continues, you will see growth in these alternative methods for delivering training. Another driving force behind this trend is the fact that the workforce is becoming more dispersed. Employees are working at home, on the road, and at other locations. CBT and Internet-based training are portable and will meet the growing demand as the workforce continues to be on the move.

According to a recent survey of Technology for Learning readers, 18 percent of organizations surveyed presently use the Internet or an intranet to deliver computer-based training, but 58 percent of them expected to be using a network to deliver CBT within a year. Survey respondents were almost unanimous (94 percent) in predicting that the Internet or intranets will be at least one of the predominant delivery platforms for CBT in the coming years. Similarly, 40 percent of responding companies expect to be using a lot of CBT courses for their training needs in the future, but less than 15 percent are using CBT extensively now.

The virtual training centers of the future will utilize internal trainers, independent trainers and consultants, and colleges and universities

Exhibit 3. The virtual training centers of the future will utilize internal trainers, independent trainers and consultants, and colleges and universities.

There will also be opportunities for colleges and universities that offer corporate training services in the “virtual training” centers of the future. (See Exhibit 3.) According to a Coopers & Lybrand survey (Trendsetter, 1995) that interviewed CEOs of 424 of the fastest-growth companies, only 4 in 10 have ever utilized college or university resources for training. However, the growth companies that use university resources boast productivity rates 59 percent higher than their peers without such relationships, in terms of revenue per employee. More and more colleges and universities are getting into the corporate training business to capitalize on the new paradigm of lifelong learning for all employees.

Lifelong learning also creates opportunities for independent trainers and consultants who have established partnerships to provide training services for colleges and universities. As corporate America seeks real-world skills that apply to their industry vs. general knowledge, colleges and universities are required to identify adjunct faculty who can bring these real-world skills into the classroom.

Just-in-time training will replace just-incase training and will flourish in the future “virtual training” centers. With increased delivery choices such as self-directed multimedia, intranet-based training, satellite broadcasts, and distance learning via compressed video, the training manager and learner of tomorrow will have more choices than ever.

Don't Board Up That Classroom. Will all of these technologies eliminate the traditional classroom training? How will these technologies be used in tomorrow's organizations?

According to an American Society for Training & Development (ASTD) survey in 1997, roughly 91 percent of all companies deliver training through the traditional classroom method. Certainly the emergence of these alternative sources of training methods will continue to offer options for those developing, delivering, and purchasing training. However, for management development training, I have found the traditional delivery methods are still the overwhelming choice, and I expect this to continue. I base this prediction upon the hundreds of training buyers and decision-makers I speak to each year who I ask, “What alternative delivery systems are you considering?” They usually reply that for management training in the areas of communication skills, team building, presentation skills, coaching skills, and so forth, the nontraditional methods are not as effective as the traditional classroom environment. Most also confess that they do not have the internal infrastructure to utilize many of the other delivery systems. In fact I've recently heard, “Use the Internet! We just got Windows 95! No telling how long we will have to wait until we have Internet access.”

However, the nontraditional delivery methods will continue to grow and be viable options for those who have invested in these technologies. Internet-based delivery alone increased fivefold in 1995 from the previous year. Technical subjects such as C, C++, Java, and computer applications training will be especially successful using alternative delivery training methods.

For the management development curriculum, these media will be used sparingly. They will be used to bring those employees who have little or no knowledge in particular areas to a level even with their peers. However, any major skill building in the management area will still be done primarily through the traditional classroom delivery method.

Self-initiated learning will flourish in the future. Why? Because employees have started to realize that although the company may own the job, they each own their career. Employability, not job security, will be most important. This means individuals will take a greater role in shaping their own training in the future. CBTs as well as Internet-based training will support this new shift.

WHETHER TRAINING IS DELIVERED via traditional standup methodology, computer-based training, or a combination of the two, an underlying success factor is that the training has to be flexible and dynamic. Customization, in materials and delivery, leading to creativity and a new learning model will ensure an organization's success. ■

Mark A. Gould is director of the Management Development Programs at Boston University's Corporate Education Center, and president of Education Services Marketing Group (ESMG). He also serves on several national training boards, and is a member of ASTD, PMA and PMI. He was co-chair of the Education Institute Program for the 1996 PMI Annual Seminars & Symposium.

Reader Service Number 5129

PM Network • April 1998



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