Wind back the clock a couple of years and you’d find that most organisations engaged in the e-learning market ended up doing a couple of standard things. It almost didn’t seem to matter what their entry point was, or their specific business or learning needs; once they got sucked into the e-learning market they came out with the same story – sign up a deal for an e-learning content catalogue, implement a learning management system (LMS), and pay an e-learning developer to create a couple of custom e-learning courses for them.

E-learning catalogues evolved out of the computer-based training (CBT) market of the past. Primarily driven by a few large CBT companies and a large number of niche ones, e-learning was an obvious evolution for them. The World Wide Web provided them with a fantastic way of deploying their core asset – their content – without the need for any of that nasty CD-ROM distribution business. Companies could now offer a greater breadth of CBT (or I guess we should call it WBT – web-based training) to more people more easily. They just had to worry about nasty things like network bandwidth, and the lack of soundcards on corporate PCs. But the case was compelling, the CBT vendors became e-learning content vendors and gradually (much more gradually than people suspect actually) companies switched to using e-learning content.

For corporates, one of the key drivers for this change was the ease with which the e-learning courses could be deployed to a much wider range of people. It enabled them to reduce the need for specialist learning centres with dedicated multi-media machines now that the content could be accessed by everyone (or nearly everyone … well, actually, anyone with access to a suitable PC connected to the corporate intranet or Internet in a suitable working environment).

As I have already suggested, the other benefit was a massive increase in the number of courses available. Previously, there had been just a small range of specific courses on CD-ROM. Now, hundreds or thousands of courses could be offered. And the cost of those courses looked really attractive. Big organisations had access to hundreds of courses for thousands of staff at a fraction of the cost of classroom training. So that’s what organisations did. They signed a contract, often for three years, for a large catalogue of e-learning content and offered it via the intranet or Internet. And, as I said earlier, they perhaps also signed up with some niche content vendors for something industry-specific and paid a custom e-learning developer to create some company-specific courses for them. Et voila!

So how do these catalogue deals look a couple of years on? Well, I guess the diplomatic answer is ‘Mixed’. There are definitely some success stories – organisations that have significantly cut the cost of providing generic training and have good recurrent use, particularly for user IT training and office applications. These examples can show multiple hundreds of per cent return on investment. Is this the norm? I don’t believe so. Many other organisations have seen much more patchy success and often significant apathy from their learners.

Although the business case for a catalogue was built on broad usage, in reality only a small proportion of those in the organisation use the courses and, often, many use it only once. While the catalogue contains hundreds or thousands of courses, only a small number, maybe ten to 20, get any real consistent usage. Usage was good initially when the catalogue was first launched, but it is pretty disappointing now. In short, these companies are seriously questioning the value of the catalogue. They are paying for access to hundreds of courses for thousands of people whereas, in reality, they get real value from tens of courses for hundreds of people, with just a few courses broader than that.

If this is the norm, then I believe it is a serious threat to the content vendors focusing on broad catalogue provision. Their business model is built on broad catalogue access and multi-year contracts. But while organisations may want to provide company-wide access to a broader set of courses, they don’t want to pay for it up front. They may pay for ten or 20 courses for everyone, but they want to pay for the rest as they go. That’s a huge change and a big threat to the catalogue vendors – a threat that has already manifested itself in some big corporate contract discussions and will significantly shape the way these vendors evolve in future. Watch this space!

David Wilson is managing director of eLearnity, a leading independent learning analyst and consultancy, which he founded in 1996. He can be contacted on +44 (0) 20 7917 1870 or at DavidW@elearnity.com

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