GM Gives Log-On Learning a Boost
It's a bad week for planning business junkets. For many professionals, corporate seminars and training programs used to offer an escape from their office cubicles. But these days, more and more workers are being asked to log on and learn.
That's certainly the case at General Motors Corp. On Apr. 4, the company announced that it's encouraging its 88,000 salaried employees to take online courses in areas such as marketing, finance, and e-business, and even to tap the Net for an MBA. GM's four-year-old corporate university has agreed to a four-year alliance with UNext.com, a Chicago-based e-learning company that offers $125 million worth of courses and degrees through Cardean, its online university. GM also is taking an equity stake in UNext.com, the amount of which it isn't disclosing.
GM is joining the ranks of companies such as PricewaterhouseCoopers, Dow Corning, Dell, IBM, and Barclays, which in recent years have offered various online management-education courses to their execs. In June, GM's crosstown rival, Ford Motor Co., will launch the Ford Learning Network to help employees and their managers determine skills they're lacking and suggest e-learning courses to supply them.
All told, by 2004, companies are expected to spend more than $23 billion annually on online corporate education, up from $6.3 million in 2001, according to International Data Corp. A major reason for the shift to Net ed: "It's faster learning," says Donnee Ramelli, president of General Motors University. And since UNext's courses are "project-centered, [employees] can apply techniques and tools the next day on the job."
E-learning also can be far cheaper than conventional classroom learning. IBM says it saved $350 million in 2000 by putting 36% of its internal training online. And Ed Sketch, director of education training and development for Ford in North America and Europe, says putting classic Ford courses, such as "Lean Manufacturing," online should save the company's training division at least $25 million a year. The system also will allow Ford to track the impact e-training has on business.
Graduates of the Lean Manufacturing course, for example, should be able to demonstrate that they have cut inventory costs. By early 2002, Ford also will try to sell the system, which cost tens of millions of dollars to create and has yet to be demonstrated publicly, to other companies.
TRIMMING THE BUDGET.
For now, GM expects more modest savings. The company estimates it will trim $4 million from an annual budget for executive-level courses and degree programs that can run as high as $30 million. Last year, GM offered 1,300 courses in training centers worldwide.
E-learning spares companies the cost and hassle of transporting employees to and from classes. And as more universities jump online, more and more inexpensive coursework is becoming available. On Apr. 4, for example, Massachusetts Institute of Technology announced that just about all of its courses would soon be available free via its Web site. Ford's Sketch contends that buying fleets of courses will save money as well, since e-learning companies are eager to recover their investment in developing the programs.
The GM move could pull UNext.com back from the brink. In March, the e-learning company had to lay off 49 of its nearly 400 employees. Despite the current economic slowdown, UNext CEO Andrew M. Rosenfield says he's optimistic. That's when "people invest more in themselves," he says. "We have no history on this, but e-learning is cheaper than instructor-led training, which gives e-learning an incremental advantage in economic downturns."
UNext also recently signed a deal with Thompson Corp., another major e-learning provider. UNext classes are created in partnership with universities in an alliance it has formed with Columbia Business School, Stanford University, the University of Chicago Graduate School of Business, Carnegie Mellon University, and the London School of Economics & Political Science.
But will students learn as much online? Despite enthusiasm from companies, students say there's room for improvement. In a February survey of 4,148 e-learners by Corporate University Exchange, a New York consulting firm, respondents said they would have benefited from more interaction with instructors and fellow classmates. At this point, the range of courses offered by companies isn't broad enough, many survey respondents said.
And there's always the danger that standards won't be as stringent online. "The biggest risk of online schools is that because there are no capacity constraints, you have no need to be discreet in the admissions process," says David Wilson, CEO of GMAC, the nonprofit that operates the Graduate Management Admissions Test.
Still, it's clear that e-learning is catching on. So, before you pack your bags for that seminar in the Bahamas, keep in mind that one of these days your employer may just announce the course will be held at a new location -- online.
By Mica Schneider in New York
Edited by Thane Peterson