Is the supplier market stuck in a too-rigid model?

Viewpoint by John Helmer

If you were to judge solely from the blogs, tweets and webinars of learning gurus, from the articles in trade magazines and from talks at conferences, you might believe that the mould has been broken in training. Surely we are now in a new world where learning is all technology-enabled, informal, networked, Web 2.0 literate, blended.
We’ve thrown out the old linear, instructor-led classroom model for good. Along with this new delivery environment has come a new style of learner, you might believe: self-directed, multi-tasking, demanding. You might assume that Learning 2.0 has truly arrived (or is imminently about to arrive, any minute now, honest). In actual fact, there is a noticeable disconnect between industry rhetoric and what is happening on the ground; between what is marketed and what is actually bought and sold.

Because while it’s undoubtedly true that an increasing number of training interventions are being delivered with the help of digital technologies nowadays, it is not at all clear that what is actually being delivered during those interventions is all of such a mould-breaking character.

Courses for horses

The language we use here is indicative: the term ‘e-learning’ is commonly understood to mean modules of self-paced online content; a software program that an individual learner will progress through in a more or less linear fashion: an online ‘course’. The wider meaning of the term ‘e-learning’ – referring to a variety of technology-enabled training modalities, from virtual classroom to EPSS and all points in between – is often overlooked in favour of this narrower definition. In doing this we are in danger of replacing one overly restrictive model; classroom-based, instructor-led stand-up training, sold by the day, with another equally rigid model; self-paced e-learning, sold by the hour.

A fact that reinforces this tendency is that e-learning tends to be sold and quoted by the hour. Many government tenders are judged on this cost measure of hourly rate, with cost forming fifty per cent or more of the weighting criteria in judging. Suppliers are frustrated by this, but trot through the traces none the less. The upshot is that significant government procurements end up excluding leading players in the field because their procurement makes scant distinction between hi-end, media-rich content on the one hand and page-turning material that is sometimes little more interactive than PowerPoint pages at the other extreme.

There are sound reasons why this happens, of course. Buyers need some sort of consistent measure and trainer time has always provided this in the training industry. Organisations don’t necessarily have the time or the bandwidth to investigate every supplier proposition in detail, or to get involved in philosophical debates about exactly what constitutes an hour of e-learning – which, when scenario-based programmes, blending learning and collaboration are allowed into consideration becomes a ‘how long is a piece of string’ question. Some comparison of like with like must be made, even where the two things being compared aren’t really all that alike.

Old wine in new bottles?

One fundamental fact about the e-learning industry tends to make this need even more pressing: the relative disparity in the size of supplier companies and buyer companies. Industry research that I did a few years ago showed that e-learning companies were small concerns by and large with a typical headcount of about 25 people, whereas their clients – organisations seriously able to invest heavily in bespoke e-learning development, with its front-loaded costs – tend to have headcounts of 5,000 upwards. So we have small companies selling to big companies. This puts a lot of power in the hands of the buyer – but it also gives the buyer a lot of risk. What if you award a one million pound, three-year contract to a supplier and the company goes down in the middle of year two? This level of risk produces a situation where it is in the buyer’s interest to require a measure of interchangeability from its suppliers; a degree of commoditisation of the product. Then if one company goes down, they are much easier to replace. Costs can be kept lower when everyone is offering a similar product/service.

There are limits to how similar the product/service can become, however. Training needs tend to be bespoke; the product market cannot supply all these needs with off-the-shelf programmes, much has to be custom-designed to the needs of the particular situation of an organisation. So buyers have to work hard to make their bespoke suppliers look similar to each other. And bespoke companies, by and large, co-operate: using the same buzzwords, talking the same language, and maintaining (in many instances) a high-churn staffing model where an instructional designer who is on one stand at Learning Technology ’08 turns up on a completely different stand at Learning Technologies ’09 – servicing the same client from a new supplier company.

These structural forces, inherited from the world of face-to-face training, where suppliers have similarly tended to be small and parochial, exert a reactionary drag on development in technology-based learning, tending to force suppliers into a too-rigid model. Where the pace of technology adoption is slow, the danger is that it becomes a case of old wine in new bottles.

The rise of the mega-boutique

But this isn’t the whole of the story, by any means. The forces that kept the traditional training industry small and parochial – language and cultural barriers, the non-scalability of people-based delivery – do not operate in quite the same way for technology-enabled learning. Scalability is built into the ‘product’ and is also there within the companies that supply it.

If you look closely at the operations of a service-based, bespoke e-learning content production company, you see something that is much more like an advertising agency or a management consultancy than it is like a training company – and as we know, advertising agencies and consultancies can grow very large indeed: just look at Accenture, or WPP. The cry in training has always been, ‘where are the global training brands?’ (the implicit answer being that there aren’t any). However, we are now seeing the emergence of many e-learning companies which operate across territories in Europe and the US and have global ambitions. The buyer market, with its large cadre of global multinationals, will want its suppliers to be active in the same territories and to have the same global focus. E-learning now allows these organisations to address its L&D challenges at scale in a way that traditional training perhaps did not, and the buyers will reward those companies that step up.

To put it crudely: e-learning companies need to get bigger – and they can. With the proper focus on brand and customer service, these companies can scale-up to the requirement of their customers as e-learning becomes business-as-usual, without necessarily losing the individuality and responsiveness that buyers like in so-called boutique operations. For instance, no-one would say that Saatchi & Saatchi in its Eighties heyday, lacked distinctiveness as a service brand. We are entering the age of the mega-boutique.

What I’m saying is that the present barriers to growth in the e-learning industry are not necessarily structural. They are conceptual and ideological. We need to change our conception of what a learning company can be and how its services can be bought and sold – we need to embrace the diversity and richness that is possible within technology-enabled and blended learning – if we are to avoid forcing ourselves, as buyers and suppliers, into a too rigid, antiquated model.

By John Helmer