Tuesday, August 31, 2004

Outsourcing e-learning revisited

With all of the current buzz in the media about outsourcing and offshoring, I was reminded of a paper on outsourcing that I presented at an e-learning conference in Paris early in 2001. I dug it out of my archives and discovered that the content of "Successful E-Learning Outsourcing" is still as relevant today as it was then.

My focus at the time was not on offshoring, though it gets a couple of mentions, but on the need for training departments to stay focused on being strategically positioned to support business objectives, as rapidly and efficiently as possible.
The reasons that most companies outsource are simple:

• Time to deployment: It can take you a long time to research the market, pick your development tools, learn how to use them, develop a few courses, test them, re-develop them and finally deploy them. And that’s only the start of the work involved in providing a dynamic e-learning service. Outsource providers are already high up that learning curve, have the expertise, use efficient production and deployment processes, and can get your courses online in weeks. They can also host and manage your courses and provide learner technical support until you are ready to do it in-house.

• Quality: You can’t afford to deliver a learning experience that doesn’t work, from the perspective of technology, pedagogy, administration, or support. However you define quality, your end product must meet your standards. Outsourcing the project helps you achieve this in two ways. First you are forced to define your target quality, along a number of parameters, with your outsource partner helping you manage your own expectations. Second, your partner has the experience to deliver.

• Cost: The cost of internal development can be significant. Software is the smallest, but most obvious, item on the expense list. Training and personnel costs are substantial, as is management time. Hardware and bandwidth can be prohibitive, as can learner technical support. If you factor in all your costs honestly, outsourcing should be cheaper.

• Risk: If the end result is not as expected, and you have incurred huge expenses and delays, the damage to the reputation of the learning department may be the least of your worries. If an outside provider lets you down, you at least have recourse. But working with an outsource partner inherently reduces your risk from the beginning because the project is defined in realistic terms and managed according to a project plan.

• Innovation: Your perception of what e-learning should be is limited by your own experiences and knowledge. An external provider has a broader understanding of e-learning technologies and e-learning pedagogy, so can help you avoid hidden dangers and suggest alternative approaches. Even if you decide to do everything in-house, calling for proposals from outsource companies will give you great insights into the different paths you can follow.

• Mission focus: Is it really the mission of your department to acquire technology and production skills and to engage in the development and deployment of courseware? Or is your mission more accurately to be an integrator of education, ensuring that your workforce gets appropriate learning of a quality that will improve performance to desired levels? Outsourcing can relieve you of the burden of building and managing a large infrastructure that distracts you from your true focus.

• Strategic advantage: An outsource partner can rapidly put you in an education leadership position in your industry while your competitors are still trying to acquire new skills and infrastructure. And if they need to build new skills and infrastructure, they don’t inherently have the core competencies to do the job properly. In the online world, where hardware and skill-sets are evolving continuously, in-house programming talents and infrastructures are unlikely to be sustainable assets. Hiring external talent that has to keep itself leading-edge is much more attractive. If you’re not clearly the best people to be doing a job, don’t do it. Use an outsource provider that is.

There is also, early on, a reference to the need for corporations to keep their workforce trained or risk becoming irrelevant:
The future is a place none of us has visited, yet many of us, foolishly, feel we know it quite well. But in the new economy whatever you know about how things work today cannot be extrapolated into the future without risk of embarrassment. Everything you know about learning is changing fundamentally, and the collective impact of those changes will produce exponentially more changes. It will never stop. It will only accelerate, and it won’t be smooth and predictable.

Just to stay competent in their jobs, people have to learn more, and learn more often, than ever before—and they have less available time to do it in. Companies that do not help their workforce stay competent will lose their own ability to function. It is now a corporate survival requirement that education and training is continuously available and continuously evolving. (The only alternative to continuous real-time training of employees is to view them as disposable: don’t build your own human capital, rent it from an outside vendor. We are seeing whole IT departments being outsourced to low-cost high-education countries like India, and this too will accelerate.)

It had not occurred to me at the time, but is the primary reason why companies are outsourcing so much work to low-cost countries more than just a cost-saving exercise? Or is it also happening because we are unable to train our employees fast enough to stay competitive? Is it easier to buy ready-made expertise in a foreign market than to build it ourselves? And if so, what does that say about the historical effectiveness and efficiency of our corporate training processes?

I have added a link to the full text to the Papers and Presentations section on the right of this blog in addition to the link above.

Trdev: a group worth joining

I have recently become a coordinator of the trdev listserv. Trdev is the oldest and largest online discussion forum dedicated to training and development issues. It has more than 3,000 members from around the world, and it is moderated by a small group of coordinators to ensure it stays on topic, free of commercial hype and spam, and relatively congenial. If you are not a member I urge you to check it out. Registration is required (but it's free), you can remain as anonymous and passive as you wish, and unregistering from the list is easy.

You can elect to receive every comment posted as an e-mail, get a single e-mailed daily digest of posts, or block mail altogether and interact directly on the web forum. Content is wide-ranging: from academic discussions of esoteric aspects of pedagogy to practical help with PowerPoint; from debates about e-learning to discussions about surviving management conflicts. There is always a willing group of fellow learning professionals around to engage on any issue. It's a great resource for sharing knowledge and experience, which is what the web is all about.

Thursday, August 26, 2004

Blending: efficient or deficient learning?

The term blended learning has been used to describe any learning design that uses both online and classroom activities to achieve its objectives. Like “e-learning” in the late 1990’s, “blended learning” acquired a sort of cachet, a fashionable edge that we all wanted to be associated with. But just as the term e-learning is applied to a vast array of activities, many of them dire, blended learning has often simply missed the point. At its most mundane, blended learning is merely a classroom course with the bits that can be handled by self-study pulled out and stuck into online modules. So, no pedagogical breakthroughs there. The blend is seen as a way to cut time in class and save instructor time, not as a way to actually improve on the learning outcome of the original classroom-only activity.

In most fields of endeavor we apply technology to improve performance, to get better results. Yet so often in learning, we apply technology to give the illusion of progress while silently accepting that the performance result is a step backward. Why are we so content to let slide the quality of learning outcomes in the interests of economy or convenience? Why do we need to apply expensive technological solutions, if all we are looking for is a cheaper activity with acceptably lesser results? Can’t we just do it the way we used to do blended learning back in the 1970’s – give learners a document and tell them to work through it before showing up in class? That, unfortunately, doesn’t look like progress. But if we are going to use technology, shouldn’t we make the effort to have it actually enhance the learning experience, rather than merely support it?

In the quest for learning efficiency, there are several routes to take. Efficiency is simply a ratio between output and input. In training, the inputs are seen as the direct and indirect costs of providing the learning experience; the outputs are the value of the impact that the learning has on the business. But business impacts are very hard to measure objectively, so it has become almost a knee-jerk reaction to seek efficiency by cutting inputs, rather than by increasing outputs. If you cut the input by 30% and the output drops by only 10%, you have increased the efficiency of your learning. But your learners are not as well-equipped for the task as they were before, and as an organization you may incrementally degrade your competitive edge. It takes a brave soul to plan a 10% increase in input with the aim of attaining a 30% increase in output – but smart use of blending can help.

Much blended learning looks like it was made in your local Subway. It’s a sandwich, with a discrete chunk of ILT wedged in between a couple of chunks of WBT. There’s nothing blended about it at all – it’s segregated sequential learning. That may be totally appropriate for the objectives of a particular learning experience. It may also be a real waste of opportunity.

blended illustration

Blending should integrate the different phases to achieve some kind of synergy. Each phase should draw on, and build on, the phase that preceded it, just as each phase should prepare the learner for the phase to follow. Not only that, blending should integrate what is being learned with the learner’s day-to-day activities in the workplace, so continuous transfer and reinforcement is taking place throughout the learning experience. And, where feasible, blending should blur the lines between an instructor’s role and the role of the learner’s manager. Blend the learning externally, not just internally. Blended learning offers an opportunity to move training away from its isolated classroom environment and to merge it with the learner’s real-world workflows.

None of this is difficult to achieve, technologically, but it requires a willingness to think outside of the normal content-centric mindset of traditional instructional design. It also requires learners, instructors, and managers to change their expectations and to embrace a less simplistic view of what their own involvement in the learning can be. And – there’s always a catch – the resulting learning experience may very well demand more time, not less, from learners, instructors, and managers. But the reduction in time-to-competence and time-to-business-impact are likely to outweigh the increase in personal involvement required by the blend. And because the learning is so intimately blended with each learner’s workflow, the output – the impact on the business – may be so much easier to measure and observe. This is particularly true if managers have been “blended” into the process of developing learners’ ability to apply the learning in practice.

Depending on the subject matter, priority, and context, a blended solution can incorporate self-paced work, online instructor support, supervisor involvement, peer group involvement, classroom sessions building on job-specific pre-work assignments, ongoing application assignments moderated online by mentors and managers, community threads and chat tools, and dynamic libraries of relevant materials. The less technical the training, the more appropriate a “rich blend” becomes. While clearly overkill for much basic training, such an approach is ideal for teaching things like core management methodologies and soft skills such as sales and customer service.

One of the reasons that many blended solutions are of the Subway sandwich variety is that anything more ambitious requires a management system that is a little more sophisticated and flexible than the average LMS. If you are going to manage a well-blended learning experience, your instructors need to monitor learners more closely than they would if they were simply thrown into a stand-alone WBT course. Ideally, learners will communicate with an instructor throughout the WBT experience, using learner-specific workplace assignments as the catalyst for this interaction. Because the learner works on real-world applications, the learner’s manager can be brought into process, and can take on a secondary mentoring role. The learner-instructor interaction will usually be asynchronous, probably by e-mail. Most off-the-shelf learning management systems have difficulty supporting anything other than the sequential sandwich version of blended learning.

Another barrier is cultural. For many, the culture change imposed by ambitious blended learning designs is hard to deal with, and it can be the biggest obstacle to success. Learners may have to demonstrate capability and produce results, and can’t expect to “pass” just by showing up. They must be accountable for the quality of their application assignments. Instructors have their credibility tied directly to visible learner results, and there is real responsibility for learning outputs (no longer a smile sheet exercise). Instructors also have a responsibility to mentor learners through a much longer period of time. Managers have to create and protect learning time, and support the application of learned skills.

All of this puts a burden on the training department to build comfort with technology, and to build comfort outside the ILT-zone. Staying on schedule becomes critical, and may be difficult for instructors who end up managing overlapping groups of learners. They also need to develop comfort with managing technical issues and responding to technical queries that learners may direct at them. And they may have to become more nurturing than usual, because those who need help most, take full advantage of the mentor who is only an e-mail away.

So to make a “rich blend” work effectively, you need to set expectations early and often. You have to ensure that learners, instructors, managers, and administrators all know how different the blended process will be, and they must buy into new levels of individual responsibility.

If you get the learning design right, set the right expectations, and have the systems in place to manage processes that may be a little more complex than usual, you can achieve greater efficiency in your learning. And you can do it by increasing the outputs, not by cutting the inputs. Ultimately, that has to be good for corporate competitiveness.

Wednesday, August 25, 2004

E-learning’s lessons from e-business

I have often bemoaned the fact that training people do not look to what their colleagues in other departments are doing for examples of how technology can be applied to learning initiatives. There’s a bigger picture out there, yet “learning professionals” often get so precious about their perceived uniqueness that they can’t see the valuable lessons in e-business. The truth is that there is nothing that we do in e-learning that has not already been done, and done a great deal better, in e-business.

Nowhere is this more apparent than in the issue of standards for LMS and content models. Over the years I have drawn fire from the SCORM lobby and from vendors of LMS systems for my argument that these initiatives have limited relevance and applicability in the expanding world of online learning; and that through the excessive hyping of these initiatives the training market has come to have tunnel vision about what technology can do. Worse, the boundaries of the technology have restricted the vision of what learning can and should look like. Further, and this is probably most important, by solely adopting standards and systems exclusively designed for training, the learning function in an organization has effectively gone proprietary relative to other enterprise knowledge flows. So instead of being integral to the corporate nervous system, learning distances itself. This is not a smart thing to do in a world where real-time integration of data throughout an organization and its partners is a prerequisite for survival.

Trainers have, from the beginning, looked for easy solutions that let them apply internet technology without themselves having to become geeks. They sought to exploit the web at the same time as their colleagues in Marketing were seeking to exploit the web. IT departments were typically reactive rather than pro-active where providing internet programming services was concerned, leading to a great deal of outsourcing by both trainers and marketers. Ten years since the first secure internet e-commerce transaction took place, e-marketing and e-commerce are sophisticated and effective. E-learning is still pumping out mundane canned product, still trying to get its LMS to integrate with enterprise systems. Maybe marketers had bigger budgets or more creativity or more political clout. Maybe marketers had more intense competitive pressure or more immediate ROI considerations. Maybe marketers took understanding and reacting to the needs of their customers more seriously. Or maybe marketers were more willing to learn about and adapt to realities and more motivated to seek opportunities across a broader further horizon.

I am a marketing professional, by education and experience, so I am not altogether unbiased. But I am also a trainer, having spent two decades or more training people around the globe in marketing, sales, and communication. Training is, I suppose, a more honorable profession than marketing. But I feel embarrassed to call myself a trainer these days, because the achievements of that profession over the past few years have, on the whole, been inexcusably dire. It is our responsibility to prepare people to perform well in tomorrow’s world; yet as a profession we seem unable to even grasp the realities of today’s world.

What are some of the realities that e-business is dealing with? Here are a few that might have some bearing on the way we view our training initiatives:

Process interoperability: To be an e-business, your processes need to connect with each other seamlessly and instantly, across departments, up and down hierarchies, worldwide. Not only that, they have to connect with the processes of your suppliers, partners, and customers. To accomplish this real-time flow of data, your systems should be as open, non-proprietary, flexible, and web services standards based as possible. Are your training systems still effectively proprietary to your department, or are they transparent to the corporate knowledge flow?

Value focus: The core competencies of an e-business are defined not so much by those processes that it does well as by the value that it can add to the processes of its business partners, suppliers, and customers. What value do your learning initiatives add to the processes of your corporate customers? What value do they add to the learning processes of your learners?

Context focus: In e-marketing, demographic targeting is losing ground to contextual targeting. You want to present your product in a light and at a time that makes it pop from the background blur for a customer. Marketing messages are tailored to the target customer and presented when that customer’s mind is in the most receptive context. Demographic marketing is too shotgun, too wasteful and ineffective, in a world where technology makes surgical precision possible. Are your training experiences still canned one-size-fits-all affairs? Are they still “events” rather than being woven into the fabric of a learner’s day? Are they at least customized or personalized?

Byte-sized messages: In marketing, it’s commonly accepted that the attention span of your target customer is shrinking exponentially. Thirty seconds is too long for an ad on television. A complex proposition has to be simplified. The elevator speech is over; if you can’t print it on a T-shirt to be read in passing on the street, your message is not clear enough. This blog is already 2,000 words too long. As an e-learning designer who cut his teeth on forty-hour certification courses, I used to believe that you can’t learn anything useful in an hour, because sixty minutes is just too short. Now I think you can’t learn anything useful in an hour because sixty minutes is just too long. The implication is that you have to eradicate all of the content, media, and interactivity that are relatively gratuitous, and focus on communicating as powerfully and economically as possible.

Text rules: A frequent debate in both marketing and training circles is whether text has greater value than images. If words are well-crafted, they communicate more memorably and often more precisely than rich media. Images are open to interpretation; words can be crafted to be unambiguous. Words have immediacy and meaning in a world where seconds are precious. Hence the popularity and dominance of Instant Messaging, SMS “texting”, and e-mail. In the blogging and XML-news world, RSS (basic, unformatted text abstracted from websites) is becoming preferable to actually visiting the original media-rich site. It’s true that well-crafted rich media can often communicate better than text, and where your target group has literacy challenges alternative media are essential. But how much of the rich media in your learning experiences is well-crafted communication, and how much is simply gee-wiz gratuitous creativity?

Community and human interaction: Part of the popularity of text stems from the fact that, among the literate, anyone can communicate instantly with other people using text. Drawing a picture or snapping a photo usually takes time. E-businesses understand the value of human communication in their processes. Every system, every process, every product or service in every corporation is conceived and designed by human beings. As market dynamics change at increasing speeds, those processes have to change too. It’s often claimed that eighty percent of all learning takes place informally; and it takes place largely as a result of interaction among people. So systems and processes have to support human interaction in order to stay viable. Such communities are an important component of context. Do your learning experiences leverage, support, or even allow interaction among the learners, instructors, and subject matter experts? And do you have a commitment to nurturing and sustaining any communities that form so that communication can benefit learners beyond the “course” experience? If you have effective communities of practice in place, do you even need a course experience?

I could extend this almost indefinitely, but that would make me guilty of ignoring my own advice. E-learning should be more than courses online. Look to e-business, e-marketing, and e-commerce for clear examples of how technology can be applied to everything from seamless integration of data, to clarity in message, to targeting of context, to personalization of content, to customer service. You don’t have to re-invent it all. Some great solutions already exist within your own corporation.

Monday, August 23, 2004

Marketing myopia - Big TV and IOC bureaucrats still don't "get" the web

Big corporations are still not up to date with what real people are doing with technology. And the freedom of the internet is increasingly coming under attack from corporate interests. It was music and movies that started it. Now it is international sport.

First, the IOC tried, rather successfully, to get those organizations streaming live web video of Olympic events to block access to anyone trying to log in from a country such as the US where the IOC had an exclusive television coverage deal. Instead of watching a live webcast on a Finnish site, I have to hope that NBC will broadcast the event, and hope that I will somehow be able to find out when that substantially-delayed taped broadcast will take place (NBC likes to keep schedules a little mysterious to sustain audience numbers).

I don't particularly object to that -- NBC did pay nearly $800 million for coverage rights. Nor do I object to the sustained pretense of their commentators and anchorpersons that all we are watching is actually live. NBC is providing entertainment, not news, so we don't need to be told immediately when the US wins another medal. Four to six hours later is fine. For real-time news we can go to CNN or to the web.

Nor do I object to the IOC putting logo-police in place to prevent spectators from wearing clothing that promote competitors to McDonalds, Visa, and other sole-sponsors. The Olympics, after all, is not about encouraging competition.

But what I DO object to is the latest outrageous attempt by the IOC to censor blogs from the event. According to CNN:
The International Olympic Committee is barring competitors, as well as coaches, support personnel and other officials, from writing firsthand accounts for news and other Web sites.
Anyone who is at the Olympics in any official capacity, other than a journalist, is not allowed to keep an online diary. They are welcome to take notes, but may not post them to the web till August 29th. Oh, and even after the games are over they may not post photographs on their blogs unless such photos are authorized by the IOC.

NBC doesn't get it. The IOC doesn't get it. If they did, they would be encouraging as many participants as possible to blog their experiences. They'd have a blogging cafe in the Olympic village. If the IOC were really interested in promoting the excitement of sport at this level, they would leverage the medium that can truly personalize that excitement. But it seems that the IOC is more interested in protecting the commercial investment of its traditional and out-of-touch television partners than in spreading the excitement of the games.

The marketing myopia of it aside, this is where digital Intellectual Property issues hit people where they feel it. What happened to the freedom and anarchy of the web? What happened to the internet as a medium of free expression? Four years from now the IOC will probably comprehend what they missed this time round, but by then we may well have moved on from blogs and streaming video to something better. The IOC will be geared to support what's hot at the time only if NBC and Visa and McDonalds have figured out how to get a piece of it.

Friday, August 20, 2004

Amazon takes a Chinese bride

Amazon.com, one of the pioneer powerhouses of e-commerce, has joined the rush to gain a foothold in the booming China market. Amazon has bought China's Joyo.com, China's largest online seller of books, movies, music, and toys, for a mere $75 million.

The Chinese online population is growing at an astonishing rate. Already at 80 million, it's expected to hit 100 million active at-home users by year end. That's closing fast on the US (pretty much plateaued at 130 million) and way ahead of numbers three and four Japan (34 mil) and South Korea (31 mil).

The days when English was the dominant language (and the latin alphabet the dominant form) of the Internet and of e-commerce are over. It's time to install all of those foreign language packs that allow your computer to show other writing systems without all the error messages.

Maybe babelfish and similar instant sort-of-translation services will finally come into their own. Enter Amazon.com's founder Jeff Bezos into babelfish, translate him to traditional Chinese, and then translate that back to English and you get an auspicious "Outstanding husband Bezos". I wish the happy couple well!

M-learning: If God is on your mobile phone, why not phonics?

Wired magazine has been tracking the innovative uses that various religious groups are finding for cell phones. If you are a Muslim, your phone can point you to Mecca. Catholics can get daily SMS text messages from the Vatican (just send the text message POPE ON to 24444 if you are a US subscriber of AT&T Wireless, Verizon Wireless or Cingular -- but it costs a significant 30c per day). For $3.25 a month, you can even get a daily multimedia spiritual thought delivered to your phone by Deepak Chopra. Subscriptions to these services are booming, which proves that, given a willing target group, even low-tech mobile phones can overcome their obvious limitations and be used for learning.

I have said before that m-learning using phones as internet access points may be a way for developing nations to bypass the infrastructure barriers to "traditional" e-learning. When you consider that one of the most basic requirements in such counties is literacy training, and that the elements of such training are text and audio, the phone is potentially a great way to deliver both in small learnable doses. What better way to learn the alphabet than on a device that is with you all the time and which can give you crystal-clear audio while showing you text?

Phonics on the phone? All that is needed is someone to sponsor it. If such learning were available on an 800 number, paid for by the government or some corporate sponsor, people would call in. If the learning bytes were transmitted to subscribers as storable SMS-plus-audio (MMS or multi media message service), that might be even cheaper. Or if simple phonics learning games designed to be downloadable to phones were available, they'd be used.

Governments (and those like the World Bank who nudge them) need to get more creative and less traditional, more pragmatic and less dogmatic, in the way they think about solving their educational problems. In the internet era of rapid prototyping, nobody builds massive oil tankers when a fleet of cheap inflatable high-speed boats can accomplish most of their goals. Sometimes a little bit of success right now can contribute dramatically to the success of The Big Plan long-term.

Thursday, August 19, 2004

E-commerce conversion rates are rising

In an upcoming press release on their Q2 2004 E-Commerce Site Trend Report, DoubleClick is reporting an increase in online purchasing behavior. DoubleClick is the dominant player in online ad-serving -- when you see an ad on your screen, chances are it's been put there by a DoubleClick server, often in response to a cookie that they put on your system earlier. While not advertisers themselves, or even an ad agency, they are in the business of encouraging clicks, tracking them, and analysing their impact.

There was a sense that with the growing saturation of online advertising, and the growth of ad-blocking software, the effectiveness of online advertising would decline. Seems like that is not happening yet. DoubleClick says that the e-commerce conversion rate is increasing, up 14 percent to a significant 5 percent of ad-clickers actually making a purchase.

Average order values are up too, by 15 percent. How big is the average online purchase? In Q2 2004, it was $134. Now averages are misleading because they don't tell you anything about volumes of purchase at different price points: a thousand people buying a DVD on Amazon plus one person buying a Ferrari on eBay will result in an average spend that is not representative of either segment. But as an aggregate trend it does indicate a greater level of economic activity online, and that's encouraging to online marketers.

If you have ever wondered about how closely your online behavior is being monitored by unseen eyes, here's some data to feed your paranoia. DoubleClick says that those visiting sites spend on average the same amount of time per visit as last quarter, but hit eleven pages, up from ten, in each visit. And they put items in the cart but abandon the cart without making an actual purchase 24 percent more often.

The conclusion is that online visitors to a site are behaving with less caution. More confident visitors who are better practiced at finding the stuff they are interested in make for a faster-moving target audience whose attention is harder to grab. Designing the selling functionality and visual pull of your site continues to be a growing challenge for e-marketers.

Wednesday, August 18, 2004

Book me a passage to India

Offshoring accelerates

Time was when going off-shore was what companies did to avoid taxes. Now everyone is doing it to cut labor costs, improve customer service, and speed time to market.

The need for English-fluent skilled IT workers in the 1980s led US companies to recruit from India. But that was fraught with complications. The H1B visa system that allows an annual quota of tech-workers into the US was inadequate, and there were growing political pressures from American workers fearful of their jobs being stolen by those foreigners. So US companies turned the solution on its head. Why bring Indian workers here and pay them American wages, when you can hire them in Mumbai at a fraction of the cost? And why do this for only the proportion that used to be foreign – get rid of all your US tech workers and replace them all offshore.

There was for a time some kind of social conscience which slowed this process. On my arrival in the US in 1998 I suggested using India-based programmers in my fledgling company, and received such scornful reactions that I never raised the issue again. Now most of the e-learning development work that I used to do is done in India.

I mentioned recently how Reuters is getting some of its editorial writing done offshore. Now this article from the New York Times talks about how the financial sector is offshoring increasingly sophisticated business functions to India – a trend which will cost American bankers 2.3 million jobs, but save banks and securities companies (and their shareholders) billions.

Obviously, cost savings are a major driver. According to Celent Communications ,
“in 2003 the average M.B.A. working in the financial services industry in India earned 14 percent of his American counterpart's wages. Information technology professionals earned 13 percent, while call center workers who provide customer support and telemarketing services earned 7 percent of their American counterparts' salaries.”
You can’t ignore savings of 80 percent or more on your payroll. And because labor is so cheap, companies can afford to get work done faster. Time to market can be cut, as can response rates on customer service issues. As a shareholder in a company that is offshoring, you are smiling all the way to the bank.

India keeps graduating more technical people than the US, so the “economic discontinuities” are likely to be around for a while. US enrollments in computer science degree programs are apparently down 30-40 percent on 1999. A June 19 article in the LA Times said computer science enrollments at MIT dropped 44% from 1999 to 2003. "The decline has hit just about every type of school. At UC Berkeley, the number of students enrolling in computer science and computer engineering dropped 41% in that period. Enrollments at Georgia Institute of Technology in Atlanta fell 45%. Nationwide, new enrollments are at 1996 levels — and few expect them to rebound soon."

In fact, we may be reaching a tipping point, where Americans don't want to study computer science because they don't think there is local employment or a career future in it any more. But, as happened in Japan, Korea, Taiwan, and other economies boosted by low labor costs, India’s cost advantage will eventually be eroded by rising demand and growing affluence. By that time, will China be waiting in the wings to suck the remaining knowledge-worker jobs from the US?

From a purely self-serving perspective, what are the implications for OD&T professionals in the US? Do we gear up to train people in India? Do we relocate our corporate campus? Or do we get “offshored” ourselves? A lot of Indian companies are pitching themselves in the US as “India’s leading e-learning development company” – I get calls or e-mails from at least two a day looking to “partner” with me. I’m predicting that the next Indian industry to take off as an offshoring solution will be not just e-learning development, but corporate training, period. If you’re not in bed with an Indian company by that time, you might be sleeping on the street.

Tuesday, August 17, 2004

The internet (sic) gets ordinary

Wired Magazine, the real journal of the e- generation, has formally downgraded (or promoted) the Internet to the internet. This is major news.

In the past I have been an annoying stickler for correcting the spelling of anyone who slipped and used a lower-case "i" in Internet or a lower-case "w" in Web. These are, after all, formally defined terms. An internet is any collection of networks that communicate with each other. The Internet is the collection of networks that communicate via TCP/IP.

But if Wired is acknowledging that the Internet has become such an ordinary mainstream part of daily life that it no longer warrants a capital, I'll stop annoying people and follow suit.

Wired has also de-capitalized the Web and the Net. A web is a web. The Web is technically all the resources and users on the Internet that use HTTP. But both the Web and the Internet have overflowed their earlier boundaries, and today increasingly diverse access points and protocols co-exist in a bigger information/communication environment that I think of as the metanet. The World Wide Web Consortium now defines the Web as "the universe of network-accessible information, an embodiment of human knowledge." So I guess that's just about everything.

Removing the initial caps is in effect a promotion, because it acknowledges the relative ubiquity and mainstream-ness of the medium. As Wired puts it: "in the case of internet, web and net, a change in our house style was necessary to put into perspective what the internet is: another medium for delivering and receiving information. That it transformed human communication is beyond dispute. But no more so than moveable type did in its day. Or the radio. Or television."

How mainstream is the internet these days? At least in the US, it's routinely used for every day tasks, without the attendant anxiety or wow-factor that was there a few years ago. We use the internet without really being aware of what we are doing -- rather like the way we throw a light switch and just expect electricity to do its thing.

According to a report released a couple of days ago by the Pew Internet and American Life Project: "Fully 88% of online Americans say the Internet plays a role in their daily routines. The activities they identified as most significant are communicating with family and friends and finding a wealth of information at their fingertips. And 64% of Internet users say their daily routines and activities would be affected if they could no longer use the Internet."

Those in learning and development who still maintain that the internet is a poor substitute for face to face communication might be swayed by the 85 percent of Americans who say the internet is a good way to communicate or interact with others.

But the study also reveals that while the internet is the preferred medium where efficiency is important, most people still default to doing most things the real-world way.

Thursday, August 12, 2004

Global e-commerce turns 10

E-commerce has been here for a whole ten years, according to this article on CNET. A classmate of the founder of NetMarket purchased a CD online on August 11 1994, using a secure commercial transaction system for the first time, and kicked off a change in the way the world does business. This year, according to Forrester Research, online retailers in the US alone will take in $144 billion, making one dollar out of every fifteen spent an online dollar.

Whether it was NetMarket or the Internet Shopping Network that actually processed the first secure credit card purchase on the Internet in August 1994 doesn't really matter. That the US government only legally permitted commercial use of the Internet in 1995 is irrelevant.

What is significant is the pace at which this has happened, and the pace at which it is accelerating. In the US, e-commerce revenues this year will be 27 percent more than last year. In other countries the growth rate is higher. Despite anxieties about online security, the convenience of doing business online continues to drive more consumers to their browsers, and stimulates more businesses to do a better job of providing their products and services online.

The globalization of the Internet consumer base has prompted unprecedented attention to global e-commerce among sellers. American corporations are currently spending an average of $500,000 on globalizing their sites for every billion dollars of corporate revenue. How global is that Internet user base these days?

According to A.C. Nielsen and others, the US has about 139 million active at-home Internet users, followed by China with 80 million. Japan had 34 million, South Korea 31 million, Germany 27 million, the UK 21 million, France 14 million, and Brazil 12 million. The growing powerhouse, of course, is China which will have 100 million Internet users by year end. And the absolute numbers don't tell the whole story -- it is the proportion of the population that really determines how intensively the technology influences business culture.

Remember the clicks-vs-bricks arguments of a few years ago, and the assertions that retailers could never make a profit online? Mere teething troubles and learning curves. When e-commerce actually matures (if ever), those early analyses will seem so short-sighted. The same will be true of the superstitious early attitudes to most aspects of e-business and e-learning.

Wednesday, August 11, 2004

Forbes gets radical. Reuters too

Forbes is pioneering something quite out of character. Old-school conservative journalism is not supposed to meddle with leading edge thinking. But Forbes.com has taken a look at how much money Google makes out of selling keywords to trigger ads in its search engine and is going one better: advertisers can now buy in-context in-editorial keywords in Forbes articles that pop up small ads when readers roll over them with a mouse. Readers can identify an ad-linked word by its double-underlining.

There are examples in this Forbes article about another radical journalistic move, this time by Reuters. Reuters is outsourcing to India. Nothing new there. But what is being outsourced is surprising: it's journalism, and journalism about American companies at that.

Time was when to do secondary research you had to be on the ground in the area. The Internet and low-cost telecommunications have eliminated that geographic requirement. It seems these Indian journalists will be restricted to data gathering and graphics, at least for now. But I imagine that in the near future we'll be seeing feature articles coming from India-based writers. Maybe they'll be less tainted by US partisanship. And the eloquence of writing in American journals may finally start to improve...

The big issue in training's future

At a recent conference I heard somebody say, without even a hint of irony, “Change management is like so twenty minutes ago.” One of the essential big-picture issues that T&D has to deal with, now and increasingly so in the next few years, is managing change and its repercussions – for the organization and for training itself. It’s oxymoronic, and dangerous, that change has become a cliché.

The fact that change is so talked about should not dull our senses to the rapidly dissolving conceptual foundations on which nearly every job, department, division, organization, and industry is built. Change management used to mean dealing with significant strategic one-time adjustments in an organization, such as mergers, relocating, or “downsizing”. Now change is altogether different. It’s pervasive, relentless, unpredictable, non-linear, and frighteningly fast. Remember the 1970's arcade game Space Invaders? OK, how about Doom3? The more attackers you shoot down, the more come at you, faster and faster, until inevitably you just cannot keep up. Game over. Welcome to 21st century business. Your only salvation may lie in collaborative teamwork.

Because the landscape is changing so rapidly, opportunities and threats are often first identified as they recede in the rear-view mirror. By the time we have configured our business to exploit an opportunity, it’s gone. By the time we have developed a training course to address an issue, it’s no longer important or it has a completely different context.

Training departments used to be able to take the time to do skills audits and gap analyses, put together relatively stable and sound annual plans, and invest in building solid training solutions for identified problems. You could take one hundred hours to develop one hour of training product, knowing that what you produced would be relevant and effective for long enough to generate a healthy ROI. While that may still be true for certain core training needs, it is not true for training in those areas where a company’s differential advantage is generated and sustained. I am not just talking about the “sharp ends” of the business; I’m talking about the inherent smartness of the business.

Individual employees and entire companies need to be better able to anticipate, generate, or react to change. That means making them smarter, faster, more flexible, more synergistic. So training’s role, in part, needs to be more developmental. Identifying and building the analytical thinking, communication, and decision-making skills in individuals at all levels, as well as in teams and business units, is becoming more vital than ever.

It's not enough to re-think training as "learning", important as that shift is. To stay relevant and effective, T&D must itself change its perceptions, processes, and outputs. It has to be pro-active, which means being a formative part of company thinking, rather than an after-the-fact service provider to the business. Training is not a medication to be administered after diagnosis. It’s not a diet or an exercise regime to achieve fitness. It should be an integral part of the organizational DNA that creates and sustains a healthy metabolism.

Training professionals have to be willing to change their perceptions of what they do and of what “good practice” is. The well-designed polished course may not be relevant. Training departments as gatherers, re-formulators, and disseminators of skills and knowledge may no longer be relevant. Adjusting Training’s own processes to be more anticipatory and more rapid in response is critical. Collapse or eliminate the course development lead-time; create dynamic learning processes that leverage the skills and experiences of participants; integrate SMEs and managers into the actual learning process; lose the notion of training as a series of products and recast it as an integrated collection of perpetually evolving processes.

These are not idealistic conceptual daydreams – they are essential, urgent priorities.

Monday, August 09, 2004

The wireless broadbandwagon rolls on

Digital Media Europe is reporting that the city of Preston in the UK has gone wireless. And Nantucket Island is giving one megabit-per-second WiFi access to residents and visitors over an area of 800 acres. These hot-zones are just the latest in a growing tidal wave of wireless-ness that started in the US with a few hot-desk offices and a few wireless home networks. Then a couple of far-thinking university campuses went wireless so students could access the Web, the Internet, e-mail, online communities, and collaborative learning tools without having to find somewhere to physically jack into the campus intranet.

Then Starbucks put WiFi hotspots in its coffee shops to attract people in to check their e-mail (and buy an espresso). Then hotspots went into airport lounges. Now McDonalds is putting hotspots in its outlets; hotel chains and conference venues are becoming wireless zones; and many industrial parks, corporate campuses and town centers have joined the bandwagon. It is relatively cheap and easy for a business to set up a WiFi hotspot, and users cover the operating costs. And it gives a competitive edge to businesses trying to attract customers.

What is remarkable about this is how fast it has happened. From nowhere, WiFi became a $7 billion business in 2003. A year ago there were 28,000 hotspots around the world (12,000 of them in the US). WiFi was still young. A mid-2003 MORI survey in the UK revealed that while one in three people knew what a WiFi hotspot was, most had no idea at all:
5 percent of all respondents thought it was a nightclub, while 10 percent of single respondents identified it as a nightclub
2 percent of all respondents thought that it was something smelly that has been left out in the sun for too long
2 percent thought that it was a new hi-fi
1 percent thought that it was a posh hot tub
1 percent thought that it was a sunbed
1 percent thought that it was a microwave ready meal
1 percent of married respondents identified it as trouble with the wife
10 percent of 15-to-24-year-olds in the UK thought a Wi-Fi hotspot was an area with good mobile phone reception.

An ABI research forcast 200,000 hotspots worldwide by 2007, with growth in Europe outstripping that in the US.

In parts of the US, WiFi devices are becoming as ubiquitous as mobile phones (true, you can surf the web on those too, and you don't need to be near a WiFi hotspot to do it -- though WiFi mobile phones have recently made an appearance on the market). All you need is a wireless device, say a laptop with a wireless card (pretty much standard in most laptops today) or a wireless PDA, and you have instant high-speed access to the Internet. You also need an account with the hotspot provider. But with hotspots mushrooming, competition is pushing down already low access costs.

To find out if you are in range of a wireless LAN, you simply have to turn on your laptop, PDA or pocket PC. But that can be awkward. So now you can get a key-ring size device that acts like a WiFi geiger counter, detecting nearby hotspots. All for less than $30.

This little device can't tell you anything about the networks in your vicinity, other than direction and signal strength. So an alternative is to download for free a copy of NetStumbler, which will tell you a great deal about the wireless LANs within range, and help you log on. NetStumbler is an indispensible piece of software for avid Wardrivers -- sort of modern-day train-spotters who like to roam around finding and documenting available wireless networks. But be warned, it is illegal to use a corporate LAN without authorization, and hopping on to check your e-mail is as illegal as hopping on to steal confidential information.

When the latest WiFi standard, 802.11i, rolls out in a month or two, many of the security fears that have kept corporate LANS hardwired will disappear, further boosting the number of wireless devices capable of using public WiFi hotspots. Corporate wireless network admins are getting a lot smarter about security. Eventually home users will too. (Incidentally, the easiest way to hide your home wireless network from wardrivers is to change default password settings and disable SSID broadcast, which stops your system from responding to broadcast probes).

Thursday, August 05, 2004

Personalization vs. Privacy

A recent study. by ChoiceStream shows that most Internet users (81% of them) want some kind of personalization when online, and they are willing to sacrifice some privacy to get it.

As the volume of information and complexity of services on the Web keeps expanding, personalization is one way to shut out much of the clutter. If a site you are visiting recognizes you, it can steer you to those content elements that match your interests or demographics. But the downside is that the site needs to collect and apply your personal data in order to do a decent job.

It can get this data in a number of ways: by asking you for demographic, preference, and personal information, such as age, name, location, likes and dislikes; by retrieving records of your past transactions, such as things you bought, credit card used, mailing address provided; or by tracking your behavior and recording the site you came from, the things you looked at, the time you spent, the words you searched for. Most sites do all three. Some (such as Yahoo! and Google) aggregate the data to refine their systems; others (Amazon) use it for personalization; still others may compile information that is provided to business partners.

Not surprisingly, most surfers are willing to trade personal information for personalization: 64% are willing to provide preferences and 56% are willing to provide demographics. But people are (quite rightly) wary of being tracked and profiled -- only 40% said they would trade tracking for personalization. People still want to be in control of what information is collected. And, according to the study, the older you get, the more wary you are.

The issue of privacy is big in online retailing, but in e-learning it is not yet an issue. It's an area where the individual provides a great deal of personal information and is tracked in detail, yet there is rarely any personalization payoff. When I talk to training professionals and ask them about their privacy policies and practices and what they are doing about data mining or data security, it's astonishing how often I get a blank look in response. It may take a couple of high-profile cases before privacy in e-learning gets the attention it deserves.

Online Advertising Still Underused

One of the key factors in deciding where to place advertising is the size of the audience. You would expect a medium's share of ad spend to match its share of audience, more or less.

But despite the Internet's being a mainstream medium these days, and despite its ability to host increasingly sophisticated creative product, it is still not attracting as much advertising spend as its traffic would warrant. According to this article, in the UK the Internet accounts for 12 percent of media consumption, but nets less than 3 percent of advertising revenue. The mismatch is replicated in other countries. Arguably, the Internet is a less efficient medium, but not to that extent.

In part, this discrepancy may be because many advertising creative professionals and media buyers still don't really "get it". In part it is because it is so hard to target specific audiences. To many, Internet "traffic" is too much of a moving target, so they concentrate on the equivalent of outdoor ads -- buying keywords on Google or placing banners on portals -- in the hope of being noticed in passing by someone relevant. Others focus on pop-ups and pop-unders, in the hope of annoying people into doing business with them. Traditionalists will place context-relevant ads alongside targeted editorial in online magazines, newspapers, and (increasingly) blogs.

Another cause for the lower than expected investment in online advertising could well be the ready availability of detailed performance metrics relative to those available in other media. What was the ROI on that spot on TV last night? Hard to say. What was the ROI on that banner ad in the Washington Post Online article? We had a 2.7% click through rate and 0.3% conversion.

If you don't know how badly or well you are doing, you don't have too many reservations about staying the course. Poor performance is much more measurable online, so it can be a discouraging medium to invest in. Though I imagine if it were possible to accurately measure performance in other media the numbers might raise eyebrows.

Wednesday, August 04, 2004

IBM outsources to South Africa

This Computer Weekly news item says that IBM is using its operation in South Africa as a place to outsource to as a back-up to India. The skill sets and native English are every bit as good as in India, and the cost of that skilled labor is currently comparable.

The added advantage is that it is in the same time zone (more or less) as Europe, so communication is easier. (At least in theory -- the Internet infrastructure is nowhere near as developed as in India, as anyone who has ever waited minutes for a South African Web page to load will verify). An obstacle to any large-scale outsourcing to SA down the line may be the small size of the qualified workforce compared with India, which graduates 170,000 engineers a year (70 percent more than the US!).

But with recent government moves within South Africa to "partner with" India and Brazil in fields like e-learning, there may be some telecoms infrastructure progress in the pipeline, and maybe even some accelerated government investment in technology training. There's an interesting article on this in AllAfrica.com's archive, but irritatingly you can't get to it unless you are a paying subscriber (didn't that business model disappear years ago?).

Visualizing data

There is more data being produced today than anyone can get a useful handle on (more information has been produced in the past five years than in the total of all of previous human history). Hence the growing interest in new ways to search it and understand it, and the emergence of increasingly sophisticated data mining tools. If the Google IPO is any indicator, bringing clarity into info-chaos has real value.

Now, in conjunction with The Hive Group -- vendors of visual approaches to business analytics -- NewsIsFree has come up with a visual map of the news. You can decide on criteria such as popularity or recentness to determine size and color of the items represented.

The Hive Group is the same company that produced the visual map of a Google search. It's a great start, but the map is somehow not very helpful. The only dimensions you have to indicate importance are size and color. A 3D fly-through approach would be much more useful, but of course you'd need a high-end machine and some very potent software to do it.

Java aps have their limitations when it comes to data visualization. I like the interactivity of blogalization from TouchGraph, and their more elaborate ThinkMap and InXight products are very cool. At the high end of the price range (we're talking five to six figures) are the integrated 3D systems from companies like Visual Sciences (not strong on Web presence themselves but very hot at helping others see their online performance using real-time collection, processing, analysis and visualization of their data).

I have always wondered about the disconnect between the poor graphics quality that we accept in our business apps and the high graphics quality we demand in our entertainment apps. With this week's launch of Doom 3, the gap just widens. We don't live in a 2D world, and our data is multidimensional. Yet most of us still try to understand it by pulling it into flat gray tables in Access. The dimensions by which you analyse data usually determine the nature of the insights you will extract; it's typically impossible to discover unexpected relationships of any sophistication when your lens is a spreadsheet.

I'd like to think that the next great leap forward in tools to mine the metaNet will be multi-dimensional, un-preconditioned, and creative, with a touch of real-world, real-time insight thrown in, all very graphically rich. Maybe that's a blogger, with a Web-cam.