Educate Yourself

Learning management on the software-as-a-service model offers HR professionals an affordable option.

By Bill Roberts Aug 30, 2010
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September coverWith a workforce that grew rapidly from a couple of hundred five years ago to several hundred today, GECU’s HR professionals needed help managing employees’ learning and training. The El Paso, Texas-based credit union adopted learning management system software that the vendor hosted, but "the burden for managing the software was on us," says Joshua Gomez, GECU training director.

Today, that burden has been lifted.

In 2008, GECU replaced its software with a learning management system on the software-as-a-service (SAAS) model. The vendor hosts, maintains and upgrades the software. Gomez’s training staff does what it does best: finds and chooses off-the-shelf content; develops GECU-specific training; and engages in learning management activities, including scheduling, evaluating, organizing instructor-led webinars, and creating reports required for financial institution compliance.

Gomez can point to several metrics that illustrate the return on this software investment, but his words tell it best. "It is a good investment for any organization with rapid or incremental growth. We owe it to employees to offer development opportunities." He says these opportunities are not possible without a SAAS learning system. "If I did not have this SAAS, I would need six or seven more people to keep up."

SAAS makes learning management available to smaller organizations whose HR professionals previously found these systems not feasible financially or operationally. The SAAS delivery model frees training professionals to focus on ensuring employee participation in learning activities, acquiring or developing content, and managing a smooth operation that tracks participation and completion, often for certification.

Unwinding a New Twist

In "A Field Guide to Learning Management Systems," Ryann K. Ellis, editor of Learning Circuits, a publication of the American Society for Training & Development, defines learning management systems as software used to administer, document, track and report on training programs, classroom and online events, e-learning programs, and training content.

She concludes that a robust system:

  • Offers self-service and self-guided services.
  • Assembles and delivers content rapidly.
  • Consolidates training initiatives on a scalable web-based platform.
  • Supports portability and standards.
  • Personalizes content.
  • Enables knowledge reuse.

These systems manage training and educational records, distribute courses via the Internet, and often have features for online collaboration.

Until recently, learning management systems were available mostly on premises: Buy a software license; load your copy of the software on your hardware on your premise; implement it, often with customization; and maintain the software and hardware, usually with support from internal information technology staff.

As with other HR applications, such systems are now available on the SAAS model: The vendor owns and operates the application, maintains the hardware, and handles security and upgrades. The customer configures but does not tailor the features, owns the data and accesses the application via the Internet, usually for a per-user subscription fee.

Typically in the past, only very large organizations had the technology infrastructure and staff to handle on-premises systems. Today, all the major vendors are moving to SAAS, says Bruce Walton, founder and principal at Walton & Associates, a Montclair, Calif., consulting firm. Some have built learning systems for SAAS from the ground up, and others have tailored on-premises software to fit SAAS. He says the shift is causing problems for vendors that had other delivery models, especially premises-based models.

Making Learning Affordable

The cost of SAAS-based learning systems are part of their appeal. Meridian Knowledge Solutions LLC in Chantilly, Va., offers learning systems on premises, hosted and on SAAS. Roy Haythorn, vice president, says Meridian has put a lot of work into its architecture to offer different versions. Many Meridian customers, especially some from the national defense and security establishment, still operate learning systems within their firewalls.

Haythorn says most new customers choose SAAS, and some existing ones are migrating to it. Financially, it makes sense. "Our lowest cost of entry for a perpetual license behind the firewall would cost at least $80,000," Haythorn says. "A small user can get in the game for $10,000 to $15,000 on the SAAS model."

For example, by moving from Meridian’s hosted model to its SAAS version, Engineers & Surveyors Institute in Chantilly, Va., saved 30 percent to 40 percent, according to Denis Gulakowski, director of education and programs. "When the economy slowed down, we could not justify continuing the cost of the fully licensed version."

The nonprofit public-private partnership has about 80 member companies, including some one- and two-person shops. It offers classroom education in land-development planning for engineers and surveyors. In a typical year, the institute has about 350 students, Gulakowski says. He uses the learning system for a catalog, online scheduling and record-keeping for certification in Maryland and Virginia. And, the institute has begun to deliver some online courses, with plans to expand its offerings.

The transition to SAAS was not entirely smooth. "We had done some customizing with the hosted software, and we didn’t carry those over to SAAS," Gulakowski says. "With SAAS, we couldn’t do things all the same way. There was a learning curve."

Wading in a Large Pool

Anyone shopping for a SAAS learning management system will have to consider a vast number of vendors. Don McIntosh, president of Trimeritus eLearning Solutions Inc., a Canadian consulting firm, keeps a running tally; the most recent count around 250. Many offer SAAS.

Experts are baffled that so many providers manage to stay in business. Talent management doesn’t have the hundreds of vendors that can be found in learning management systems, says David Mallon, principal analyst for enterprise learning at Bersin & Associates in Oakland, Calif. Large organizations still make up most of the customer base, he adds. "In the smaller end of the market, a much smaller percentage has these tools."

Mallon and others say the recession delayed many technology implementation plans, and the learning systems market has been slower to move to SAAS than other HR applications.

Other trends are likely to speed adoption. Automatic Data Processing Inc., known for outsourced payroll services, has built a broad suite of HR tools through acquisition and partnerships, including partnerships with two SAAS-based learning system companies: Inc. in Sunrise, Fla., and GeoLearning Inc. in Des Moines, Iowa.

"Both partnerships are a couple of years old, and have had moderate success," Mallon says.

On the flip side, some learning system vendors are offering other HR tools, particularly talent management tools, Walton says.

GECU’s provider is Cornerstone OnDemand Inc. in Santa Monica, Calif. It began as a learning system vendor a decade ago—one of the first in SAAS—and evolved its offerings into a full talent management suite for all functions except recruiting. Sixty percent of the customers also use at least one other module besides learning management, says Charles Coy, director of product marketing. Cornerstone offers its entire suite through a partnership with Automatic Data Processing Inc.

Taking Learning Curves

At GECU, a SAAS-based learning system allowed development of many new training and development programs, Gomez says. GECU had 220 employees at eight sites five years ago. Now it has more than 700 at 17 offices in two counties.

The system has improved the training staff’s ability to manage, deliver and evaluate learning. The learning experiences are about equally distributed between compliance and personal education, from desktop applications to supervisory learning to career and leadership development.

Compliance training used to be delivered in classrooms. Now, most is delivered from the learning system through self-paced content, but with some instructor-led online courses still in use. Previously, there was little professional development for rank-and-file staff. Now, there are offerings for career development for employees at every level.

"In an economy like this, training is usually cut," Gomez says. "We started thinking about how we could use training to improve customer value, reduce waste, etc. The employees love it."

In 2009, employees logged 10,000 hours of training through the system. In 2010, they had eclipsed that by mid-year, Gomez says. Because the system makes course creation easier, more learning is being moved away from instructor-led, in-classroom courses with the goal of reducing them by 20 percent.

In addition to six trainers, Gomez has three e-training analysts, who spend time seeking off-the-shelf content or creating learning programs from scratch for the credit union. The team has created 58 courses, compared to less than two dozen on the earlier application. About one-fourth of GECU’s 255 course offerings were created by the staff, Gomez says.

"We recently created our own safety training program," he says. You can buy safety programs from a third party, "but they are very generic." The team now develops its own training when financial regulations change.

Without the SAAS-based system, GECU would not have been able to roll out its certification program last year. Each new hire—tellers, managers, and others—has a year to complete 30 to 40 hours of self-paced instruction, 80 percent offered through the learning system, and the rest in instructor-led classroom courses, with the learning system used to schedule and record completion. Employees go to a portal and access self-paced learning modules from their computers.

Building Consistency

Chicago-based Vi, formerly Classic Residence by Hyatt, did not have consistent training until it adopted the SAAS-based learning system from and created E-Campus. Vi, pronounced "vee," which owns upscale retirement communities, has 4,100 employees at 22 locations, with staff sizes ranging from 75 to more than 500.

Until the company adopted the learning system two years ago, learning activities were the responsibility of managers in each location. "Training wasn’t consistent," with no needs assessment, no standardization and no calculation of return on investment, says Judy Whitcomb, SPHR, assistant vice president for learning and organizational development.

Whitcomb had worked for two companies where learning systems were hosted on the premises. She knew that would not fly. SAAS was her only option "that would allow us to focus on content, not on the mechanics of a system."

She hasn’t been disappointed. "We’ve leveraged our E-Campus as a strategic solution for planning, delivering, for employee communications and best practices. We established a sales learning center on it. Finance and accounting put tools there. We have nine learning centers by functional areas to target audiences."

Vi offers continuing education for nurses. The language program Rosetta Stone is available for employees whose second language is English, and for managers who want to learn a second language to communicate with their employees. And the information technology staff, sales teams and employees participating in Vi’s management and executive training programs use E-Campus.

Whitcomb has trained eight subject-area experts to use the authoring tools for developing courses. There is even a plan to use the platform to train customer-residents.

Higher engagement scores represent one payback. And, Vi has reduced the use of training consultants to almost nothing.

Still, Whitcomb advises HR practitioners to start small: "We’ve been doing these things gradually over time.

"When we launched, we had 800 active users and now we have more than 2,000," she reflects."We expect it to continue to grow."


The author is technology contributing editor for HR Magazine and based in Silicon Valley in California.

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