Wake-up call the real decision makers: e-learning suppliers are bypassing corporate training functions and selling directly to business units

When the administration solutions division of management consulting firm Towers Perrin decided to improve its training efficiency, the business unit researched the field and then purchased a new learning management system to suit its needs. It did so without consulting anyone at the corporate level, including the training department. In fact, it was the first purchase of a learning management system within the company, says Cher Zoltak, the units's chief learning officer who made the deal.

It often works that way now. Hungry e-learning vendors frequently call directly on business units or the executive suite, bypassing the corporate training department. And like Towers Perrin, those offices often initiate the purchase of e-learning platforms, content, and services without informing training or HR. Neither is a happy occurrence for the director of training, who typically reacts with a mixture of frustration and alarm. That executive's lack of empowerment is driven home with every outside purchase, while the opportunity to offer expertise and leverage buying is lost.

Depending on who you consult, the sale of learning software and services directly through business units and other offices amounts to a growing trend, business as usual, or simply no trend at all.

"It still looks to me like training and development are smack in the middle of the action," says Allison Rossett, professor of educational technology at San Diego State University and a veteran training consultant. For the function to be elsewhere is an illogical way for an enterprise to fly, she suggests.

But others beg to differ. "Within the last six months, we've dealt infrequently with training managers and departments," reports Dave Egan, vice president of business development and partner strategies with THINQ Learning Solutions. Sales of the THINQ LMS platform are typically made directly to company management--sales VPs in some organizations, CIOs in others. While training directors are sometimes at the table, Egan says, "I cant point to a recent example in which they were driving the decision-making process.

That point is echoed by Lee Maxey, chief learning officer of Click2learn, where sales reps typically deal directly with business units. But he says the suggestion that vendors are actually "bypassing" training departments in targeting lines of business is misleading. He refers to it as "penetrating an account. Others prefer to use the term alternative channels.

Corporate training managers use yet another term--initiative-based learning--and it's not a popular expression. It means that someone has undermined their authority, and it suggests that their departments are considered irrelevant by fleet-footed sales and customer service units that have independently incorporated a training focus into their organizations.

Is that a hard image to shake? Perhaps. After all, the training department provides a service to an organization. By definition, it's a layer removed from the business productivity requirement. In an era in which people are asked to do more with less, and to demonstrate a return on the decisions they make, the people often in the best position are directly on the line within a business unit. But that often means that large companies end up with numerous LMSs and other platforms, incurring predictable incompatibility problems when employees transfer internally and management consolidates.

Business units move ahead

"There is no question that business units are looking closely at training and performance and asserting control over both," says Marc Rosenberg, a principal with Chicago-based DiamondCluster International, a global management consulting firm, and author of E-Learning Strategies for Delivering Knowledge in the Digital Age. "In difficult times, centralized training departments frequently are cut back. But business units still have training and performance improvement needs, and they often go directly to vendors, especially for courseware. It's more efficient and productive."

Rosenberg says that sales, manufacturing, and IT are among the lines of business that often reach directly to suppliers of training--classroom and e-learning. As a result, "training departments in some cases run the risk of being disintermediated," believes Rosenberg.

In some cases, the training department is viewed by vendors as little more than a middleman, suggests Rosenberg. "If you're a seller, you want to call on the decision maker. That's a seller's strategy."

Along with business units, e-learning suppliers are finding gold at corporate C suites (CEOs, CIOs, CTOs). That's understandable considering the importance of e-learning to an organization, vendors contend. "Learning, broadly defined, is becoming more widely recognized as a strategic investment buy instead of a necessary evil," says Egan. "That's prompting the escalation, although not to the absolute exclusion of the traditional training people."

"What businesspeople demand from us is the solution to an identified business problem," adds Egan. "We help them realize that the management of learning is part of the solution to that problem." He says business issues include unacceptable employee turnover rates, quality control, and customer satisfaction statistics from call support centers. We don't begin a conversation about a training problem. It's about a profitability problem."

From THINQ's perspective, the typical customer sees the learning agenda as something larger than the way companies have traditionally regarded the training function. "Someone once said that training tends to be seen as remedial while learning is viewed as forward thinking. That philosophy is pervading the decision-making process," says Egan.

He says the philosophy is tied to the level of investment--not only to writing a check for THINQ software, but also all of the other necessary investments. For example, the LMS is a relatively minor piece of large e-learning contracts, such as THINQ's contract with the U.S. Navy, he says. The navy's e-learning budget is over nine figures.

Certainly, many dynamics are going on within major corporations that influence the purchase of training materials. Many business units-especially sales, customer service, and IT--have large budgets and an urgent need to train people. They're focused on short-term results from business support training, and training departments don't always meet their needs. The business units often don't care whether an e-learning platform is redundant, incompatible, unscalable, or costly.

Two-track adoption curve

Training concerns from the corporate level often are perceived as being about scale and infrastructure, and about "sabbatical learning" that takes employees off the job. The training department is seen as most constructive when it addresses those shortterm problems with performance support.

MaryAlice Colen, chief e-learning evangelist at the collaboration firm Interwise, says we're witnessing a traditional adoption curve of e-learning-one that poses no threat to training departments. She says that it's following two simultaneous tracks: the corporate infrastructure purchases of various platforms, including LMS and Web-conferencing, and business point solutions from units that can't wait for corporate infrastructure.

Interwise and its competitors have a clear perspective of this scenario because Web-conferencing serves both e-learning and general business needs. "Today, people in business units are responsible for their own training and rolling it up later to become centralized, and centralized management is a service organization out to those lines of business. I see those trends combining," says Colen.

Centralized learning departments are splitting their duties to assist management's infrastructure initiatives and to consult with the lines of business in their efforts to develop training programs. "We're at the front end of a trend of these people moving into IT. This is the year of consolidation and integration to leverage what we have. It's a great year to be a systems integrator," she says.

In both scenarios, says Colen, the situation is the same. "Everybody is making the best decisions they can based on the information they have. We've been in so many demonstrations in huge companies where people can't possibly know what others are doing." As a result, numerous LMSs and collaboration platforms are used within a company. "Nobody is making a bad decision; they're just going forward." The pain will come when people have to give up their choices during the consolidation phase, she predicts.

The situation isn't unique to the corporate world. It's also happening within the federal government, claims George Koch, team leader for the U.S. Department of Labor's e-learning activities.