Build vs. Buy: Why Corporates are investing in e-learning

Build vs. Buy: Why corporates are investing in e-learning
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BinduSwetha

Published on May 7, 2015


  • 2958 Views

Countless reports and studies show that the e-learning industry is showing no signs of slowing down -at least not for a decade or two! The global e-learning industry is expected to reach $107 billion by 2015 with a five-year annual compound growth rate of 9.2%. Although these numbers show rising trends for the industry, most companies are still in a dilemma as to whether they invest in an e-learning project or build and set one up in-house.

Current Scenario

Though e-learning is nothing new in itself, the industry has grown globally in terms of revenue and academics. With this growth in mind, companies not only in the United States but across the globe are now increasing their e-learning usage. About 41.7% of global Fortune 500 companies used technology during their formal learning hours in 2014. Study proves that businesses save 50% of their expenses when replacing the traditional instructor-based training with e-learning. The instruction time is also cut down by 60% due to e-learning.

E-learning has changed the face of training. According to the Journal of Applied Psychology, learning in smaller chunks can improve knowledge transfer by 17%. Also, a 2002 BBC report compared byte-sized learning (e-learning) with longer training sessions (classroom). This study proved that learning in smaller chunks was more effective and learners were able to grasp and absorb knowledge better than during the longer sessions.

The certification domain also has benefitted in a big way due to the emergence of e-learning. The longer classroom sessions are replaced by smaller e-learning modules with each module not exceeding 30 minutes. These byte-sized courses have given users the freedom to access courses during dead time- i.e., time which is not suitable for learning- thus increasing the number of participants taking the certification.

The ‘Build’ Strategy

In today’s evolving markets, it is always tempting to get off-the-shelf training from reputed organizations rather than investing time, effort, and money in building one for your organization. However, the ‘Build’ strategy can play an instrumental role in revenue generation, if implemented properly.

The biggest advantage of building your own e-learning model is to gain a competitive advantage. If you are into a domain that already has a lot of competition in the market, there are minimal chances of your business being different from the others! If you are purchasing the same training as your competitors, you will be losing the edge. That’s why building your own e-learning training is better!

Brand-conscious organizations are successful because they have their own methods of doing things. Be it selling products to customers or answering the phone call, their style is unique, and this is what differentiates them from the others. So building your own process will train the employees in a manner that reflects the firm’s brand image.

Citing examples, case studies, and success stories that are appropriate to the industry you are into will help the training cause big time. However, in the case of e-learning material procured from third party vendors, this customization needs to be done by your internal team. In the case of e-learning material built in-house, such relevant examples can be easily incorporated. This is a big plus point of building e-learning material in-house.

Believe it or not, most managers don’t recommend training to their team members for the simple fact that they feel undermined by training. There is a general belief that training contradicts the way managers do things. When the training material is built in-house, managers can also get involved in the building process and share their inputs. This will create a sense of ownership and managers will be committed to reinforcing the training.

The ‘Buy’ Strategy

Though the e-learning industry is booming, most companies are still hesitant to invest in it due to the initial investment that they need to make. The aforementioned research findings prove that businesses save about 50% of their revenue when e-learning is implemented.

The training costs are significantly reduced because on-site facilitators and printed training material costs are automatically cut down. In the e-learning model, though there is a high initial investment cost, the upkeep costs are reduced. The corporate e-learning training model ensures that the learning material is available via the online platform, benefiting both the employees-training sphere and the organization.

Time to market is the biggest bottleneck that most companies face. However, with the e-learning model, this scenario changes completely. The online training material which is readily available is delivered quickly and conveniently. There’s no need to wait for the in-house material to be reviewed for market competency, and then getting it delivered to the employees.

Reinventing the wheel will take your business training material nowhere! There are a lot of training models that are similar across industries and building your own content around it is a waste of time. Instead, purchasing the material developed by experts in the field will be a source of learning for employees and will ease the training process.

Getting subject matter experts on-board for all the topics related to the company’s operations is not possible. Without expert guidance, a lot of the training material that is developed will not possess the much-needed authenticity. Similarly, for companies where the in-house capacity isn’t able to dedicate the time and efforts to build the e-learning content, opting for the buy option will help the cause.

In a Nutshell

Though the build-or-buy decision on e-learning material depends completely on the organization’s needs, the few factors mentioned below can assist in decision making.

Build If:

  • Content is highly organization-specific such as inductions and it is hard to off-the-shelf material to this specific requirement
  • High risk content like security awareness or company policies are to be developed
  • High completions content like business ethics, code of conduct
  • Highly specific requirements like an online version of a training provided which is not available elsewhere
  • Better In-house development quality

Buy If

  • Generic content such as software package training content that already exists
  • Regularly changing content needs like legal compliance, industry policies are to be fulfilled
  • Urgent content need
  • Non-business content like corporate culture, discrimination training is to be developed
  • Vendor demonstrates quality and expertise in your business domain
  • Customization of the material is easy and can be implemented faster
Though there is no wrong or right answer to this debate, figuring out what works best for your business model will help you evaluate the best possible solution.

About the Author

Swetha has a master's degree in marketing and splits her current time as a writer, author, and editor. With an engineering background, Swetha writes on the latest topics that are trending in the world of digital and offline marketing, as well as on Big Data, the Internet of Things, Finance, and Project Management.


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