Training towards profit

Training towards profit

Bundling computer-based training as part of a solution can improve both the reseller's margin and customer satisfaction.

It had been the dream project. The tender was won against all odds and the rollout went as smooth as silk. Yet somehow the dream project turned out to be an unmitigated disaster. The help desk of the integrator, who was also providing support, was flooded with support calls from both the customer's IT team and its end users. Support staff needed to be deployed on the customer's premises to iron out what turned out to be inconsequential problems. What had been quite a healthy margin to begin with was quickly being eaten away by the mounting cost of supporting the project. What went wrong?

Neither the customer's IT team nor its end users had been properly trained in the new technology that had been deployed. As a result, the IT department inevitably made a blunder that brought the technology to its knees and end users blamed the deployment rather than their own lack of education for the problems they were having. The project turned out to be both a let-down for the customer and financially unrewarding for the integrator.

It's not just at the top end of town, however, that there is a desperate need for resellers to train up their customers. If you ask Perry Tait, the man behind the infamous Business Boost, a reseller of second-hand PCs that went down in a screaming heap earlier this year, the reason for the company's demise was that his customers were largely uneducated users who needed training and support to get them up and running.

Tait firmly believes it was the support costs that made his re-marketed computer business model unworkable.

With the increasing trend towards free or cheap PCs, subsidised by Internet contracts, it stands to reason that there will be an even greater penetration of PCs into new users with very little IT literacy.

"With the completely new consumer coming in, being seduced by the zero dollar PC, they have little or no knowledge of PCs and simply don't know how to drive it," said Noel Stubbs, managing director of CBTS, a distributor of computer-based training (CBT) software. "As a result, there are going to be a lot of frustrated first-time users."

In the past, a new user would have either bumbled their way through the initial learning process or turned to instructor-led training in order to get their head around the workings of a PC. The problem with instructor-led training is that it can be expensive and users have to commit to set times to attend training courses or workshops.

These days, however, Stubbs argues that CBT solutions can be bundled with a PC allowing a user to get to know their computer or a new application at their own pace and at an affordable price.

"A reseller can bundle a CBT training application like our DiscoverWare product and they have an online tutor right there at their fingertips," he said.

"They might work through a training course from start to finish but they can also have it loaded there all the time so that when they need help they get it and they can constantly refresh their training."

Stubbs believes that first-time users buying cheap PCs and multi-user sales into corporations are the two biggest markets for CBT.

"The biggest market opportunity is addressing the multi-unit sales into the corporate arena. We've found over the past six to 12 months there has been a movement to companies requiring CBT as their training strategy."

In this environment, a CBT course is typically deployed across a user's local area network or intranet, giving many people in the organisation access to the training material.

While Stubbs said that many users were now going out to tender to find a CBT training solution, there was also a great opportunity for enterprise resellers and integrators to bundle CBT as part of their solution.

"Help desk is a tremendously important component of the total cost of ownership of any IT project. It is a big advantage to the user if there is online help at the desktop because that is going to cut down a huge number of calls made to the help desk in repetitive and mundane questions," he said.

"IT managers really see the value you are providing them when you help them reduce their help desk calls and associated expenditure."

Similarly, if the reseller or integrator has a support contract, by implementing CBT as part of their solution, they are likely to cut down on the number of calls to their own help desk, thereby increasing their own profits.

"There is also an advantage in accelerating the rollout of software throughout an organisation," Stubbs said.

"If you use CBT as part of your desktop training strategy you get a uniform standard for technology-delivered instruction. You are guaranteeing that all the users are getting the same high-quality training."

In the past, many have dismissed CBT as not being a serious learning tool and it certainly has not been thought to be as effective as instructor-led training. However, in the past 12 months, a number of analyst reports have legitimised computer-based training.

As a result, CBT is catching on. IDC predicts technology-based training will experience a five year Compound Annual Growth Rate (CAGR) of 29.9 per cent compared to instructor-led training which will grow at 7.3 per cent.

According to the Masie Centre (, 92 per cent of large corporations will implement Web-based learning pilots this year. A survey conducted among directors of corporate training by Corporate University Xchange ( found up to 96 per cent of corporate training will be online by 2003, with 41 per cent of training delivered via company extranets.

Sharon Smith, marketing manager of vendor CBT Systems' said there were a number of advantages associated with CBT training over instructor-led training, not the least of which is cost.

"CBT affords economies of scale," she said. "Corporations can provide employees access to far more training for less expense."

CBT involves no travel costs for either the trainer or trainee and no additional facilities are required, she said. However, one of the biggest advantages to CBT is it saves time. "CBT can be undertaken any time, 24 hours a day, anywhere. For example, learning may make productive use of the train ride to work," Smith said.

Smith added that CBT can save time by 25 to 50 per cent over instructor-led training and cites a report by Online Inc called ROI on CBT which found a 35 to 45 per cent decrease in the time taken.

"What's more, learners need not wait until the next class is scheduled because learning may take place immediately when a need is recognised to meet mission-critical deadlines," Smith said. "Learners also take courses at their own pace. That's important because different people pick up different concepts at different paces."

CBT training has also advanced somewhat in recent years as technology has enabled a greater use of multimedia, according to CBTS' Stubbs.

"DiscoverWare is a truly interactive multimedia package incorporating video and audio as well as text and exercises," he said.

It is also immediate. Stubbs said an icon can be added to the application toolbar, enabling a user to simply click on the icon when they need help to immediately launch the CD.

"They can then find the problem they're having, practice that skill in CBT and simply ALT-TAB back into what they were doing," he said.

This is important because it enables students to constantly refresh their skills, according to Smith.

"The chances are that new skills that aren't used within three months of learning will be forgotten. CBT may be reviewed as many times as necessary, at any time, whenever a particular area of expertise is required," she said.

And of course, for the reseller there is the additional margin of selling CBT as part of the solution.

"We believe that resellers, whether they are large or small, can protect their margins and expand their business opportunities by providing 'value-added' products and services to their customers," Stubbs said.

"There's certainly a lot better margin on CBT software than the hardware they are reselling.

"CBTS would be very interested in forming relationships with resellers to value-add DiscoverWare CBT training to not only their home market clients, but particularly so for multi-user licences to their SOHO and larger corporate clients."

Smith said that CBT Systems typically worked on a co-marketing basis, where the reseller or integrator would refer a user to CBT Systems who would then make the sales and pass on a "healthy commission" to the reseller.

Web-based training

The effectiveness of computer-based training is being enhanced with the additional interactiveness that can be providing utilising the Internet.

For example, CBT Systems subsidiary provides Internet-based mentoring. According to Smith, this brings the advantages of the classroom environment to CBT, through providing interaction with peers, moderated discussion groups, daily personalised e-mail and additional practical exercises.

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