Costs Savings to Enterprise

Undisputed are the dramatic cost savings to both industrial and governmental enterprises from adopting e-learning. Some examples:

• Training Magazine: Study across industries found that corporations saved 50% to 70% of their overall training cost by replacing traditional training with on-line delivery.²² W.R. Hambrecht & Company reported similar savings.²⁴
  
  
• Advanced Distributed Learning Initiative: Enterprises' deployment of LMSs, and worldwide adoption of standards like SCORM, that promote the use of sharable content objects, will compound savings already realized from e-learning efficiencies. Content object sharing is expected to reduce training development costs by 50% to 80%.²⁴
  
  
• Brandon-Hall: A study of a large company over a three-year period determined that the cost to develop and deliver a course in "technology" mode was about half that of the "lecture/lab" mode.²⁵
  
  
• IBM: One year after launching comprehensive, on-line management training in 1999, IBM reported that it was able to deliver five times the training at one-third the cost. Estimated cost savings was $200 million.²⁶
  
  
• Oracle: The rapid adoption of e-learning strategies enabled Oracle to cut internal learning costs by 40%, while increasing net student enrollments by 36%; and to "compress the knowledge supply chain", building and deploying new courses in weeks instead of months.²⁷
  
  
• Cisco: To keep its business "running fast", the company is moving 100% of its courses on line. On-line training is considered essential to its acquisition strategy, which resulted in the purchase and integration of 50 new companies in two years.²⁸

Although a higher initial investment is usually required to implement e-learning across the enterprise, this investment is quickly offset by tremendous savings in the delivery of the material developed. While traditional classroom training is associated with 20-to-1 student-teacher ratios, only one e-learning course can be used to train thousands of students. The decreasing cost of network bandwidth and computers, as well as the growing libraries of high-quality, off-the-shelf content, add to this savings.

Besides more efficient delivery, the ASTD attributes cost savings largely to employee time saved.²⁹ Another key source of savings is travel, since training is no longer offsite. In 2000, two-thirds of the $66 billion total corporate training budgets were devoted to employee travel.³⁰