Economy Won't Slow Government's Need for Training

When KPMG Consulting Inc. began training its consultants in the principles and practices of e-business in 1999, the firm's leaders decided the best way to do that was to "walk the walk" by providing the training electronically, said Jim Eldracher, a senior manager with the firm's Learning Solutions practice.They quickly put together a new program: a combination of Web-based and CD-ROM exercises and reading material. Within three months, nearly all of the firm's consultants had passed the 40- to 50-hour multimedia training course. Soon after, clients who had heard about the training initiative began bombarding the firm with requests for similar online training, Eldracher said. The McLean, Va., company responded by creating an e-business training program for its clients. The program marked the start of the firm's Learning Solutions group, whose staff has grown from three to 23 in its first two years.Like KPMG Consulting, in recent years many large firms offering IT services and products have built or acquired business units dedicated to client training. The firms had always provided training in connection with new system implementations, but creating specific training units has allowed them to capitalize on their broad experience with information technology systems and training programs across multiple business units and around the world, company executives said.Often, personnel within the firms' industry practices work closely with training unit staff to implement client training. The bulk of their offerings are IT-related, although some also offer so-called soft-skills training in subjects such as project management and customer service.The booming technology market has fueled a robust training market, as evidenced by the rapid growth in training staffs at KPMG Consulting and other IT companies. User demand for training services within the federal government grew from implementation of new software, tools and sophisticated hardware, according to Input Inc. of Chantilly, Va., an IT market research firm. The Information Technology Reform Act also mandates the development of training programs to teach new IT skills.The federal government training market is expected to grow from $813 million in fiscal 2000 to $1.2 billion in fiscal 2005, an annual growth rate of 8 percent, according to Input.While the slowing economy could dampen the demand for training, many executives said the downturn has actually heightened awareness about training's value among government agencies. "The Bush administration is committed to efficiencies in the public sector. There's a lot of emphasis on training. A lot of clients are focusing on ways to do it more efficiently and perhaps more effectively," said Hemant Minocha, a partner with PricewaterhouseCoopers of New York. Minocha said PricewaterhouseCoopers' sales to the government might increase faster than its private-sector sales over the next 12 months.Bill Hitchcock of Electronic Data Systems Corp. also is optimistic about the government market. "It's fun to work with [government agencies], because they know [training] is important and set aside the funding," said Hitchcock, global director for digital learning.At American Management Systems Inc. in Fairfax, Va., 95 percent of the training provided to clients is technology related, said Mark Gregoire, vice president of Integrated Learning Solutions, AMS' training group. The firm's clients include the departments of Agriculture, Defense and State, and the Internal Revenue Service. The firms' efforts to redefine their training services have paid off, executives said. The training divisions are growing steadily, and their customers are happier and more likely to bring repeat business, they said."We can help ensure [clients'] success. If they get more value from the product, it makes it easier for us to sell to them in the future," said Larry Whatley, manager of the Education Services group of BMC Software Inc., which the Houston company formed about three years ago with five staff members. Today the group employs about 30 people, and the number of students it serves yearly has increased from 1,500 to 5,600. Its government clients include the IRS, the Justice Department and the Defense Information Systems Agency. "We thought there was a good business opportunity. And we felt like it was something our customers really needed," Whatley said. "We started off as a mainframe utility company. Our products were installed and ran. There were no user interfaces, so our training requirements were limited. As we began to expand into Unix and Windows products, it became obvious our customers would need more training to tailor the product to get the greatest benefit from the capabilities it provided." Minocha said PricewaterhouseCoopers' 1996 decision to create a Learning Solutions practice has paid off for the firm. The Arlington, Va., practice has grown steadily, from about 10 people in 1996 to about 600 around the world today, he said.Previously, training "was in little bits and pieces all over the firm," Minocha said. "We realized we were not perhaps optimizing our resources and gaining in the marketplace." Systems integrator Anteon Corp. of Fairfax, Va., acquired a unit dedicated to training with the 1999 purchase of Analysis & Technology Inc. of North Stonington, Conn. In July, Anteon sold the commercial training division of Interactive Media Corp., which it had acquired with Analysis & Technology, but kept Interactive Media's government unit. Anteon's acquisition of Interactive Media brought access to new clients and business opportunities, said Kent Jones, vice president of training operations and distance learning. Jones has seen 25 percent growth in his staff over the last several years, to about 100 people today, and he said he expects that trend to continue. Joseph Kampf, president and chief executive officer of Anteon, projected in July that the Interactive Media Corp. government unit, now operating as the company's Interactive Media Division, would have revenue of $15 million this year. A changing government work force is fueling the demand for training, Jones said."There are more demands on individual government employees to be more flexible in the tasks they perform, to know more ? to bring about a better government work force," he said. "Efforts to improve the government work force have meant a steady requirement to train people."Like Jones, Minocha has seen clients' interest in worker training surge in recent years. "The focus on people development has become a much more significant issue in the last three to four years," as clients compete for talented workers, battle to retain staff and push to increase productivity, Minocha said. "That, in turn, has fueled some of the growth in services we offer."The PwC Learning Solutions Group develops training plans, creates educational materials in a variety of formats, designs online learning portals and integrates those pieces into a comprehensive training offering. One-third of its business is with the public sector; two-thirds is with the private sector, Minocha said. The firm's government clients include the Federal Aviation dministration, Department of Housing and Urban Development, and the Army, for which PricewaterhouseCoopers built Army University Access Online, perhaps the most extensive online learning portal ever constructed.While Gregoire has seen the demand for training increase significantly in the last five years, he sees signs that the trend is leveling off. "I think a lot has changed in the last eight months," said Gregoire, who works out of Manchester, Conn. "As the economy has gotten soft, organizations have cut back on their training to save money. The vast majority of our work is done in concert with a systems integration work or an IT project that AMS is doing. When [IT systems] projects don't go forward, we don't have projects."EDS' Hitchcock, however, remains optimistic. Customer interest in the Digital Learning practice of the Plano, Texas, company has skyrocketed, although clients are weighing their training decisions carefully, he said. EDS' offerings include hundreds of online courses, which are available to the public as well as EDS clients."The marketplace is growing in the mid-double digits, and I expect we have every chance to keep up or lead the market," said Hitchcock, who works out of Troy, Mich. "A lot of companies are facing tough times but they are going to get through this with really skilled people. We are able to provide a solution," he said. The staff of EDS' training practice has grown from five to 700 over the last 13 years, he said. Its public-sector clients include several state and local governments, the Education Department and the Federal Aviation Administration.Despite the economic downturn, Gregoire sees an emerging market in the training of clients' customers."I think we're going to see more focus on training staff and customers how to understand [the clients'] products better, and training suppliers to integrate with their systems," Gregoire said. "If a new wireless technology comes out, for example, it takes a while for people to learn how to use it and leverage it. The more you can shorten that time, the better it's going to get used and that will speed its acceptance.""I don't think it's Earth-shatteringly new," he said, "I just think there is going to be more interest in it because in this marketplace, efficiency, time to market and marketshare all have to do with people using and understanding the technology."