Technology Leadership Void - Drives Training Dollars Upward
Scan the advertising copy of today's information technology training products and services, and you'll reel from the escalating exaggerations and hypnotizing hyperbole.
In new volumes that challenge your credibility, if not your stamina, one publisher offers texts that claim to teach you Java 1.2 or object-oriented programming with Visual Basic in just 21 days. The same company pushes the edge of the ledge with "Teach Yourself Visual Basic 6 in 24 hours."
No question that training is now big time. Whether it is ZD University (www.zdu.com) charging $7.95 per month for unlimited courses or freebie vendor-ware courses for developers from Microsoft (www.microsoft.com/education/hed/online/), IT education is on a roll.
The reasons why are evident. Add the growing demand for IT professionals and the dwindling supply of qualified candidates to the dollars spent on training, and the picture is as clear as the type in an electronic whiteboard.
According to estimates from the American Society for Training & Development in Alexandria, Va., based on the Bureau of Labor Statistics survey, U.S. organizations spent $55.3 billion on training in 1995. And data from ASTD's own Human Performance Practices Survey suggests the figure was about the same in 1996.
Reviewing the figures, the training organization observes that "the typical U.S. private-sector organization with 50 or more employees spends about $504 per employee on training."
Where does the money go? Nearly 40 percent finds its way to the wages and salaries of trainers. A little more than 27 percent goes to outside training companies and trainers. The smallest share, about 14 percent, is for tuition reimbursement. The remainder, more than 21 percent, is classified as other.
With a robust American economy and continuing profitability of U.S. companies, not to mention the continuing need for professionals with IT skill sets, those figures are likely to rise.
One indication is price increases such as the one announced by ZD University in August. Launched two years ago with a price point of $4.95 per month, the Web-based company announced a 61 percent increase to $7.95 for the 46 IT courses it will offer beginning this month.
Along with that announcement came the head-shaking hyperbole typical of the industry from Ed Passarella, vice president and general manager of ZD University: "Since [the launch two years ago], we've offered more than 300 classes that have helped over 100,000 people enhance their technical skills, increase their computing IQ[s], and compete more effectively in today's digitized world."
Not to be outdone, Microsoft Corp. weighs in with its candidate for the most elliptical training statement found on a Web site: "The single most important use of information technology is to improve education." Try to use that tagline to sell training to a business person.
Changing Times Whatever the pitch, clearly times have changed from the days of the bespectacled trainer standing before a class of system or network administrators intoning Unix commands in a monotone.
In presentation methods, you now find alongside the traditional audio, video and multimedia such items as computer-based training (CBT), electronic text, groupware, interactive TV, teleconferencing, online help and 3D modeling/virtual reality.
The distribution methods are even richer, with LAN/WAN, tactile gear/simulator, intranet, digital video disk (DVD), extranet and, of course, the World Wide Web.
The point is not lost on the ilk of Harcourt General, Boston, parent of Harcourt Brace. Tim King, director of corporate relations, says that for years the company has ranked among the preeminent producers of educational services and materials. With the spate of recent acquisitions in the training industry, Harcourt General is now repositioning to become "the global leader of a diverse spectrum of educational products and services." He estimates growth in the IT training arena at 30 percent annually.
As noted on the Harcourt General Web site, "The Company's Harcourt Brace education businesses span a broad spectrum of educational publishing, products and services ? including classroom-based instructional materials and assessment, self-paced learning and testing/credentialing/certification ? markets that today account for more than $600 billion in domestic spending alone."
Among its stable of companies in an education group that generated $617 million in fiscal 1997 are industry leaders, such as Harcourt Brace School, Harcourt Brace College, Holt, Rinehart and Winston and Steck-Vaughn. There is also the Lifelong Learning and Assessment Group, which accounted for $401 million in 1997.
Companies in the group include Assessment Systems (computerized tests for credentialing and licensing markets), Drake Beam Morin (professional outplacement services and career consulting firm), ICS Learning Systems (a top distance-learning company that serves more than 400,000 adult students each year), and the Psychological Corporation (a for-profit publisher of tests and services for educational psychological, clinical and professional assessment).
Among the key training acquisitions are NETg, Naperville, Ill., which provides multimedia training courseware for IT professionals, and GartnerLearning, Stamford, Conn., which also targets the IT market. The GartnerLearning purchase was announced in late July; it is planned to become part of NETg.
"Our new IT training company will have revenues in fiscal 1999 of more than $100 million," says Brian Knez, president and CEO of Harcourt Brace. Through a sales distribution agreement, "we will have the benefit of GartnerGroup's well-respected global sales force generating sales leads for the newly combined company."
Pilot Program The goal of transforming NETg, the No. 2 player in the IT training business behind CBT Systems, into a one-stop resource for IT training managers apparently is already beginning to bear fruit.
The company says it hopes to convert a five-month pilot program with the Navy into a million seat enterprise agreement. Currently, NETg licenses access to more than 400 courses for technical and end users, primarily to Fortune 2000 companies.
Built on the SkillBuilder platform, its courses let companies customize content to individual needs. For example, its Precision Learning package uses the results of a pretest to create a customized instruction path that lets users bypass course content they already have mastered. Like many other companies, it offers its line of InterNETg training titles for course content to be downloaded directly from the Web.
The Navy pilot program, orchestrated by NETg's government system group manager David Joseph, could yield a million seats for the military branch and generate a multimillion dollar award. While Joseph would not reveal specifics about the potential size of the award, he did say that a commercial customer would pay upward of $2.36 million annually for a three-year license covering 75,000 seats for a complete suite of courses.
"The Navy has a need to train its entire population on IT, from Microsoft Office to BackOffice, Oracle and Unix. Currently, we offer more than 80 Microsoft courses, including certified engineer training as well as MS Office 97 for end users. We also offer the complete range of Oracle products," Joseph says.
The five-month pilot ends Dec. 11 and is deployed over two intranets. Consideration is being given to housing training on a satellite for delivery to ships at sea and overseas installations.
"Our offerings are all CBT, which is the fastest growing training segment. By simulating the network environment and letting users proceed at their own pace, our products offer an answer to downsizing, reorganizations and the need to keep up to the technology level at a time of rapid change and sensitivity to cost," says Joseph.
The downsizing, reorganization and demand to keep up to speed is causing reverberations in other parts of the IT training world.
According to the director of the University of Virginia's Northern Virginia Center, a technology leadership gap is starting to open, as many IT managers are programmers one day and division leaders the next ? without adequate leadership training.
The result is that the organization suffers, whether it be in government or private industry.
Steve Gladis, director of the center, which is comprised of seven regional sites, says that training is a job the university has been doing for 50 years.
"Our mission is to educate and reach out to corporations with training, acting as the university's link to business. We ask, 'What is it that the companies need?' and then try to provide a link. For example, it might be interns or on-site training programs," says Gladis.
Hot Market The hot area now is the need for IT leadership training. He says the problem behind the problem is that once a company grows from 20 or 30 people to 100, you find programmers working for other programmers.
"There is very little development of leadership in emerging companies. Basically, it becomes leadership by emergency," says Gladis. "A lot of young folks were bright but had very little experience in managing. Thus, one of the emerging issues was the lack of experience of managers, and this was occurring in companies like SAIC, Lockheed, NASA and the U.S. Treasury."
Laying out the specifics, he says if you want to take a programmer and make a manager, among the core courses needed would be leadership training, communications and teamwork, financial management, project management, HR management and operations management.
"We launched a program for a technology leadership certificate tailored to doing contract, on-site work for corporations. Students can get a certificate in a year. We feel this is just what people need. Technology companies don't really care about credit. The model is Microsoft and engineer certification," says Gladis.
Take the certification a few levels deeper, and you uncover one of the better-kept secrets in the federal government, the development by the Malcolm Baldrige National Quality Award staff of criteria for performance excellence in education.
For Harry Hertz, director of the Baldrige Award, part of the Department of Commerce, training must be viewed in context. He says training used to focus on preparing workers to do the jobs they have today. That has shifted over time to training for what is expected of them in the future.
"That shift is reflected as well in the companies, whose focus is now a commitment to lifelong employability, preparing their work force for jobs of the future to work in the marketplace in the future," says Hertz.
Among the significant changes is the level of commitment to training, signaled in the number of hours firms invest in teaching all employees.
According to figures from Hertz, that amounts to 120 hours per year per employee. Also changing in companies at the forefront of innovation and quality practices is the willingness to look at all ways to deliver training, whether it be through the Internet or self-paced training models through CBT.
"Organizations today have two distinct training challenges that are sometimes in conflict. First is getting the knowledge base accessible in a format that is usable for all employees that have the need and potential to use it. It amounts to sharing new knowledge. The second challenge is protecting proprietary information," says Hertz.
Another Perspective One who see those challenges from a different point of view is John Reinert, 1998 president of the Institute of Electrical and Electronics Engineers Inc.
He observes critically that AT&T over the past six to nine months reduced its work force by 12,000 to 15,000, primarily in middle management people.
"Some of those people would have the skills to do much needed IT. In other cases, where people in manufacturing are let go, they may have the aptitude and desire to support IT," says Reinert.
"In a way, many firms are looking at their problems from a purely temporal view, not looking forward to the future needs of the company. In today's market, you can't just focus on what you need now," says Reinert. "You need to put a supply line in place. It's shortsighted to not keep a good long-term view of the needs of the work force."
He suggests that smaller companies with high technology recruiting needs should be able to work together with chambers of commerce and economic development committees for both the short term and to stock the pipeline.
"Companies need to look for activities where they can get involved with the community, for example, getting together with the community college to define what skills are needed to work in semiconductor clean rooms," says Reinert.
On the other side, he feels people need to keep from getting into a position where they are not employable, to recognize an obligation to maintain their skills.
"They need to change their oil, so to speak, so they stay well-lubricated to compete in the marketplace. Big companies need to do this as well. In this technology climate, staying in one area too long could affect your market value where you become a lost asset for the technical community," says Reinert.
James Martin & Company and the Software Factory are two companies that took a unique approach to the market in trying to find and train Cobol programmers to work on the year 2000 software problem. The firms teamed to help the citizens of South Boston, Va., turn their small industry town into a hub of technology.
James Martin, an IT enterprise company, is working with Software Factory to retrain unemployed, underemployed and misemployed workers to do Y2K programming. With labor rates in areas such as South Boston below those in urban centers, the solution is cost-effective for the companies and a source of jobs for the residents.
Part of the appeal for James Martin is the stability of the labor pool compared to the instability in more urban areas and IT centers such as Silicon Valley.
Already, two classes have graduated from the Software Company's "technology boot camp," an intense, unpaid, four-week course in programming. The graduates go to work for the Software Factory as Y2K programmers.
Extending their work, the Software Factory recently announced James Martin selected them as a subcontractor for Y2K programming for Connecticut's Department of Revenue. The contract is worth $700,000 to the Software Factory, which will provide Y2K programming.