Training Analytics: The Next Big Wave in Learning Management Technology

Josh Bersin - 12/1/03

Learning management systems have become the mainstream technology underlying corporate training and the migration to e-learning. Today with PeopleSoft, Oracle, Siebel and IBM, as well as Saba, Docent and dozens of others in the market, companies have many

But just as companies are getting their arms around learning management systems and implementations, another even more exciting application is just around the corner: training analytics. Just like sales and marketing analytics systems were developed as an outgrowth of customer relationship management (CRM) systems, training analytics systems are becoming a new category to complement the LMS.

Measurement has always been a challenge in the training industry—according to ASTD’s 2002 industry survey, companies spend between 1 percent and 4 percent of total payroll on training. This translates to between $300 and more than $1,500 per employee per year. Imagine how a training analytics system could show you the specific programs, initiatives and content that drive ROI from this investment.

The solution is here. Training analytics is a new breed of application that gives companies a systematic, reputable way to measure the activity, efficiency, compliance and effectiveness of training. We see a trend toward an exciting new solution that will give you the ability to really measure training ROI and correlate training back to business metrics in your corporation.

The Challenge: What to Measure?
The first challenge companies face when asked to measure training is determining what to measure. The Kirkpatrick model gives you a framework, but not really any techniques or solutions. In consulting with many companies, we find three critical categories in training measurement: efficiency, effectiveness and compliance.

Efficiency: How efficiently are we utilizing our training investment? What is our real cost per student per hour? Who is consuming our training programs, and how efficiently are we delivering to them? Is our migration to e-learning and other Web technologies saving us money? If so, how much? Across our e-learning programs, are we driving down costs? How can we get more output for our existing investment? And if we do need to cut, where should we cut?

“We are a metrics-driven company,” said Mark Sullivan, director of training technologies for Honeywell. “In order to manage the training process, we have to set benchmarks and strive to exceed them year over year. Cost-effectiveness is perhaps the first and most important because we know we are essentially an overhead function.”