Training Employees of IBM Through e-Learning

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Case Details:

Case Code : HROB030
Case Length : 14 Pages
Period : 1990 - 2002
Pub Date : 2003
Teaching Note :Not Available
Organization : IBM
Industry : Information Technology
Countries : USA

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"E-learning is a technology area that often has both first-tier benefits, such as reduced travel costs, and second-tier benefits, such as increased employee performance that directly impacts profitability."

- Rebecca Wettemann, research director for Nucleus Research.1


In 2002, the International Business Machines Corporation (IBM)2 was ranked fourth by the Training3 magazine on its 'The 2002 Training Top 100' list (Refer Exhibit I). The magazine ranked companies based on their commitment4 towards workforce development and training imparted to employees even during periods of financial uncertainty.

Since its inception, IBM had been focusing on human resources development. The company concentrated on the education and training of its employees as an integral part of their development. During the mid 1990s, IBM reportedly spent about $1 billion for training its employees.

However, in the late 1990s, IBM undertook a cost cutting drive, and started looking for ways to train its employees effectively at lower costs.

After considerable research, in 1999, IBM decided to use e-learning (Refer Exhibit II) to train its employees. Initially, e-learning was used to train IBM's newly recruited managers.

IBM saved millions of dollars by training employees through e-learning. E-learning also created a better learning environment for the company's employees, compared to the traditional training methods. The company reportedly saved about $166 million within one year of implementing the e-learning program for training its employees all over the world. The figure rose to $350 million in 2001.

Training Employees of IBM Through e-Learning - Next Page>>

1] As quoted in 'E-Learning delivers a 2284% ROI for IBM,', October 2001. Headquartered in Wellesley, Massachusetts, Nucleus Research is a company involved in ROI research. It also offers expert advice, analyses, and financial modeling tools to help companies calculate the actual return that technology brings to the corporate bottom line.

2] IBM is the world's leading manufacturer of computer hardware. Some of its products include desktop and notebook PCs, mainframe and servers, storage systems, and peripherals. IBM is also the second largest software provider (the first one is Microsoft) and one of the leading manufacturers of semiconductors.

3] Training magazine is a professional development magazine that promotes training and workforce development as a business tool. The magazine covers management issues like leadership and succession planning, HR issues like recruitment and retention, and training issues like learning theory, on-the-job skills assessments, and aligning core workforce competencies to enhance the impact of training and development programs on the company's bottom line.

4] Apart from the pay and other incentives, these companies concentrated on building a corporate culture that encouraged creation and application of knowledge, not only for the betterment of the company, but also for the betterment of individual employees.


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