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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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

During this year, IBM reported a return on investment (ROI)5 of 2284 percent (Refer Exhibit III) from its Basic Blue e-learning program. This was mainly due to the significant reduction in the company's training costs and positive results reaped from e-learning.

Andrew Sadler, director of IBM Mindspan Solutions6, explained the benefits of e-learning to IBM, "All measures of effectiveness went up. It's saving money and delivering more effective training, while at the same time providing five times more content than before." By 2002, IBM had emerged as the company with the largest number of employees who have enrolled into e-learning courses.

However, a section of analysts and some managers at IBM felt that e-learning would never be able to replace the traditional modes of training (Refer Exhibit IV) completely.

Rick Horton, general manager of learning services at IBM, said, "The classroom is still the best in a high-technology environment, which requires hands-on laboratories and teaming, or a situation where it is important for the group to be together to take advantage of the equipment."

Though there were varied opinions about the effectiveness of e-learning as a training tool for employees, IBM saw it as a major business opportunity and started offering e-learning products to other organizations as well. Analysts estimated that the market for e-learning programs would grow from $2.1 billion in 2001 to $33.6 billion in 2005 representing a 100 percent compounded annual growth rate (CAGR).

Background Note

Since the inception of IBM, its top management laid great emphasis on respecting every employee. It felt that every employee's contribution was important for the organization. Thomas J. Watson Sr. (Watson Sr.)7, the father of modern IBM had once said, "By the simple belief that if we respected our people and helped them respect themselves, the company would certainly profit." The HR policies at IBM were employee-friendly...

Excerpts >>

5] A measure of a corporation's profitability calculated by dividing the fiscal year's income with common stock and preferred stock equity plus long-term debt. In general, ROI can be considered the income which an investment returns in a year.

6] IBM's e-learning division. It offered e-learning consulting, content development and solutions installations to large corporations worldwide.

7] Watson Sr. joined IBM in 1914 as the managing director and later on, took control of the company after the death of the chairman, George W Fairchild, in 1924.


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