As IDC reported in August, investment in learning technologies continues to be a priority compared to most other spending alternatives, but content development and learning strategy are returning to the top of CLOs’ investment priorities.
According to more recent research from IDC, most enterprises expect to continue their investment in learning management systems, assessment systems and performance management capabilities, but are also eager to try new delivery modalities such as simulations, mobile learning and collaboration and social tools. Technology remains an important component of the learning and development tool kit.
Every other month, IDC surveys Chief Learning Officer magazine’s Business Intelligence Board (BIB) on a variety of topics to gauge the issues, opportunities and attitudes that are important to senior learning executives. For the last several years, members of the BIB have been asked to provide insight into their investment choices. This month research digs deep into how companies are investing in learning and development technology and how spending priorities are changing.
Overall, learning and development investments are increasing after the notable declines in 2009. A large percentage of firms changed their spending between 2008 and 2010, decreasing and then recovering learning budgets in reaction to the global financial crisis. Very recently, increased economic uncertainty is again causing pressure for learning and development budgets.
Rise in 2011, Decline in 2012?
After two years of decline, more than half of CLOs reported their 2011 budgets are higher than in 2010. More enterprises indicated their learning budget increased in 2011 than in any year since 2005. Much of this increase is in reaction to changing priorities and opportunities.
As recently as May, the trend in learning budget changes looked even better for 2012; slightly more than 50 percent of CLOs expect their budgets to increase in 2012. However, July data suggests the economic uncertainty is returning.
As a result of recent economic turmoil, roughly 35 percent of CLOs report their budgets have been reduced since the beginning of 2011 and another 38 percent report no change in budget for 2011. The remaining 27 percent report their learning and development budgets have increased since the beginning of 2011. About 45 percent report the biggest challenge to their 2012 learning and development plans remains their budget.
Productivity, Alignment and Delivery
CLOs continue to report a strong alignment between their priorities and the business but also continue work to increase that alignment. This attitude, recognition and relevance to the business is central to the learning organization’s value to the enterprise. Figure 2 shows a list of business priorities that are influencing learning and development priorities, including a key priority for many CLOs to improve their ability to help their enterprise succeed.
Attracting and retaining employees, and responding to market forces demonstrates the broader responsibility to which CLOs expect to respond. As they see their role shifting from transacting training to influencing business performance, these priorities become the core of their learning strategies. It likely will include combining organizational design, measurement and technology strategies to improve performance.
Organizations also continue to invest in delivery alternatives, again reflecting pressures to deliver more content to the widest possible audience. Research reported in Chief Learning Officer magazine in August showed that informal learning, leadership and executive development are investment priorities for CLOs. The total spending and net growth in spending for those areas is increasing.
A solid underlying infrastructure is often essential to implement strategy. This infrastructure is technical in nature, but for CLOs it is also a skill infrastructure — a robust competency program. But with a more complex infrastructure comes greater integration requirements. So, integrating data from multiple systems is a business priority, and investing in a competency management program is a key learning and development technology priority.
Survey results reflect an industry-wide trend toward increased focus on organizational performance. The CLO is often responsible for establishing and managing change initiatives and increasing organizational competence. These responsibilities are well aligned with the historic role of training, but bring new challenges and requirements. Organizations are increasingly tasked with assessing organizational effectiveness and facilitating interventions to improve performance. Performance management and analysis is increasingly important for CLOs, and they are responding by focusing their priorities on improved organizational performance. With the aforementioned business priorities, the learning and development technology priorities reflect an increased need for flexible, efficient delivery options, including e-learning and mobile technologies.
Analytics remain a priority to help enterprises better focus their learning and development efforts. These are typically focused less on utilization metrics and more on the impact skill and training has on employee and organizational performance.
Learning management systems remain another important technology priority. Companies are continuing to invest in their technology infrastructure, and significant percentages are planning to increase their spending. Overall, 90 percent of enterprises expect to maintain or increase technology spending, which is similar to 2009 and earlier research. Although the mix and breadth of technology used in learning continues to expand, improving the management, distribution and reporting on skill attainment and learning events remains an important priority for CLOs.
More CLOs also expect to increase their investment in learning management systems. Organizations are continuing to explore the use of collaborative technologies, but current spending on social and collaborative software is small, and about the same percentage of CLOs report an intention to increase spending next year on social and collaboration software as in prior years. On the other hand, more are expecting to increase their spending on assessment and evaluation systems.
These technologies are becoming more important as organizations seek to better evaluate learning and to continue on the road to high performance. Enterprises are also increasing their spending on performance support technologies. While these take on a variety of form factors, the importance of on-the-job assistance is increasingly recognized as an inexpensive way to increase capability in a workforce that might have expanding responsibilities.
Virtual classrooms are becoming a more important component of the enterprise learning delivery arsenal. Also, e-learning in its various forms offers many advantages, among them flexibility and convenience, which continues to be important for CLOs. Other delivery technologies such as simulations and the use of gaming environments may offer new ways to train employees, but there appears to be limited investment in these technologies across most organizations.
Content authoring tools, improved access to content libraries and content management software are frequently mentioned as priorities and on CLOs’ wish lists. Social networking and collaboration tools are also important for CLOs, though their best use has yet to be fully defined. These desires reflect corporate education trends.
Delivery Mix: Incorporating New Approaches
Going forward, CLOs expect to moderately increase their use of asynchronous e-learning, mobile learning, virtual learning environments and synchronous e-learning. Increased use of these technology-driven modalities will result in a slight decline in instructor-led learning. At the same time, these approaches are expected to increase the availability of learning and make it easier and more efficient for employees and other learners to ultimately take the classes they need.
While about half of CLOs report developing or purchasing content for mobile devices, the steps are tentative and exploratory. Predominantly, the device targets are iPad/tablet type devices or smartphones — these devices account for approximately 40 percent of spending to develop content for mobile use. Other mobile devices such as personal media players and e-readers are much less frequently cited and together account for the next 20 percent of spending on content and content development.
Learning investment priorities are consistent with the organizational priorities and financial pressures brought on by the economic crisis. Those pressures continue to change in response to a slow recovery. While CLOs are conservative in managing their technology portfolios, changes in priorities in investment areas are an effort to provide the maximum company benefits.
During the next 12 months, CLOs will continue to align their efforts with organizational priorities and leverage technologies to achieve their goals to support organizational learning and change. Increased use of competency management, learning management and a wide variety of delivery modalities will increase the CLOs’ effectiveness but also will increase the complexity of their responsibilities. Continued budget pressures along with increased organizational requirements for productivity and effectiveness indicate the operating environment will remain challenging.
However, with appropriate investment in new technologies and continued focus on enterprise needs, CLOs will improve their ability to help their organizations succeed.
Cushing Anderson is program director for learning services at IDC. He can be reached at editor@CLOmedia.com.