New Approach To e-Learning Is Needed To Tap Into $14 Billion Market

Report identifies three principles to guide e-learning providers away from early mistakes. Professional and corporate segments represent highest potential for growth.

E-learning, once heralded as a revolution in the business of education, was largely perceived as a casualty of the dot-com collapse. However, forecasters now predict a resurgence in the e-learning market, expecting it to reach the $12-14 billion range by 2004. According to a new report by strategy and technology consultants Booz Allen Hamilton, providers of Internet-enabled learning will capture a share of the market only by shifting their focus away from the ideals of the dot-com era and adopting a new, achievable vision.

The report warns existing and new entrants in the e-learning arena of attempting to reinvent or replace traditional learning tools through new media, and outlines three principles to guide providers towards success, namely:

• Develop and distribute education in "bite-sized chunks" — that is, small, self-contained units, rather than full semester-long courses as part of complete degree programs;
  
  
• Fill gaps in the traditional learning market through customized instructional tools or new delivery methods, rather than trying to replace the traditional teacher/textbook offering;
  
• Provide new and better mediums for learning built around traditional content, such as electronic versions of print-based products with added features, rather than focus on creating new and improved content.
  

"E-learning stumbled in the past because providers didn't understand what consumers needed," said Reggie Van Lee, Booz Allen Vice President. "Businesses made the mistake of expecting consumers to fulfill all of their educational goals online."

The report breaks down consumers of education into five segments: School, Higher Ed, Professional, Corporate, and Lifelong Learners, each with its own distinct opportunities for e-learning providers.

Booz Allen sees the greatest potential for e-learning success within the professional and corporate segments, delivering highly targeted curricula designed to develop specific, job-related skills or gain professional credentials. Corporations, which spent over $30 billion in training in 2000, will depend more and more on online training in the current cost-conscious environment. IBM has saved $350 million in training-related traveling costs by putting most of its courses online.

Sumita Bhattacharya, a Principal at Booz Allen, said: "By applying the three principles across the learning segments, we can begin to lay out a roadmap of what lies ahead for e-learning."

In the school segment, Booz Allen expects e-learning for the classroom to be largely supplemental, involving products designed to make teachers and textbooks more effective, rather than replacing them. Outside the classroom, an emerging area of opportunity is professional development for teachers. Classroom Connect, an e-learning portal, has achieved some success in this area by offering a wide range of products from how-to guides to graduate credit hours.

In full-time higher education, the greatest opportunity is in the support function, providing tools for campus-wide portals or supplying course materials online. E-learning in part-time higher education is more of a challenge for new entrants, as the success of the national roll-out of the University of Phoenix Online serves as a barrier to entry for new competitors. The least likely area of for success in e-learning is the lifelong learners segment, largely because education for this group plays a recreational and social role that cannot be duplicated through on-line channels.

"E-learning will find its largest audience outside of traditional educational institutions," said Bhattacharya. "The players most likely to help e-learning realize its potential, and therefore gain from it, are the content providers, equipment and infrastructure providers, and high-speed delivery providers."

Booz Allen and Hamilton Consulting