Everything I have learned recently about the importance of training being linked to the overall strategy of the business I can trace back to conversations with Cushing and to reading his research reports.
Andy: Cushing, what are you working on these days?
Cushing: I’ve been working on the Marketscape analysis for 2010. I’ve been interviewing all the large ERP/IT vendors about their training business.
I’m finding that they are all extremely interested in live virtual training. Not only are ERP software firms delivering virtual training, but they are also actively encouraging their training partners to do the same.
Andy: 2009 was definitely a year that saw ERP clients tighten down their training and travel budgets. As a result, do you think there’s pent up demand for training?
Cushing: There’s never excess training taken by clients. Training declines more than the decrease of new application deployments. When application sales increase in the following year (as I think they will in 2010), then training comes back, but not as much as the application sales increase. The ratio of training sales to new license revenue is declining.
Andy: What are clients doing to replace formal training and is it working?
Cushing: It is working, up to a point. In 2009 clients found other ways to train their employees. Employees may not be attending formal classes, and as a result they may be less efficient and effective at the beginning, but they can work through their initial lack of knowledge over time.
Employees are taking more personal responsibility for learning how to perform new software functions. Sometimes they will find out the wrong way to do something, and that may backfire later, but they will figure out a way to get the job done.
Andy: It sounds like the other shoe might be dropping soon?
Cushing: Letting client employees hunt and peck to find solutions is not very efficient. Clients need to be reminded of the added value that formal training provides.
Andy: Sometimes clients know exactly what training they want, sometimes it requires a fair amount of discussion to figure out what would best meet their needs. Comments?
Cushing: Most vendors and clients fail to see training as a consulting engagement. So the vendor becomes an order taker. The client hears the vendor say, “here’s my catalog, send me money when you are ready to buy”. A lot of ERP vendors sell training that way.
ERP vendors don’t understand why students are coming to class. They need to work on changing the role of their salespeople from order takers to consultants.
Andy: I can’t disagree with you on that, Cushing. We emphasize figuring out why a client needs training as part of our sales process. Without that knowledge, we can’t become a part of the client’s overall strategy to get more value from their current ERP software investment.
Andy: Cushing, what else have you been working on?
Cushing: One of my interest areas is certifications. I’ve been working with vendors to understand the correlation between certified partner (channel) employees and revenue to the software vendor. No conclusions at this point.
I’ve also been working with CLOs (Chief Learning Officers) on how they feel about delivery modalities—most corporate training organizations don’t feel that their training programs were really helping their companies get out of the current economic downturn.
For example, when a company starts controlling costs much more than before, the training organization should do more than control its own costs. It should have a role in teaching line managers good cost control techniques or something else to make training a key player in executing corporate strategy. CLOs need to continue to translate business strategy changes into their role in implementing those changes.
Andy: Speaking of CLOs, do you have any thoughts on what their role should be?
Cushing: Organizations don’t necessarily need a CLO – but most companies need someone to figure out if the company is leveraging all the capabilities of its’s people and assets.
The CLO (or someone in top management) needs to answer these questions:
How can we line up our people with our business goals?
Do we need to improve our business processes?
How can increasing individual capabilities increase business performance?
Whoever does that is the right person to fulfill the CLO role. And the CLO needs to have the necessary clout to prioritize necessary change.
Andy: Cushing, thank you for your time and I look forward to speaking with you again in 2010.