supply-side


Lots of littles


Peter Phillips looks back at the commercial development of e-learning, and its growth from a small fragmented cottage industry into today’s much larger fragmented cottage industry


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n the early days of e-learning, before anyone had yet invented the term, life was simple. There was no such thing as SCORM (Sharable Content Object Reference Model) or AICC (Aviation Industry Computer-Based Training Committee) to worry about as there were no learning management systems


(LMS). Courses, like books, were mostly purchased for individual use (if often paid for by employers), or for company ‘learning centres’ – usually a spare PC in the corner. Unicorn’s first courseware, an introduction to business finance, was delivered on five floppy disks in a box. The main technical concern in those days was how to copy-protect the floppy


disks so that they could not be pirated. To be honest, that was a pretty small risk, given the tiny size of the market. Software pirates were far too busy running off copies of Lotus 123 and WordPerfect. For content developers there were essentially two business models – selling/ licensing off-the-shelf (OTS) titles, or developing bespoke courseware to order for a fee. Little has changed. Companies faced exactly the same dilemmas as they do today. OTS companies pondered whether they should move into custom and bespoke; bespoke companies, eyeing up that repeatable license revenue, toyed with launching their own generic titles. Of course, you could do a bit of both, and many of us did, but they are different business models and difficult to mix successfully.


The bespoke model There were very few barriers to entry in the bespoke market. You just needed a PC, a box of floppies and a suitable authoring tool. And that, I hear you cry, is still true today – apart from the box of floppies. Indeed, the barriers to entry are arguably lower than ever. Easy entry into a market makes for plenty of healthy competition, but it also tends


to drive down profit margins and in the longer term that constrains growth. Over the course of the past 10 years or so, better communications have exposed providers to


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global competition, most notably from India, resulting in further downward pressure on prices. Many UK bespoke companies have tried to use this to their advantage by setting up offshore development centres. Unfortunately the potential cost savings are rarely fully realised, as the reduced direct costs can be outweighed by additional management costs in ensuring that quality, creativity and cultural relevance are not compromised. And if you quoted on the basis of cost savings that in the event you can’t realise, your margins are squeezed even further. Even in the early days, there were some excellent authoring tools, such as


TenCore. Then came Iconauthor, Authorware, Toolbook and Flash. But all these tools required a degree of technical programming skill if they are to be used effectively. The rise of rapid development tools that don’t require technical coding skills, such as the PowerPoint add-ins from Articulate and iSpring, have lowered entry skill barriers further.


There is still one important constraint on new entrants, and that is instructional/ learning design skills. Anyone with experience of this industry will tell you that these skill resources are a key limit on profitable growth, although that has not always been a sufficient deterrent. I’m sure we have all winced at messages along the lines of “Click Next 150 times then answer three badly written questions to complete this interactive course”.


So while the tools for building e-learning courseware have become simpler to


use, the expertise required to script and design truly effective e-learning remains scarce. It has never been easy to find good instructional designers who understand the subject matter and the principles of effective learning and have the creativity to be able to engage the learner.


The recent trend for buyers to go through formal competitive procurement processes for each e-learning project, in some cases using intermediaries to manage the bidding process, may favour established suppliers, but it also makes it more difficult for businesses to establish long-term relationships and build repeat


e.learning age october 2013


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