IBM Builds a New Business on Its Training Program

By Irwin Speizer

Jul. 7, 2005

When it comes to training and development, IBM likes to have it both ways. The company maintains one of the world’s largest internal training and development programs, last year spending a whopping $700 million. Big Blue estimates that its workers will log 15 million hours of training in 2005.

    But IBM takes training and development a step further. It resells some of its successful learning programs to outside clients—with a markup in price, of course.

    “Part of our strategy is harvesting what’s going on internally,” says Steve Rae, a vice president at IBM Learning Solutions. Programs “are provided to IBM at cost and to clients at retail.”

    At IBM, training and development represents a key element in an overall corporate strategy aimed at repositioning the company. After decades as a computer hardware supplier, IBM has been aggressively moving into the service and consulting industry. In December, it sold its personal computer division to the Chinese company Lenovo.

    “It used to be that we sold products with services attached,” says Ted Hoff, IBM’s vice president of learning. “Now the people of IBM have become what we deliver to clients.”

    IBM expresses its new focus through its marketing slogan, On Demand, which refers to the company’s goal of meeting clients’ needs exactly when they want it, a particularly daunting task in the rapidly evolving world of information technology. For IBM to match its slogan with results, its personnel must stay abreast of all the latest changes.

    For IBM to back up its On Demand promise, its people must be able to anticipate what clients need and be ready with answers. That has required the company to devise ways of rapidly training and developing in-house talent.

“Part of our strategy is harvesting what’s going on internally.”
–Steve Rae, a vice president at IBM Learning Solutions

    To figure out what skills and knowledge its employees need, IBM surveys targeted workers. It has cataloged the skills of about 100,000 employees. That database, in turn, is used to connect employees who have questions to others with the answers, using the Internet and instant messaging. The company estimates that 80 percent of what it considers “learning” falls outside of traditional classroom instruction.

    Rae offers as an example a recent case in which an IBM consultant in Atlanta who was developing an instructional course for a client encountered a problem at 11:30 on the night before the final product was to be presented. The worker sent out a frantic message for help. On the other side of the world, an IBM worker in Sydney, Australia, saw the message, had the answer and immediately sent a reply.

    Problem solved, and the Atlanta worker gained knowledge that could be used in the future.

    Does that interaction count as training and development? IBM says it not only counts, it’s the essence of modern learning: real-time workplace interactions that deliver key pieces of knowledge when and where needed.

    “We are going to enable people to learn through their work, not just with statistics and data,” Hoff says. “I think this is the future of learning.”

    If Hoff is right, IBM may be creating not just a powerhouse internal training and development program but also a learning system that it can sell to other companies around the world.

Workforce Management, July 2005, p. 59Subscribe Now!

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