Oracle Corporation Implements ilearning, Reduces Training Costs in the United States by 24%

Transcription

1 Oracle Corporation Implements ilearning, Reduces Training Costs in the by 24% An IDC ebusiness Case Study Sponsored By Oracle THE ORGANIZATION Oracle Corporation is one of the world's largest enterprise software firms Annual revenue exceeds $10.8 billion. The company offers database, tools, application products, and related consulting, education, and support services. Oracle University, Oracle Corporation's training organization, delivers more than 92,000 student days of internal training annually to employees alone. BUSINESS CHALLENGES Streamline internal training operations Align with corporate cost-savings goals Train 20,000 U.S. employees annually on more than 850 products Reduce training expenses by 25% in two years TRAINING INITIATIVES Increase online delivery of courses Centralize and automate administration Implement self-service registration THE SOLUTION Implement Oracle ilearning BUSINESS BENEFITS Maintained quantity and quality of training Reduced cost of instructional delivery by 28% Decreased total cost of training by $12.6 million or 24% in two years

2 Oracle Corporation is the one of the world's largest enterprise software companies, providing enterprise software to some of the largest businesses in the world. With annual revenue of more than $10.8 billion, the company markets database, tools, and application products, along with related consulting, education, and support services. But, like many maturing companies, the global software firm needed to reduce its cost of doing business in every area of its operation. For Oracle, training 20,000 employees was not an optional expense but one that was targeted as part of a U.S. organizational alignment process. In this example, Oracle was able to increase the relevance of its training offering, reduce the administrative cost of training, and decrease the lost productivity of its workforce by reducing training time and dramatically reducing the time associated with travel to and from training events. COMPANY BACKGROUND AND BUSINESS ENVIRONMENT In 2000, Chairman and CEO Larry Ellison declared Oracle would save $1 billion a year in expenses by implementing its own software, driving toward organizational efficiency with the implementation of the entire suite of Oracle applications. The overall goal was to ensure a massive organizational alignment ensuring every department was focused on the same goals and being evaluated on the same measures. Every operational aspect of Oracle was reviewed, and the company began the globalization of its entire business into one global instance of its financial and management software within one year. MOTIVATING INITIATIVE: ORGANIZATIONAL ALIGNMENT The impact on the training organization was that it needed to identify savings on the order of the rest of the corporation. Oracle Corporation has always made investing in employee development a priority. With the complex nature of the Oracle product line, combined with diverse technical and industry variations in each implementation, training was essential for the organization to ensure trained and capable sales, consulting, and support organizations were in place. As the company grew, so did the expense for training its employees. The training budget was growing between 5% and 10% per year. By mid-2000, with the economic boom in the technology industry, employee-training costs in the United States were approaching $53 million in training and lost productivity costs. EXPECTED BENEFITS When beginning this initiative, the company expected cost savings measured by reduction in employee training costs, delivery costs, and lost productivity due to unnecessary training. Secondary benefits were needed in administrative labor savings and dramatic productivity increases as a result of implementing employee self-service training and centralizing record keeping and reporting. IMPLEMENTING THE ilearning SOLUTION Oracle University, Oracle Corporation's training organization, was tasked with reducing the employee training budget in the by 25% within two years without compromising the quality of the training. More than 92,000 student days of training were delivered in 2000, with 95% of those days spent in ORACLE 2

3 classrooms with instructors. At the time, fewer than 200 online training courses were available, and only 2% of internal training days were delivered online. BUSINESS CHALLENGES Oracle is a growing business. While the company s revenue increased, its workforce was expected to remain steady at about 20,000 U.S. employees. The number of software products that Oracle University was expected to support was to increase to more than 850. Oracle had an inventory of only about 200 online training courses in 2000 compared with more than 500 instructor-led training (ILT) classes. OPPORTUNITIES Working in Oracle University's favor was the potential for savings. Oracle staff in the spent a total of more than 92,000 days in training in That equates to 4.5 days per employee per year, resulting in what Oracle calculates to be about $36 million in lost time associated with travel and classroom course work. The instructional cost of each employee/day of training delivered by Oracle University was about $800 in THE ORACLE SOLUTION Consistent with Oracle's overall strategy, Oracle University had to: Streamline and integrate its training business Globalize its training management system Provide self-service training to employees to improve timeliness and reduce operating costs To accomplish these goals, Oracle University needed to immediately implement a common learning infrastructure, Oracle ilearning, and dramatically increase the amount of training its employees received from elearning. BENEFITS AND RESULTS As a result of this aggressive move toward online training, Oracle saw several critical benefits in just two years (see Table 1): Quantity of training. Time spent on training held steady at about 34 hours per employee per year. However, the number of courses completed increased threefold. Course length. The average course length declined from almost 30 hours per course to about 4 hours. Cost savings. ILT course costs were reduced more than $5.5 million, or 34%, while Oracle employees took the same amount of training per year. Overall, the instructional cost of training was reduced by more than $4.6 million, or by 28%. Time savings. Lost time due to travel to and from training was reduced by 22% or $8 million in productivity costs excluding cost of travel or lodging. ORACLE 3

4 Table 1: Benefits Realized Through Implementation of Oracle ilearning Benefit 2000 vs Description or Metric Number of training hours No change Training hours per employee per year Training courses taken Increased threefold Training courses completed Instructor-led training (ILT) Decreased by $5.5 million or 34% ILT delivery costs in the course delivery cost Course length Declined from almost 30 hours/course to 4 hours Total delivery costs Decreased by $4.6 million or 28% ILT and elearning delivery costs in the Lost productivity time Decreased by $8.0 million or 22% ILT and elearning productivity loss in the Total training cost Decreased by $12.6 million or 24% Total internal training in the Source: IDC, 2002 ORACLE ILEARNING Oracle ilearning is an enterprise learning management system (LMS) that provides effective, manageable, integrated, and extensible Internet-based training to anyone, anytime, anywhere. Oracle ilearning offers cost-effective, online, corporatewide training. Oracle's LMS may be installed at the customer's site. Also, it is available online, eliminating the need for complex installation and ongoing software maintenance. ORACLE 4

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