Did you know that Cisco, world leader in networking hardware, switched from classroom training to a web-based solution for its 28,000 sales representatives and cut overall corporate training costs by 40-60%? Meanwhile Dow Chemical did the same thing for regulatory compliance training of its 60,000 employees and contractors. The result? Dow went from spending an average of $95 per student/per course to only $11 with overall annual savings of over $34 million.
The above stories illustrate why cloud based training has become so popular. In large part, this is thanks to its ability to deliver real-world training environments at a fraction of the cost of classroom corporate training methods. This cost effectiveness derives from several factors including lower infrastructure costs, lower travel costs, and scalable, pay-as-you-go, payment plans.
Time Is Money – Reduced Set-Up and Maintenance Costs
Classroom computer labs require a large out lay in hardware and software. This necessitates both adaptation for the multiple operating systems and hardware, as well as on-going maintenance.
In contrast, cloud based training systems are web-based platforms that require no software installation on your company’s hardware system. This eliminates the need to manage your own servers, especially important if you don’t have the IT expertise or staff to handle such a big project. The software is managed for you by the online virtual training provider. This results in significant savings on capital expenditures as well as implementation and operational expenses.
Home-Schooling – Eliminating Travel and Lodging Costs
Companies with branches around the world, have employees around the world. Training staff requires either bringing them all to a central educational facility or sending the trainers out to them. With today’s travel costs, the travel and lodging expenses can really add up! Up to 40 percent of total corporate training costs are spent on travel and lodging alone. WOW. (Dré Noronha, atd.org).
A key advantage of corporate cloud based training is that it eliminates the need for both travel and lodging, making it both cost-effective and accessible to all, anywhere in the world, no matter where they are. Employees can access the materials from their homes or offices, computer or mobile, which is convenient for the employees and bridges the gap of time and geography constraints. Organizations have recognized these advantages and are increasingly implementing the use of technology in their corporate training, with 42% of organizations, on average using technology-based methods to deliver training. Laurie Miller, ASTD Industry report.
Tailored Training – Cost Effective Pay-As-You-Go Plans
In our recent blog post, “Conventional vs cloud- why is cloud-based training so popular? “ We compared the differences between on premise classroom corporate training and cloud-based virtual training and illustrated how they differ. A key point that was discussed was that on premise training platforms have large upfront costs and capacity limits. The size of the training room, server inventory, and trainee headcount are all constrained in traditional campuses. If you under-book, you’ve wasted money on unnecessary infrastructure. If you overbook, you often must rent out additional space and servers at high cost or forgo the additional income opportunity.
A cloud based training course has no such limitations. You can over-book as much as you like, and still support an overwhelming number of trainees. Also, since you are not pre-booking physical space, your upfront financial commitment is significantly lower in the event of a low turnout.
The shared resources in cloud computing infrastructure enable companies to offload capital expenses (CAPEX) and set the price tag to pay-as-you-go operations (OPEX). Those same economies of scale apply to training, and often result in significant cost savings.
Cut It Out – Slashing Training Expenses with the Cloud
In short, Cloud based virtual training helps cut hardware/software costs, eliminate travel/lodging expenses and eradicate wasted classroom space. No wonder they’re becoming so popular.