Case Studies on E-Business Adoption by Canadian Training and Development Firms

Publication Date: July 2004

Table of Contents

• Introduction
• The Methodology
• The Firms Studied
• Results
• Conclusions
• Acknowledgement
• Online Resources
• Appendix A: Interview Checklist
• Appendix B: Case Study Interview Transcripts

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Introduction

The purpose of this study was to develop a better understanding of the factors that lead to the adoption or non-adoption of e-business by private sector education and training firms with a view to determining how to encourage more firms to adopt e-business. For this study, e-business is defined operationally as using the Internet to generate revenue and / or promote new business.

This study was undertaken by the Canadian Society for Training & Development (CSTD) with financial assistance from Industry Canada.

The Methodology

An eleven-question interview checklist was developed (Appendix A). Potential respondents, all senior executives of the firms in question, were sent a personal e-mail with an invitation to participate and with the interview questions attached. Respondents who agreed to participate were interviewed by telephone. A transcript of the interview was produced and verified by the respondent before being included in the study. A transcript of each interview is provided in Appendix B.

The interview checklist also contained eight questions about the organization including number of employees, market segments served, geographic markets targeted and the use of information and communications technologies by the firm, and the availability and importance of a high-speed Internet connection.

The Firms Studied

Fifteen firms were selected, mostly from the CSTD membership list. The sample was chosen to give a diverse cross-section of education and training businesses varying by the nature of the business, size, and geographic location.

A total of twenty-three firms were invited to participate in the study to obtain the fifteen participants. One firm chose not to participate and no response was received from seven of the firms.

Table 1 provides a list of the firms who participated together with the name of the person interviewed.

Fifty-three percent of the firms were located in Ontario; twenty percent were from Quebec; and there were thirteen percent each from Alberta and British Columbia. A total of 15 firms participated in the case study interviews.

A majority of the firms selected, 73 percent, had 1 — 9 full-time employees; 20 percent had 10 — 19; and, 7 percent had 20 — 49.

Market segments served included:

• 93 percent Corporate (private sector businesses)
• 87 percent Government (public sector — various levels)
• 53 percent Individual (Consumer, B2C)
• 40 percent Postsecondary (colleges and universities)
• 33 percent Military
• 27 percent K — 12
• 13 percent Other — non-profit; individual professionals.

Geographical markets served:

• 87 percent Canadian market (all / most provinces)
• 47 percent United States
• 33 percent Ontario
• 27 percent The World / International
• 20 percent European Union
• 13 percent Quebec
• 13 percent Other — Africa; Vietnam

Information and communications technologies (ICT) available in the workplace include:

• 100 percent personal computers, workstations or terminals
• 100 percent e-mail
• 100 percent Internet
• 87 percent network
• 53 percent wireless network
• 40 percent intranet
• 13 percent electronic data interchange (EDI) not on the Internet
• 13 percent electronic data interchange (EDI) on the Internet
• Other: 13 percent groupware / conferencing tools; virtual classroom; FTP (file transfer protocol); and 7 percent learning management system (LMS); virtual private network (VPN).

All of the respondents indicated that 100 percent of the people in their organization had access to a personal computer, e-mail and the Internet for their work. All but one organization had a high-speed Internet connection and all indicated that it was very important to critical for their business. Some respondents noted that it is also essential for their clients to have high-speed access for tasks like exchanging large files, project management and collaboration, and using Web-conferencing with voice over IP (VoIP).

Results

• What does e-business mean to your firm?
• Why did your organization develop a capacity for e-business?
• Does your firm have a forma e-business strategy or plan?
• What guidelines or best practices did your firm use?
• What are / were the major challenges faced in developing an e-business capability?
• What criteria are used to judge the success of e-business initiatives?
• In what positive ways has e-business impacted your organization?
• In what negative ways has e-business impacted your organization?
• How do you evaluate / quantify the cost-benefit of your e-business?
• What advise or lessons learned do you have for others wanting to use e-business?
• Are there any particular resources that you would recommend to others planning to develop an e-business capability?
• Is there anything else that you think might help others develop successful e-business initiatives?

Answers to the questions asked of the respondents form the basis of the results. An initial summary of answers is followed by quotes selected from among the answers provided. The respondents speak for themselves. The complete transcript of each interview is provided in Appendix B.

What does e-business mean to your firm?

Respondents were unanimous in their endorsement of the need for their firms to use e-business, defined as using the Internet to generate revenue and / or promote new business.

We have cut mailing and printing costs by about 80 percent by using the Internet to distribute our newsletter. (Dale Wilcox)

For us, e-business is one of many ways we satisfy the needs of our clients. (Jody Bruner)

It's a very important marketing tool for us. (Robert Abell)

E-business is not just sales, but a whole way of keeping in contact with clients, generating leads, and increasing sales. (Jay Bahlis)

E-business is the firm. E-business is our sole business; our delivery channel; and, one of our sales channels. (Jim Haufe)

For us, e-business means primarily the application of Internet-related technologies for business communications, marketing, and project management — both for internal use and with our clients. (Lorne Novolker)

A Web site is the minimum requirement to be in the e-learning business. (Ramona Materi)

E-business involves everything we are doing online, including all three of our related Web sites that provide secure customer interaction and online transactions. (Mark Fitzsimmons)

QualitE-Learning Assurance Inc - DBA "eQcheck" is e-business. E-business means advertising, registering clients, and providing services online. (Kathryn Barker)

We provide people with the ability to purchase our products online, hassle-free. (Deb Kalyn)

Why did your organization develop a capacity for e-business?

A capacity for e-business is generally regarded by the firms interviewed as the minimum qualification for doing business in today's marketplace. Reasons given for developing an e-business capability included:

• to better respond to client needs / provide better customer service;
• to save time and money / increase cost-effectiveness; and,
• to be able to market products / services more globally.

Since we're about "e-Learning", it only makes sense to do our business online. "Walk the talk." As well, we intend to become a global business and that's done most effectively and efficiently working online. (Kathryn Barker)

We developed our Web site to make things convenient for our clients. (Jody Bruner)

We developed a capacity for e-business primarily because our clientele were all over North America and the World. (Jay Bahlis)

A capacity for e-business is clearly essential in today's marketplace. ...our clients expect us to have the capacity to deliver services and content online. The advantages of adopting e-business are strong: it offers better, faster, more efficient ways of doing things. It enables us to operate as a bigger, decentralized organization, working in more places than would otherwise be possible, and to keep in closer touch with our clients. (Lorne Novolker)

We developed our Web site because we wanted to streamline the dissemination of information. (Teresa McGill)

We did 14 focus groups to refine the concept. Clients indicated that they wanted to subscribe online via the Internet and that they wanted to access individual modules of their choice. (Joanne Duchastel)

If you're in the e-learning business, it's simply expected. You have a business card, you have a Web site. (Ramona Materi)

E-business was a natural progression. We developed our first Web site in 1994 and within a couple of years had put tests online and started collecting data. We realized that people actually liked this — thousands of people were taking the tests. For better or worse, it became a necessity to invest further in developing our Web sites. (Mark Fitzsimmons)

We actually adopted e-business for increased cost-effectiveness. (Deb Kalyn)

Does your firm have a formal e-business strategy or plan?

A majority of respondents indicated that they had a formal plan or strategy. Others indicated that they developed their Web site based on marketing objectives and / or client needs.

Yes, our business plan is based on an e-business strategy. (Jim Haufe)

Yes. We have a formal strategy but it's not entirely documented. This is a plan that is always evolving and responding to the marketplace. (Lorne Novolker)

We have a marketing plan which is highly dependant on a successful e-business strategy. (Joanne Duchastel)

Yes, the online side of our business is definitely our focus at the moment, but we have to be fairly flexible in responding as we see new opportunities. (Mark Fitzsimmons)

Yes, we have goals for the next one to two years. (Deb Kalyn)

We have a formal business and marketing plan. The e-business part has evolved as part of our overall strategy in response to both client needs and available ubiquitous technology. However, technology is not a focus of our business plan. The technology is simply a means whereby Workingfaster.com makes its business happen. Our customers don't focus excessively on technology — just on getting things done. (Rita Vine)

Day to day we are always trying to figure out how to improve. (Robert Abell)

Yes, it's part of our marketing plan. (Jay Bahlis)

No, we develop our Web site features in response to client requests and needs. (Jody Bruner)

What guidelines or best practices did your firm use?

Respondents gave responses ranging from common sense to researching what others have done to conducting needs assessments and focus groups with their clients to develop their e-business capabilities.

Basically we did a lot of research. We have 20 years experience in training and performance development, and we polled both existing and potential clients on their thoughts. (Joanne Duchastel)

When developing our online course, we partnered with an experienced organization, Embanet. (Teresa McGill)

Good Web site design is the key. We involved professional designers. (Mark Fitzsimmons)

In setting up our Web site we used best practices for e-business. (Jim Haufe)

In terms of our "internal" e-business capacity, we just went with what we felt we needed and could support on our own. With respect to our e-business services, our clients and the marketplace in general have driven the development process. (Lorne Novolker)

We developed our approach based on what we knew about good e-learning, quality Web sites and search engine optimization. (Kathryn Barker)

Our application had to be user-friendly. We are in the people business. The application has to fit the look and feel of our company. Our key question is: "Does it fit how we work? (Dale Wilcox)

On the product side, decision-making was based on existing marketplace standards, mainly for library use, and principally surrounding authentication of Web-based content products. Authentication standards for electronic products are very important, especially when transactions are involved. (Rita Vine)

What are / were the major challenges faced in developing an e-business capability?

Major challenges identified included:

• lack of knowledge of the required technologies;
• difficulty in getting good or impartial advice about what to do;
• lack of available and proven expertise; and,
• the costs and time required to develop e-business capabilities.

On the matter of payment processing, finding a reasonably priced service to handle online payments in US dollars is an ongoing challenge. (Rita Vine)

Quite simply time and money! (Robert Abell)

We had to set up an account and register a company in the US to be able to accept payments in US currency from US clients. Canadian banks were not very helpful. (Jay Bahlis)

We used the "if we build it, they will come" assumption in setting up our e-business Web site. But, we were immediately confronted with the adoption challenge. (Jim Haufe)

The biggest challenge is that technology is changing so quickly and can be prohibitively expensive and risky to adopt, especially for a small business. And yet, you must be innovative and responsive to emerging technologies or be left behind. (Lorne Novolker)

The biggest problem is lack of convergence of the different technologies. (Teresa McGill)

The major challenge was the lack of anticipated technology in rural areas, especially the lack of access to high-speed, always-on, Internet service. (Lynda Trommelen)

Technology, time and cost! Advertising and public awareness is a huge challenge for a new business concept. "Build it and they will come" doesn't work. (Kathryn Barker)

Understanding the technology and its implications was and continues to be a challenge. (Dale Wilcox)

Lack of expertise — for e-commerce
Expense — it was expensive to develop our e-commerce capability and expensive to maintain.
Risk — we were among the first to offer e-commerce capabilities. The model is still very new for most people.
Security issues — people are afraid to buy online.
Sustainability — everyone thinks that once you have your e-commerce site you are finished — in fact you are just beginning!
Viability — it takes time to develop e-business (Joanne Duchastel)

Our greatest challenge was finding a Web developer capable of producing the Search Portfolio. There were widely variable cost estimates for the work that was required. We received estimates ranging from $4 000 to over $100 000 based on the same specifications. (Rita Vine)

What criteria are used to judge the success of e-business initiatives?

Criteria used to judge the success of their firms' e-business initiatives mentioned by respondents included: sales, Web site hits / traffic, cost reductions, increased market reach, better customer service and the addition of new products and services to their core business.

Our main criterion is always return on investment. (Mark Fitzsimmons)

Revenue and increased public awareness are the main criteria we use. (Kathryn Barker)

Our main measure is hits that turn into sales — really performance. (Robert Abell)

We have certain targets — e.g., maintaining contacts with clients, leads generation, and e-commerce — trying for sales that wouldn't have been generated otherwise. (Jay Bahlis)

Our criteria are sales, market penetration and return on investment. (Jim Haufe)

The two main criteria are volume of business and customer satisfaction. We are able to track how people have found us and how much traffic comes through the Web site. It's not just about new business. We are also looking at the level of customer service we can offer existing clients using the Web site and e-mail. (Teresa McGill)

Our e-business initiatives are judged by two factors - lowering the costs of delivering service to customers and generating greater market reach. (Rita Vine)

We judge the success of our initiatives in a number of ways. We determine whether an e-business service makes us competitive by attracting prospective clients and winning new projects for us. Through client and team feedback, we learn whether our initiatives are having an impact on things like project management (positive or negative) and perceptions of the project's success. We also assess an initiative from a strategic point of view. Although it can be hard to measure and quantify the benefits of a new technology, we always have to ask ourselves what is the cost of not adopting it? And how well does it fit in with our vision of the company? At the end of the day we judge that the benefits of e-business outweigh the costs. (Lorne Novolker)

Our main measure is hits that turn into sales - really performance. (Robert Abell)

In what positive ways has e-business impacted your organization?

It's saving time and money although it cost lots of time to set it up. (Teresa McGill)

It brings in potential customers and allows a relatively small company to have a relatively large footprint. (Robert Abell)

Being able to market to our US customers is the main positive benefit. (Deb Kalyn)

It offers added value to partners and clients. (Jay Bahlis)

The development of e-business as a sales channel has been positive. (Jim Haufe)

When used properly and implemented efficiently, e-business saves us money in terms of operating costs. It also generates revenue for us. It has enabled us to be in contact with one another anytime, anywhere. Individual staff and associates feel much more part of a team as a result. We can also accomplish much more with e-business than we could do otherwise. (Lorne Novolker)

We don't talk innovation — we do it! (Joanne Duchastel)

It's a way to have another distribution channel. Our online presence has led to sales around the world. (Mark Fitzsimmons)

It's far less capital intensive than starting a traditional business. (Kathryn Barker)

It has reduced training preparation and travel time for instructors. It has improved our capacity to deliver courses to remote geographic areas. Early indicators suggest that online courses have generated a larger percentage of repeat business than our instructor-led courses. The ubiquity of the e-program is a very important outcome. (Rita Vine)

It saves us a lot of time, especially when recruiting trainers for particular projects. (Judith Bond).

In what negative ways has e-business impacted your organization?

It takes time and costs money and there is the constant challenge to do it right! (Robert Abell)

Everyone knows what our pricing is. You can't hide from the competition. (Jay Bahlis)

Technology can cause headaches, especially when factors outside of your control (Internet down-time, viruses, temperamental hardware) unexpectedly interfere with your team's work. There are always hidden costs related to technology that you can't easily predict. (Lorne Novolker)

We lack financing. We lack time and energy to do everything we'd like to do. (Joanne Duchastel)

There are huge issues regarding the technology infrastructure, adequate resources and connectivity in the non-profit sector, especially in rural areas. (Lynda Trommelen)

Technology always has its challenges and sometimes fails. (Deb Kalyn)

It's very hard for a small business to keep up with all of the technologies in use by our customers, which are changing constantly. (Rita Vine)

How do you evaluate / quantify the cost-benefit of your e-business?

Respondents whose firms deliver products online or derive significant business from their online operations use traditional ROI measures. Firms who use their Web site mainly for marketing or client support tend not to use a formal process.

Our basic measure is business that comes in as a direct result of our Web site. (Robert Abell)

Basically we know the cost of each element so it's a fairly straightforward process of comparing income to costs. (Jay Bahlis)

We're also aware that not every investment in e-business improves ROI in a way that's easy to measure — sometimes, the investment just makes our life easier than before. (Lorne Novolker)

We track investment versus sales and also the direct impact on the business. (Mark Fitzsimmons)

We monitor the classic ratio of cost inputs over revenue and how it shifts over time. (Kathryn Barker)

We look at the revenue and the actual cost to deliver our online products. (Rita Vine)

Our business is 100 percent e-business and we can track costs versus sales. (Jim Haufe)

What advice or lessons learned do you have for others wanting to use e-business?

I would advise them to consult with a specialist or to carry out independent research to help them envision an overall e-business strategy before investing too much time and money in piecemeal solutions. (Teresa McGill)

If you don't have the knowledge and skills to develop your Web site, find somebody who knows how to do it right. Then ensure you can be found by clients looking for your kinds of products or services. (Robert Abell)

Don't build it and hope that they will come. Respond to your clients. (Jody Bruner)

I think it's definitely worthwhile to get into e-business. You have to offer something unique. You have to know your audience and what they need. There is more to e-business and e-commerce than the technology. There are also the implications on the business side. It does take time - don't be discouraged. Don't think about it as short-term. Think of it as a two to three-year investment. (Jay Bahlis)

The key lesson is that if I'm a training firm and I'm thinking of an e-business — fundamentally a new product in a new market space — I have to focus on how to sell not only the product but also how to directly influence change to an established (and, therefore, trusted) method of consuming my professional development. Until workplace and independent professional learners progress demographically to be naturally receptive to technology-based education, if e-learning is to be a significant part of your business, you had better figure out how to sell both. (Jim Haufe)

Make sure you are doing it for the right reasons. Think it through. Availability, security, and reliability are crucial. (Lorne Novolker)

If you're thinking about getting into e-business, hire or work with someone who is experienced and who knows something about the requirements. Your business can't afford to make a mistake. Have some ideas on what you want to do, then get advice. (Ramona Materi)

CAUTION! It's important to understand the magnitude of the commitment that is being made. Try to work with entities that are already established in a 'win / win' way. (Joanne Duchastel)

You can't use the "build it and they will come model". They (non-profit sector) don't even have the car to get on the highway. (Lynda Trommelen)

Keep it simple. Focus on exactly what you need to get across. People just want the information. (Mark Fitzsimmons)

If you want to do transactions over the Internet you need to benchmark best practices regarding security of financial transactions, intellectual property and copyright protection, and safe guarding client information. (Kathryn Barker)

Just have lots of patience and money. (Dale Wilcox)

One of the most important lessons we learned was to resist the allure of technology and to instead think about the audience. Carefully consider the technological capabilities of the customer. What are they comfortable with? What type of technology do they have? (Rita Vine)

Make sure your Web site is alive. (Judith Bond)

Are there any particular resources that you would recommend to others planning to develop an e-business capability?

We used the ASTD (American Society for Training & Development) and CSTD (Canadian Society for Training & Development) Web sites and their white papers on e-learning. The local technology council was a resource and networked me with people in the community who were involved in the technology. I also used the Health Canada and OLT (Office of Learning Technologies) site of HRDC (Human Resources Development Canada). (Linda Trommelen)

Read Jim Carroll's books — they're targeted at small business and have practical and useable advice. (Ramona Materi)

It (e-business) is a specialist area, so it pays to work with others who know how to do it. Pay-per-view organizations like Overature are helpful. We recently also signed up for MS Submit, which is a Web site analysis and submission service that appears to be quite powerful. (Robert Abell)

Jakob Nielsen's usability guidelines — www.useit.com/alertbox/. Don't Make Me Think: A Common Sense Approach to Web Usability by Steve Krug. Look at other Web sites; collect ones that you like and ones that you don't, and learn from them. (Jody Bruner)

Initially on e-commerce we went with VeriSign for processing. They have white papers and a lot of other information about transaction-processing on their Web site. Trade magazines are another good source of information — many have ratings and comparisons of suppliers. (Jay Bahlis)

Is there anything else that you think might help others develop successful e-business initiatives?

You've got to "walk the talk". Our whole life is predicated on the idea that the Internet is going to work. I'm not so sure that it will continue. I find the prospect of failure frightening. I can foresee a day when we may all have to pay more for a better service. E-business is not going to get cheaper. Also, you still have to use good business practices. (Kathryn Barker)

Do a needs assessment and a realistic plan before launching the project. Recognize that acceptance by people and their readiness to embrace the technology is not always strong and can scuttle the best plans — e.g., the use of groupware tools. (Linda Trommelen)

Developing an infrastructure for e-business is merely one part of the challenge. Gone are the days when "if you build it, they will come." Appropriate marketing is essential to help customers find you and your products. Although Internet marketing is not always the best way to proceed, entrepreneurs need to have some understanding of search engine optimization and how to market using the Internet — they have to do some key words buying to have their Web site found by others. (Rita Vine)

It's not about the technology. If there ever was an organizational change it's e-learning. (Jim Haufe)

It's harder for smaller businesses to implement and manage e-business than for larger ones. We have to be pickier in our choice of technology (and technology companies) and more strategic in its usage. We must be completely flexible and be ready to adapt to whatever the client has or needs by way of e-business. As far as advice goes, think things through and learn from experience. Don't go up looking for a fastball, you'll often get a curve. (Lorne Novolker)

Internships programs can provide expert help at relatively low cost. Think about your local college or university. Many young people are Net savvy and can be a big help. (Ramona Materi)

I strongly advise that people investigate the various options for key words pay-per-click referrals. (Robert Abell)

Conclusions

Developing an e-business capacity is seen as a necessary challenge by respondents.

Our Web site legitimizes who we are. Using the tools that are part of today's workplace puts us in today's workplace. This is a subtle message requiring the Web site. (Judith Bond)

There are few guidelines and no "cookie-cutter" models of what is required for a successful e-business. As one respondent noted:

The e-side of business is a bottomless pit — you just don't learn about e-business until you are in it. Bottom line, e-business is not for the faint-of-heart. You have to be really brave and fearlessly visionary. You have to have an eye on the long-term. (Kathryn Barker)

One respondent who serves the non-profit sector, primarily in rural Ontario, noted that this sector is lacking in up-to-date technologies and technical expertise. As well, in rural areas, this is combined with a frustrating lack of access to broadband Internet services.

There were a set of common challenges identified which include:

• the cost and time required to develop an e-business capability;
• the constantly changing, rapidly evolving nature of the technologies being used;
• difficulties in finding reliable and validated information and expertise;
• the costs and complexities associated with online transaction-processing, and,
• raising awareness and acceptance of all things "e", especially e-learning.

Acknowledgement

The Canadian Society for Training and Development (CSTD) would like to acknowledge the financial contribution of Industry Canada, without which this report would not have been possible. Note that the opinions in this document do not necessarily reflect the views of Industry Canada.

Online Resources

Canadian Society for Training and Development (CSTD)
www.cstd.ca

COMET - Commercial Education & Training Sector Information
http://strategis.gc.ca/comet

Canadian Training Solutions for Workplace Learning
http://strategis.gc.ca/training

SKILLNET.CA
http://skillnet.ca

Student Connections
http://studentconnections.ca

Office of Learning Technologies
http://hrdsc.gc.ca

EDUSPECS
www.eduspecs.ca

Canadian e-Business Initiative
www.cebi.ca

Ebiz.enable
http://strategis.gc.ca/ebizenable

American Society for Training & Development (ASTD)
www.astd.org

"Permission to publish this report was provided by the Canadian Society for Training and Development (CSTD)."

Appendix A: Interview Checklist