‘The very fact that we develop all our training inhouse is unique’ – Julie Bernasconi, Marketing and Business Development Manager,CBT Systems Middle East

India produces the largest number of infotech
graduates. Most of themeither receive instructor-led or limited technology-based training.
With the recent strategic alliance between the Middle East office of CBT Systems and Tata
Infotech, this is likely to change at some training centers. TULEC, the training division
of Tata Infotech, plans to introduce CBT Systems courseware across all its centers in the
country. And driving CBT Systems initiative with Tata Infotech is the company’s Marketing
and Business Development Manager, Julie Bernasconi.

An Australian national, Bernasconi graduated with a Bachelors degree in Business from
University of Technology, Sydney, before joining IBM Australia as National Accounts
Manager. After working with IBM for six years, she left to pursue her own interests. In
January 1997, Bernasconi joined CBT Systems Middle East as its Sales Manager. And within a
year the growth in company’s business led to the acquisition of the Middle East office by
CBT Group Plc. Excerpts from her interview to DATAQUEST:


What is the business model for CBT Systems?
We have two separate business contracts. For the corporate market, we sell the usage of
our CBT solutions. For the professional career market, we have learning centers. In this
country, Tata Infotech would be setting up the learning centers and students would be
charged on a course basis.

For corporate organizations, CBT Systems operates on a three-tier rental model. We go out
and try understanding customer requirements, see what courses they require, what they use
and what existing technology structures they have. We define the mix of technology-based
training solutions for that corporation. Based upon that, we look at the scope of the
project across a three-year period. Typically, most of our customers like IBM, Arthur
Anderson, EDS and British Airways start with a multi-year agreement and we invoice a fixed
amount across the three years. The total amount across a three-year period is divided by
three, so that it is one fixed amount per year.

After the first year, we like to provide flexible options. Our customers need change-and
therefore the need for various courses. So, after the first year we allow our customers to
have an exchange option. They can change their titles under the same licensing agreement,
once in the second year and once in the third year. From either Microsoft NT 4.0 to NT 5.0
or from Microsoft to Novell NetWare or maybe from Microsoft to generic IT concepts,
depending on their requirements.

So how would you describe your
core competencies?

We are very good at being visionaries and innovators in what we do-we pick the right
partners in the first place. That is a part of our success. Another core competency is the
way that we do our business. We are not just a CBT supplier-we are a partner with all the
parts of the IT training puzzle. We also have the greatest number of courses. And our
development center is quite unique. We have 300 developers in Dublin and we ourselves do
all our courseware development.

What about the changing
technology realm toward distributed learning?

There are companies that can write CBTs, but it’s useless if all you can do is put them on
a standalone PC. And, unless you have a proven-internet deployment tool, it is very
difficult for user companies to take advantage of the technologies and platforms in which
they have invested. So, there is no point in having a technology-based training solution,
if you can’t deploy it across an intranet, if that’s the strategy and the way your
business is moving. And this is the beauty of CBT Systems-it does not matter whether you
are that far advanced or whether you are still on a standalone option. We can cope with
the whole range of deployment options.

What has been your strategy on
acquisitions?

CBT Systems has grown rather incredibly-purely on our revenue of selling CBT solutions to
corporations. In the last couple of years, we started growing in different ways. One of
those ways was by acquiring strategic companies and rounding off all the parts in the IT
training puzzle. One of these was a company called Scholars.com. As a visionary, we
believe that e-learning or online training is the way things are moving toward and
therefore the need is to move from a classroom instructor-led orientation to a more
technology-based training solution. Scholars.com gives us that solution in terms of having
questions answered and monitored.

SkillScape is another company. They provide the online assessment facility. Previously, to
find out what training people need was a very time intensive work. You needed to interview
people, and ask what all they have done so far, what their skills are, what are the likely
projects they will be handling, where do they want to move to and, therefore, what
training they require. SkillScape basically provides an online system where one
automatically gets registered to the course that matches closest to an individuals’ skill
and requirement level.

Taragone is another acquired company. Basically a distributor of CBT Systems products in
Australia it also developed human resource training courses. As a strategic alliance, we
completed the acquisition in January 1997.

CBT Systems is the exclusive
training partner for a number of global IT vendors. How do you select these vendors?
Part of CBT systems success-we are the number one in the world in whatever we are
into-is because we have people who can foresee what the trends in the marketplace are
going to be. It is a bit like the future business- where things are going, therefore, whom
should we partner with and take advantage of the leaders with different technologies. And
CBT systems, if you look at our track record, has proven itself in ‘putting its money on
the right horse,’ if you want to use that expression [Laughs]. A lot of times we are the
exclusive partner for an IT vendor to write CBT training for their product. Some of the
vendors with whom we have exclusive relationship include IBM (Java), Lotus, SAP, Cisco
[till recently], Microsoft, Novell, Oracle, and Netscape.

Other than CBT training for
specific platforms, you also focus on generic topics. What do these include?
Generic means it’s non-vendor specific. That means general IT concepts like
networking, project management, database management, analysis and design, client server
technology and others.

What about non-IT subjects like
business management and others?

For human resource skills there is an Australian company, called Taragon, which CBT
Systems owns. Its courses are designed to give people competencies in various HR
management skills like creative thinking, listening effectively, coaching in the
workplace, problem solving, type of topics. They are multimedia-based courses,
incorporating videos and role-plays. They are also designed for use as an individual or as
pairs or as instructor-led for a group session. The business model is different for
Taragon products.

What are the types of market
research activities that you conduct to keep updated with learning requirements?
Oh gosh…there are so many studies being put out all the time. There are studies on
the relevance of certification training and how corporations can save money by having
one-point certified employees. I think you have to look at the growth of technology-based
training, in comparison to other types of training and you will see its eating into other
types of IT training-and at a very fast rate. Basically, we use the IDC reports. They are
quite thorough.

What are the global trends in IT
training?

IDC says that the global spending on IT training is growing at approximately 11% per
annum. And that is the money spent on technology-based training (TBT) and instructor-based
training. If you only look at TBT, it is actually growing at approximately 40% worldwide.
What this means is that, in a growing IT training market, the TBT part is growing even
faster than the actual market and is eating into other forms of training. So, you are
seeing TBT growing at the expense of things like instructor-led training and other forms
of training. In fact, instructor led training is predicted to have a compounded growth
rate of -2% by the year 2002. Here the point is that, it is a fairly hefty acceleration
and the companies who don’t get on to this concept, or start planning for it, will get
left behind.

Have you been able to benchmark
the effectiveness of your courses?

Before we acquired Scholars.com, the company offered several types of certification
training programs for Microsoft. It offered classroom training, our CBT training and
another vendor’s brand of CBT training. However, we found that 90% of CBT Systems students
passed the certification exam the first time, in comparison to only 60% of those who
attended classroom training. Among the people who started with CBT Systems courseware, 95%
completed the training. While among those who started with the other brand of CBT
courseware, only 40% completed their training. The other interesting statistic was that,
people who were using the other brand of CBT courseware needed 200% more support from
instructors to guide them through till the end.

So what gives CBT Systems this
edge?

The very fact that we develop all our training inhouse from the start is unique. There are
also other vendors who write CBTs, but most of them outsource their product development.
So, they have no control over the timeliness of their delivery nor over the quality.
Sometimes, they can have a Word course done from one place and an Excel course from
another place, and then put it all together….

…What you mean to say is that
you do not outsource any courseware development….
…We do it all ourselves and that in itself is quite unique. And we truly believe
that out training methodology, in the way we approach the delivery of the courseware, is
proven and it works. People have little time to invest in training these days and we want
to make sure that the time they spend is used effectively. Not that they are just trained
to pass exams, but they are trained to have reality skills, skills for the job.

What about cost cutting and
competitive measures as a reason for outsourcing?
No. We will not compromise our courseware quality or consistency. Our strategy is to
reinvest 20% of our revenue back into research and development of our courseware. That is
one reason why our customers are loyal to us, because they know that is our strategy. So
we believe that there are very good reasons for keeping complete control.

But your competitors have also
invested a lot of time and energy in developing their products. So how do you get an edge
over them?

I think, you only have to look at the quality of the graphics, the look and feel. Those
numbers that I gave you, in terms of why people give up on other vendors’ products and
they continue with ours is because of the way we design our courseware. It is interactive,
graphic rich, and it gives the learner a moving experience from concepts to demonstration,
to hands-on simulation and then testing.

Who would you describe as your
closest competitors?

If you look at CBT Systems as a company, we consider ourselves as a technology-based
solutions provider, not just a CBT supplier. If you look at us in terms of who we are, you
can see there is no one who comes close to us in whatever way you want to measure us-in
terms of the number of partners we have, the number of course titles we offer, the type
and the number of customers, the development centers we have, or our revenue growth
[laughs]. In none of these there is anyone close to us.

What about the IDC listing of
global IT training vendors?

If you look at the top ten IT training companies and that includes instructor-led
training, we are number #9. But if you just look at companies that focus purely on
technology-based training, we are #1. NETG used to be in the top 10 a couple of years ago,
but we knocked them off.

NETG has acquired Gartner
Group’s Learning Division. Do you consider it as an important development?
What can I say, so far we are on the top 10 listing.

Are there any plans to move the
development center to any other part of the world, like say in India?
I don’t believe so. Our development center is growing and we don’t see any need to
move that.

How does the SkillScape online
system work in a corporate environment?

It is basically, an online training assessment tool, which draws out a training path based
upon what I already know and where I want to reach. I was just talking to someone who
wanted Cisco training. They want Cisco training for Cisco certification. Their engineers
are dealing with Cisco products today. If they have 50 people with different skill levels,
how much of training do they need, to get certification. And they want certification since
they are working globally. So SkillScape will be very appropriate for them-since all the
50 people do not need to go through a two-month course.

It is part of what we call our web learning model. There are different models to it. There
is SkillScape, then we obviously have our CBT training courses, Scholars.com online
venture company, a partnership with Asymmetric for companies to develop their own CBTs for
in-house applications. And lastly we have a relationship with Centra, who has a product
called Symposium which allows a virtual classroom to happen.

Coming back to your alliance
with Tata Infotech. Have you also appointed distributors in other parts of the world?
We have appointed distributors in some parts of the world, but we basically work with
both models. In Europe, we have CBT Systems regional offices as well as branch offices,
but we also have distributors or partners acting on our behalf.

So what is the plan for India
with Tata Infotech as your partner?

The plan is to have 50 learning centers by the end of March 1999. These will be new
centers operated by existing TULEC franchisees or new partners.

Who would be the typical users
of the learning centers set up by Tata Infotech using courseware from CBT Systems?
Typically, individual students would use this or a company that wants to train only
three of four employees and it may not find it economical to buy multi-year contracts. The
professional learning centers would be franchisee centers of Tata Infotech, in addition to
their own centers at various locations. Tata Infotech also plans to sell directly to
corporate organizations.

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