eLearning in the Life-Sciences...
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L o D Learning on Demand eLearning in the Life-Sciences Industry Eilif Trondsen Harvey Singh Andrew Broderick Contributor: Glenn Oclassen December 2003 © 2004 by SRI Consulting Business Intelligence. All rights reserved.
Transcript of eLearning in the Life-Sciences...
LoDLearning on Demand
eLearning in theLife-Sciences Industry
Eilif Trondsen
Harvey Singh
Andrew Broderick
Contributor:
Glenn Oclassen
December 2003
© 2004 by SRI Consulting Business Intelligence. All rights reserved.
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CONTENTS
EXECUTIVE SUMMARY ............................................................................................ 1
Payoffs from eLearning in the Life-Sciences Industry ................................................ 1
Online Collaboration and Informal Learning ............................................................... 2
Efforts to Leverage and Reuse Digital Content along the Value Chain ...................... 2
Integration of eLearning Systems: Toward a Seamless Infrastructure ....................... 3
INDUSTRY CONTEXT ............................................................................................... 4
Structure, Competition, and Performance .................................................................. 6
Dynamics .................................................................................................................... 9
Learning and Knowledge Implications ...................................................................... 13
KEY eLEARNING AND KNOWLEDGE ISSUES ...................................................... 15
eLearning along the Value Chain ............................................................................. 15A Growing Web of Collaborative Partnerships ................................................... 15Design of a Learning Architecture ...................................................................... 17
Growth of Electronic Collaboration ........................................................................... 17A Collaboration Primer ....................................................................................... 17Selected Developments and a Look at the Future ............................................. 20
Centralization of Learning and Training Administration-Management Systems ....... 21Centralized Learning- and Training-Management Systems ............................... 21Competency-Based Learning ............................................................................. 22Use of Analytics .................................................................................................. 22Use of Learning-Management Functions with ERP Suites ................................. 23
Convergence of Learning and Enterprise Content-Management Systems .............. 24Expansion of Internal Content Creation .............................................................. 25Learning Objects and Multimode Delivery .......................................................... 25
Growth of Mobile Productivity and m-Learning ........................................................ 25Portable-Device Platforms .................................................................................. 26m-Learning and Productivity Applications in the Life-Sciences Industry ............ 27
CASE STUDIES ....................................................................................................... 28
Bristol-Myers Squibb ................................................................................................ 28Company Background and Industry Context ...................................................... 28eLearning Organization, Adoption, and Experience ........................................... 29KM and Content Management ............................................................................ 34Future Plans and Challenges ............................................................................. 36
Genentech ................................................................................................................ 37Company Background and Industry Context ...................................................... 38eLearning Organization, Adoption, and Experience ........................................... 38KM and Content Management ............................................................................ 42Future Plans and Challenges ............................................................................. 43
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Roche Diagnostics ................................................................................................... 45eLearning Activities ............................................................................................ 45eLearning Architecture ....................................................................................... 47Knowledge Management and eLearning ............................................................ 49Performance Consulting, Business-Process Management, and Scorecards ..... 50Future Plans and Challenges ............................................................................. 50
Merck ........................................................................................................................ 51eLearning Activities ............................................................................................ 51Learning and Knowledge-Systems Architecture ................................................. 52eLearning in Merck’s Sales Organization ........................................................... 55Future Directions and Challenges ...................................................................... 56
CONTENT-DEVELOPMENT PERSPECTIVES ....................................................... 56
Selected Content Players ......................................................................................... 58HealthStream...................................................................................................... 60Vitesse Learning ................................................................................................. 60Medsn ................................................................................................................. 61GeneEd .............................................................................................................. 62eTrinsic ............................................................................................................... 63
Content-Market Dynamics ........................................................................................ 63
KEY CHALLENGES AND ACTION PLANS ............................................................. 64
Challenges ............................................................................................................... 65Users .................................................................................................................. 66eLearning Developers ........................................................................................ 66
Action Plans ............................................................................................................. 67Users .................................................................................................................. 68eLearning Developers ........................................................................................ 68
TablesPerformance of the Life-Sciences Industry ................................................................ 7Pharmaceutical Sales Representatives in the United States ................................... 12Content Developers in This Report .......................................................................... 59
FiguresForces of Transformation in the Pharmaceutical Industry .......................................... 5Merck & Co.’s Deal Making ........................................................................................ 8Pharmaceutical-Industry Value Chain ...................................................................... 16Functions in Collaboration-Support Solutions .......................................................... 18Dimensions for Distinguishing Collaboration-Support Systems ............................... 19Phases of Project Work and Primary Collaboration Support .................................... 21Alignment of Knowledge and eLearning with Corporate Strategy ............................ 30Repurposing and Rechanneling of Learning Content .............................................. 32Bristol-Myers Squibb Learning Architecture ............................................................. 33Genentech’s LMS Deployment ................................................................................. 40Strategic Technology Initiatives to Support Business Goals .................................... 42Employee-Centered Portals ..................................................................................... 44
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Toward a Learning Organization and Knowledge Enterprise ................................... 46Roche Diagnostics eLearning Architecture .............................................................. 49A Model for Integrating eLearning and KM at Merck ................................................ 53Paths to Serving the eLearning Needs of the Life-Sciences Industry ...................... 57
BoxesPainful Reports from Drug Companies ..................................................................... 11Consumer Attitudes toward Personal Electronic Health Devices ............................. 12LMS Perspectives .................................................................................................... 41eLearning Course in Clinical Management of Neuropathic Pain .............................. 58
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EXECUTIVE SUMMARY
This report is the third in a series of vertical-industry reports to examine eLearning inspecific industry settings. Previous reports examined the oil and financial-servicesindustries. These industry analyses explore how eLearning can address the industry-specific issues that companies are facing. Executives are demanding stronger evidencethan they have in the past that eLearning “really works” and that eLearning investmentsare yielding a sufficiently high return on investment. The best way to address theirconcerns is to demonstrate how eLearning helps solve key business problems.
Payoffs from eLearning in the Life-Sciences IndustryThe life-sciences industry revolves around a number of very large, global pharmaceuticalcompanies, most of which are fairly conservative and are not typically early adopters ofnew technologies or new ways of doing business that leverage new technology. Few life-sciences companies have come as far with eLearning as have high-technology companies,whose corporate cultures are more open to experimentation and rapid change.Nevertheless, senior managers in a growing number of pharmaceutical companies aregaining interest in, adopting, and supporting eLearning. Moreover, the life-sciencesindustry is changing rapidly, and a growing number of executives see a role foreLearning in helping their companies address important knowledge and learning issues.Although tactical benefits such as cost savings are important considerations, life-sciencescompanies are also recognizing more strategic and longer-term benefits such as improvedinternal learning and knowledge processes—which are especially important in the highlyknowledge-intensive life-sciences industry—and better education of customerconstituencies and business partners.
Three areas are seeing the greatest use of and payoffs from eLearning:
• Sales-force training. eLearning is bringing significant value in many pharmaceuticalcompanies, both by giving sales representatives flexible access to learning and byavoiding the high opportunity cost of classroom-based training. As content improvesand takes advantage of rich media and wireless broadband, the use of eLearning forsales staff will likely increase dramatically. Pharmaceutical companies are alsointerested in “mobile learning” (m-learning) through the use of PDAs with wirelessInternet connection, for instance, although these types of devices will not gainwidespread use for some time.
• Compliance-based training. Like the financial-services industry, the pharmaceuticaland biotechnology industries are also highly regulated, requiring careful documentationof all required training. Because of the serious implications—from damaged reputationsto financial penalties—of violating training regulations, company executives see greatvalue in using eLearning for compliance training, especially as evidence accumulatesthat eLearning is far more cost-effective than classroom-based training.
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• Manufacturing-process training. A number of biotechnology and pharmaceuticalcompanies are testing simulation-based approaches to training in drug-productionprocesses—an area in which even a marginal improvement in production yield canbring dramatic revenue gains. Medical-device and instrumentation companies alreadyhave considerable experience with simulation-based training, and a number ofeLearning vendors have produced highly effective interactive, simulation-basedproducts.
Online Collaboration and Informal LearningThe value chains of the pharmaceutical and biotechnology sectors of the life-sciencesindustry are highly complex: Moving a drug from the R&D phase to the marketplacetakes 10 to 15 years, costs $800 million on average, and involves collaboration with alarge number of private- and public-sector organizations. In recent years, the industry hasseen dramatic growth in the number and variety of strategic alliances and collaborativedeals as companies try to gain access to innovative drugs, competency, and talent.
One result of these developments is growing use of online collaboration and of toolsand technologies that support the communication-intensive, collaborative ways of doingbusiness in these industries. Synchronous eLearning or Web conferencing that allowsarchiving of sessions and searching of session content as part of asynchronous learningprograms is gaining use. Another result of increasing collaborative activities is thegrowing role of informal, and increasingly Web-based, learning via virtual teams andcommunities of practice (CoPs), in part forming electronic communities (e-communities).
Efforts to Leverage and Reuse Digital Content along the Value ChainAlthough life-sciences companies are not in the league of Cisco and other leadingpractitioners of learning-object–based approaches, they now clearly recognize theadvantages of this approach and are starting down this road. They want to take advantageof the rapidly growing volume of digital content, storing it in digital repositories andreusing it in applications at various points along the value chain.
A number of pharmaceutical companies, including Bristol-Myers Squibb (BMS),hope to see growing reuse or “multiuse” of digital learning content in customer learningas well as in learning for medical professionals. A growing number of Web sites provideeducational materials on a wide range of health-care topics, although pharmaceuticalcompanies must adhere to regulatory policies that dictate how they promote theirproducts in educational campaigns.
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Integration of eLearning Systems: Toward a Seamless InfrastructureLike companies in most other industries, most life-sciences companies are still rolling outlearning-management systems (LMSs) across their organizations, and much workremains before they have widespread, and especially enterprisewide, coverage.Companies are also connecting their LMSs to human-resources (HR) and financial back-end systems. None of the companies we have interviewed have selected LMSs from theenterprise-application (EA) companies that provide their enterprise-resource–planning(ERP) systems, but they see potential advantages in using systems from the same vendorand plan to revisit this issue from time to time.
Ultimately, integration also calls for connecting LMSs and other eLearning andknowledge-management (KM) tools and systems—to support collaboration or Webconferencing, for instance—with other enterprise systems. Every life-sciences companyhas one or more content-management systems (CMSs) or document-managementsystems—Documentum is a dominant vendor in the life-sciences industry—and allcompanies we interviewed indicate that they are examining how to connect these systemsto leverage various forms of digital content. Merck, in particular, has evaluated theseissues and concluded that significant technical challenges stand in the way of achieving ahigh degree of integration of these systems. But significant benefits would result fromsuch integration, so companies will continue to look for ways to connect and leverage themany applications and systems that play direct or indirect roles in their learning andknowledge-management programs.
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INDUSTRY CONTEXT
Numerous market drivers and developments are transforming the global life-sciencesindustry, affecting all players and stakeholders. The most important of these drivers—including scientific advances in genomics and proteomics—often involve multiyearprocesses and millions of dollars in costs. Changes in the pharmaceutical industry areparticularly important, given that this segment dominates the life-sciences industry (seeFigure 1).
The demographics of aging and the growing incidence of chronic diseases, cancer,and cardiovascular disease could bring business opportunities and market growth. But anumber of challenges could temper these opportunities and threaten the pharmaceuticalindustry’s ability to maintain historical growth rates: the end of the blockbuster-drug era,patent expirations, a dearth of innovation, a continuing productivity slowdown, increasedsales and marketing promotional costs, the threat of pricing controls and market reforms,and escalating health-care costs and consumer activism.
Amid these challenges, many pharmaceutical companies consider strategic alliancesto be critical to the industry’s future growth path, enabling them to gain access toresearch and development, technology and marketing resources, and expertise. (Figure 2on page 8 shows Merck’s alliances just during the first ten months of 2003.) Considerableindustry consolidation through mergers and acquisitions (M&As) is also likely.
Given the pressures on the life-sciences industry, one or all of the following scenariosare likely to emerge in the near to midterm:
• Dramatically reduced profits (along with business failures and intense consolidation)
• A major shift in the way the industry does business (with lower spending on R&D andgreater risk sharing in deals)
• A paradigm shift in drug development, technology, and efficacy (via more productdevelopment through biotechnology).
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Figure 1FORCES OF TRANSFORMATION IN THE PHARMACEUTICAL INDUSTRY
Scientific Advances
Evolution in KnowledgeBases through Scientific
and TechnologicalInnovation
Innovation Pressures
High Expectations fromand Growing ProductivityDemands on R&D
Industry Consolidation
Ongoing IndustryConsolidation as a Resultof Mergers andAcquisitions and StrategicAlliances
New Patient Needs
Unmet TherapeuticNeeds and Patients’Demands for NewTreatments
Changing Role of KeyStakeholders
• Physicians: Demand forMore Honest, Science-Based Relationship withPharmaceuticalCompanies—More Value inTerms of Information andEducation for Themselvesand Patients
• Patients: More Responsibilityfor their Health
• Payers: Tighter Grip onPrices and Greater Use ofRestrictive Formularies
Sales-ForceProductivity
Growing Need toIncrease theProductivity and Cost-Efficiency of Sales andMarketing Forces
eLearning Implications ofPharmaceutical-Industry Transformation
• Wider Range of Learning Materials for Sales Force to MeetMore Demanding Needs of Physicians and Patients
• More Frequent Updating of Learning Materials to ReflectAccelerating Scientific Advances and Dynamics of Marketplace
• Flexible Content Delivery Options to Meet the Needs ofPharmaceutical Companies’ Constituencies
• Greater eLearning Opportunities Because of IncreasingCompliance Requirements for Industry
• Rising Competency Requirements for Workforce
Source: Cap Gemini Ernst & Young; SRI Consulting Business Intelligence (SRIC-BI)
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Structure, Competition, and PerformanceAs Table 1 shows, several global pharmaceutical companies dominate the life-sciencesindustry. Many of these companies—including AstraZeneca, GlaxoSmithKline, andAventis—have achieved their current global positions as a result of mergers andacquisitions. Industry consolidation will likely continue as players conclude that M&Asare necessary to improve their financial performance and industry standing (as reflectedby their market share)—or to deal with the threats we noted earlier. But an increasinglycomplex web of strategic alliances is also emerging as companies seek to leverage theirstrengths or address perceived weaknesses by teaming up with others. This form ofcollaboration and alliance making has both direct and indirect impacts on learning andknowledge-related processes. In particular, the rising number of strategic alliances andother forms of collaborative deals require pharmaceutical companies to manage dealsbetter than they have in the past. One way to do so is to leverage some of the new toolsand technologies that have come onto the market in recent years (see Growth ofElectronic Collaboration).
By their sheer size and scope of operations, these pharmaceutical companies—andother large ones not in Table 1 (such as Abbott Laboratories, Eli Lilly, Wyeth, andSchering-Plough)—are major targets of eLearning vendors and will continue to representthe “low-hanging fruit” for technology, content, and service vendors in the eLearningindustry. However, though players in the medical-instrumentation and biotechnologysectors of the life-sciences industry are considerably smaller than their counterparts in thepharmaceutical industry, these players are also increasingly attractive targets foreLearning companies. As Table 1 shows, many of these players have seen significantgrowth in revenue or profits, and by the nature of their industry segments, they offersignificant opportunities for future growth.
Although most large pharmaceutical companies in particular, but increasingly alsocompanies in the biotechnology and medical-instrumentation segments, target globalmarkets, the North American market is by far the largest and most attractivepharmaceutical market. Sales in North America exceeded $203 billion in 2002 (51% ofthe world market), versus $90 billion in the European Union (22% market share) and$47 billion in Japan (12% market share), and the region also has the highest rate ofgrowth (12% in 2001–02 versus 8% for Europe and 1% for Japan). These numbersexplain at least in part why U.S. pharmaceutical companies have a strong representationin global rankings (although Europe also has good representation). But the size of theU.S. market, as well as its strong R&D base and scientific talent for drug development,has also led foreign pharmaceutical companies to increase their focus on the U.S. marketand, in the case of Novartis, even move their central R&D operations to the UnitedStates. (In May 2002, Novartis announced plans to build a new research center inCambridge, Massachusetts, as a hub for its worldwide research.) As eLearning hasgenerally spread faster in the United States than in other countries—although certaincompanies in Europe are on par with or even more advanced in their eLearning activitiesthan their U.S. counterparts—this shift of pharmaceutical operations to the United Statesmay accelerate eLearning adoption in the industry.
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Table 1PERFORMANCE OF THE LIFE-SCIENCES INDUSTRY
Sector/Company(Location)
2002Sales
(Billions ofDollars)
2002Profits
(Billions ofDollars)
MarketValuation*(Billions of
Dollars)
SalesGrowth**(Percent)
ProfitGrowth**(Percent)
PharmaceuticalsMerck (United States) 51.8 7.2 99.1 16.7 6.7
Johnson & Johnson (United States) 36.3 6.6 149.4 9.6 16.6
GlaxoSmithKline plc (UnitedKingdom) 34.8 7.6 129.0 5.4 8.3***
Pfizer (United States) 32.4 9.2 246.0 5.0 29.0
Bayer (Germany) 34.8 1.2 17.4 1.2 –22.3***
Novartis (Switzerland) 24.9 5.6 94.3 –1.2 2.0***
Aventis (France) 24.3 2.5 42.3 13.2 —
Roche Holdings (Switzerland) 22.8 2.9 59.4 1.4 —
Bristol-Myers Squibb (United States) 18.1 2.0 49.2 1.2 –54.6
AstraZeneca plc (United Kingdom) 17.8 3.2 47.5 –1.1 35.4***
BiotechnologyAmgen (United States) 5.5 –1.4 79.7 17.5 —
Genentech (United States) 2.6 0.1 42.5 24.7 —
BioGen (United States) 1.1 0.2 6.0 13.0 0.4
Chiron (United States) 1.2 0.2 10.2 19.6 40.7
Medical InstrumentationMedtronic (United States) 7.7 1.7 55.4 15.3 —
GE Medical Systems (United States) 9.0 — — — —
Baxter International (United States) 8.1 0.8 15.6 8.2 7.9
Suzuken Co. Ltd. (Japan) 8.7 0.1 2.4 3.6 14.9***
Becton, Dickinson and Co. (UnitedStates) 4.0 0.5 9.3 5.7 21.3
Boston Scientific (United States) 2.9 0.4 27.9 0.8 0.2
* On 31 October 2003.
** Average annual growth rate during 1999–2002.
*** Net Income.
Source: The Global 2003 1000 Scorecard; BusinessWeek Online; Standard & Poor’s 5000; Business Week;OneSource; SRI Consulting Business Intelligence (SRIC-BI)
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As pharmaceutical companies struggle with research productivity, mergers andacquisitions have been a prominent strategy to wring greater efficiencies out of theirorganizations’ processes. And it appears that the appeal of M&As will not let up any timesoon. According to Pfizer’s chairman and chief executive, Henry McKinnell, the M&Astrategy “reflects a high-risk, high-reward business with some companies getting it rightand others not.” No single research organizational model drives innovation and researchproductivity in pharmaceutical companies, and no conclusive evidence exists to showwhich approach will predominate:
• Mergers and acquisitions are the preferred growth strategy for Pfizer andGlaxoSmithKline. Merck and Lilly believe that organic growth is more sustainable thanM&As—and as Figure 2 shows, Merck has been an aggressive pursuer of strategic-alliance deals.
• GlaxoSmithKline organizes its R&D in six semi-independent research centers thatfocus on specific therapeutic areas, whereas Aventis organizes around target classes.Wyeth outsources clinical-trial research services to Accenture.
• Pfizer expected its consolidated R&D spending to rise to more than $7 billion in 2003,from $4.8 billion in 2002. But increased R&D spending has so far failed to replenishthe company’s drug pipelines.
Figure 2MERCK & CO.’S DEAL MAKING
• 13 February 2003
• MerLion Pharmaceuticals(Singapore)
• Broad Drug-DevelopmentAlliance
• 18 February 2003
• Sunesis Pharmaceuticals
• Alzheimer’s Drugs• 23 June 2003
• Amrad (Australia)
• Asthma Biotech Drugs
• 9 September 2003
• Alnylan Holding
• Gene-ManipulationTechnology
• October 2003
• C Sixty
• Fullerene-Based Drugs
January–October 2003*:Completion of 34 Deals
(1999: 10 Deals)
Source: Wall Street Journal; SRIC-BI
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Some analysts counter the notion that the M&A frenzy will continue, expectingpharmaceutical companies to explore other options, such as buying rights to new drugs.Between 1988 and 2002, the leading 20 pharmaceutical companies forged 2623 biotechalliances:
• Pfizer had 246 deals, of which 68% were for early-stage research. GlaxoSmithKlineranked second, with 201 deals, 56% of which were for early-stage work; 59% of the198 alliances that Roche signed were early-stage deals.
• The vast majority of deals—72% during the 15-year period—had a therapeutic focus. Amere 3% focused on diagnostics, 12% centered on drug delivery, and the remaining13% were outlicensing deals.
• Deals emphasized screening and genomics technologies; recombinant DNA-basedalliances declined over time, reflecting the impact of scientific breakthroughs.
Foreign pharmaceutical companies have recently increased their strategicinvestments in Japanese companies, even though the Japanese market is significantlysmaller and has been growing more slowly than the U.S. and European markets have.However, the rising involvement of foreign pharmaceutical companies in Japan—thesecompanies’ market share increased from 12% to 16% between 1996 and 2002—indicatesan expectation of greater market growth in Japan as a result of the country’s agingpopulation (a significantly greater shift than is under way in either the United States orEurope).
Indications are that the biotechnology industry is at a point of maturation, with theindustry’s product pipeline, revenue base, and partnership funding positioning the sectorfor future growth. The prospect for greater intra-industry consolidation is also strong andwill further bolster the research and development activities of companies in the field. Themost significant deal in the biotechnology sector to date is the $6.4 billion all-sharemerger between Biogen and Idec Pharmaceuticals in 2003. This merger is the second-largest intra-industry deal, after Amgen’s $10 billion acquisition of Immunex in 2001.
DynamicsThe most important harbinger of change within the pharmaceutical industry today is therole of science and technology in product R&D. The Human Genome Project is alandmark event in science and the leading catalyst of change both in scientific researchand in product development. The elucidation of the role of genes in disease will not onlyenhance understanding of disease processes but also lead to improved diagnostics, newdrugs that directly affect gene expression, and new methods of monitoring therapeuticeffectiveness by measuring changes in gene expression. This scientific transformationwill also require significant changes in learning and training (and likely result in greateruse of eLearning) at each stage of the pharmaceutical industry’s value chain (seeeLearning along the Value Chain).
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But while companies try to reorganize themselves around emerging technologies andresearch fields and to find new, more effective ways of doing research, the riskssurrounding new-product development and the cost of developing a drug keep increasing.Today, developing a new drug typically takes 10 to 15 years and costs some$800 million. Adding to the pressure on drug companies is regulatory agencies’ lowertolerance for inefficacious and unsafe drugs. Building better information andcommunication infrastructures—to reengineer research and clinical investigationsystems, for example—may be necessary to combine data about large-scale populationswith more fundamental research activities. Such a network infrastructure would alsoenable more advanced and effective eLearning, in part by allowing greater use of richmedia and more real-time collaboration and interactivity and by enabling the use of newtools for collaboration and informal learning.
An executive in a large information-technology (IT) company recently made threeobservations about the pharmaceutical industry’s research and development activities:
• The pharmaceutical industry is an emerging industry in terms of industrialization ofprocesses.
• It is inefficient, spending more than 30% of revenues on R&D.
• Interdisciplinary collaboration is lacking in product discovery and development, withno integrated product-development teams such as those in the auto industry.
Given that other industries are ahead of the pharmaceutical industry in adopting newtechnologies and processes, pharmaceutical companies that want to reengineer internalprocesses may be able to learn from these leaders’ best practices.
Regulatory requirements are a major aspect of the pharmaceutical industry,particularly as research productivity and speed to market become key business-performance goals. Companies need to be able to prove at any time that they havefollowed compliance regulations and met certain requirements, as well as achievedefficient development-testing and production practices. Compliance requirements aretherefore a major driver of the amount of resources and attention companies expend inthe training market. Making a business case for compliance training is not difficult in thepharmaceutical industry because good compliance practices reduce risks in productdevelopment and improve business performance via market approvals and revenue.Compliance-based eLearning—enabling cost-effective delivery and tracking of learningof standard operating procedures (SOPs)—will therefore likely see steady growth.
More effective training through the use of technology can also enhance themanufacturing operations of biotechnology and pharmaceutical companies. Somebiotechnology companies are developing simulation-based eLearning modules toimprove the yields of their drug-production processes. Even marginal improvements inyield can bring dramatic revenue gains. If current pilots are successful, use of simulation-based eLearning products will likely shoot up in the biotechnology and pharmaceuticalsectors of the life-sciences industry. Medical-device companies have already discoveredthe benefits of using simulation-based eLearning for new-product training, for example.
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The foundations of the pharmaceutical industry are intellectual capital and humanresources, so finding, attracting, developing, and retaining talent are key priorities.However, in late October 2003, in response to poor financial performance (see the boxjust below), Merck announced that it will lay off more than 4000 people. This action maysignal significant changes in the industry—unless companies can reverse recent business-performance trajectories.
Because of growing cost pressures and changing research structures, the industry’sworkforce is multidisciplinary and widely distributed geographically. Thesecharacteristics complicate efforts to achieve effective organizational management and theexchange of knowledge that is critical for successful product development, management,and production.
PAINFUL REPORTS FROM DRUG COMPANIES
A recent Wall Street Journal article (23 October 2003) reported on woes in the pharmaceutical industry:
Merck & Co., in a dramatic reflection of the pharmaceutical industry’s profit woes, said it will fall
short of 2003 earning targets, and announced plans to lay off 4,400 workers in the face of lower-than-
expected sales of some big drugs.
At the same time, Wyeth reported a third-quarter loss after setting aside $2 Billion more to cover
already sky-high claims of heart damage from diet drugs that came off the market in 1997.
The news came amid a flurry of third-quarter earning reports from six major drug makers that offered
a sobering checkup on the pharmaceuticals sector’s flagging health. Almost every drug company is
beset with expiring patents for major products and a shortfall in new blockbusters. Competition from
generics and a recent wave of over-the-counter versions of some prescription drugs are intensifying
the pain at several companies.
Pfizer Inc. and GlaxoSmithKline PLC posted stronger results than their rivals, but they continue to
cut costs in the wake of megamergers that may buy them time until a new crop of blockbusters
emerges. Eli Lilly & Co. said net income rose 4.5%.
The industry has begun to pay more attention to customer education, focusing oncommunities of learners along the industry value chain, from employees and strategicpartners to medical doctors, practitioners, and even patients. With companies pursuingsales growth to compensate for sagging productivity (a drop in the number of new drugsentering the marketplace), the number of pharmaceutical sales representatives has morethan doubled in the past five years (see Table 2). Given the primary emphasis on revenuegrowth, education through the extended enterprise of sales representatives,intermediaries, and patient communities is an important enabler of future revenue growth.
In the United States, where the U.S. Centers for Disease Control and Preventionestimates that some 90 million people have chronic conditions—of which cardiovasculardisease accounts for two-thirds of the total—devices such as personal health assistants
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and electronic health diaries are gaining popularity (see the box just below). Such devicesgive patients access to relevant and timely information resources that guide decisions andactions at the time of need and push appropriate information to patients to encouragethem to manage their own health. According to the Center for Studying Health SystemChange, the total revenue of specialty-disease–management firms in the United Statesrose from $85 million in 1997 to $600 million in 2002.
Table 2PHARMACEUTICAL SALES REPRESENTATIVES IN THE UNITED STATES
YearNumber of SalesRepresentatives
Numer of Office-BasedPhysicians
Number of Physicians perRepresentative
1996 41 855 368 000 8.8
1997 53 815 376 000 7.0
1998 63 152 383 000 6.1
1999 70 520 391 000 5.5
2000 83 051 406 000 4.9
2001 87 892 414 000 4.7
Source: Scott-Levin
CONSUMER ATTITUDES TOWARD PERSONAL ELECTRONICHEALTH DEVICES
A recent study by Accenture of electronic devices for health monitoring found that U.S. consumers believe that
they are proactive in managing their health, are comfortable with emerging medical technologies, and are willing
to contribute financially to the cost of providing monitoring services. (Accenture selected a sample of 40 000 U.S.
consumers randomly from a database of more than 1 million people, and 4313 of these people completed
Accenture’s survey online.)
• The majority of consumers (80%) actively manage their personal health.
• An even larger number (90%) search the Internet for health-related information.
• More than half (60%) of respondents would use an electronic diary if they had a chronic condition.
• More than 50% of consumers do some monitoring of their general health.
• Approximately 23% of consumers currently monitor a chronic condition.
• Some 30% of consumers monitor the health of a family member or friend.
• Many people would pay a nominal fee for a telehealth service ($10) or subscription ($20).
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Finally, the drug industry in general faces a growing competitive threat from genericpharmaceutical companies in India—and possible future threats from pharmaceuticalcompanies in other developing countries. However, the threat is not so much from Indianfirms’ selling cheaper generic versions or copies of patented medicines for leadinginfectious diseases in local markets or competition from these companies in the regulatedgeneric markets of Europe and North America. The greater threat is these companies’decision to become research-based and discovery-led pharmaceutical companies in theirown right. A case in point is the entry of Dr. Reddy’s Laboratories into the brandedgeneric market by legally challenging market protection of prescription drugs on thegrounds that the branded generic product is a different formulation of a patented drug,albeit with the same active ingredient. Dr. Reddy’s recently won a challenge against apatent-protected Pfizer drug, Norvasc, that accounts for $3.8 billion of Pfizer’s annualsales.
The Dr. Reddy’s example highlights the shift in strategy by many Indian drugcompanies as they seek to compete with large, established pharmaceutical companies:The Indian companies are moving away from cheap knock-off generic products forlower-tier markets toward higher-value-added product variations or in-house drug-discovery efforts that help them gain a foothold in the more lucrative markets of NorthAmerica and Europe. With World Trade Organization membership for India looming in2005, Indian pharmaceutical companies are likely to continue to place unrelenting legalpressure on industry leaders by challenging existing patents while pursuing innovation-driven, in-house research.
Learning and Knowledge ImplicationsThe life-sciences industry is already highly knowledge intensive and becoming evenmore so as a result of the dramatic scientific breakthroughs, especially in genomics andproteomics, that are beginning to change the pharmaceutical industry’s discovery anddevelopment processes. The transformation of the industry is now in its early phase andwill take years; in the meantime, the industry faces a number of other significantchallenges with implications for knowledge processes and learning, and specifically foreLearning:
• More cost-effective eLearning in place of traditional, costly training methods. Even ifpharmaceutical companies manage to improve their financial performance, othercompetitive factors are likely to maintain the pressure for cost cutting and fordevelopment of improved, more cost-effective processes. As many companies haveshown in recent years, well-designed, effectively implemented eLearning programs canachieve significant cost savings. Companies that already have learning-managementsystems in place and have a great deal of digital content for use in formal and informallearning programs will be able to achieve significant savings by shifting more of theirlearning programs to eLearning.
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• Extension of learning to the distributed workforce at low cost. A large share of trainingcosts in the pharmaceutical industry are in the sales and marketing area: Companiesneed to bring sales representatives up to speed on new products so they can accuratelyand eloquently discuss the products with medical professionals. Even if the number ofsales representatives levels off, or even declines, as companies align their coststructures with the new market realities, the knowledge and learning requirements forsales personnel will likely continue to increase. Although some training may alwayshave to be face-to-face in traditional classrooms, sales representatives can learn a greatdeal of product information effectively via eLearning—especially through rich-mediacontent that companies deliver in an engaging way through laptops or even personaldigital assistants. As a growing number of professional workers obtain broadbandaccess in their homes, many sales and marketing people will also likely want to accessonline learning materials in this way.
• Greater sophistication of customer learning programs. As competitive pressurescontinue to mount in the industry, and as consumers become more sophisticated andmore demanding and seek to play a more active role in managing their health,companies will need to respond with higher-quality learning content that meets theneeds of their increasingly diverse customer base. As U.S. and European life-sciencescompanies also make a greater effort to penetrate markets in which they have so farplayed minor roles—such as Japan and China—they will need new educationalprograms to build customer loyalty and win customers from local incumbents. Asbroadband spreads rapidly in Japan (the number of ADSL subscribers in Japan rosefrom near zero in early 2001 to nearly 10 million in late 2003), new opportunities willemerge for innovative use of rich-media educational campaigns and use of eLearning tobuild customer loyalty and improve the “top line,” moving beyond cost-saving reasons.
Despite the potential of online continuing medical education (CME) to enhance theprofessional education of physicians, reports indicate that the approach remains largelyunderdeveloped and underused. U.S. physicians obtained only 4.4% of CME credits in2001 online, according to the Accreditation Council for Continuing Medical Education.One reason for this low use is reportedly the lack of engaging online CME material, butas CME becomes more content specific and as use of broadband opens the door to moredynamic content, more physicians are likely to move online. Among other education-oriented initiatives in the industry is the Drug Information Association’s Web-basedcontinuing-professional-development education for pharmaceutical-industryprofessionals.
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KEY eLEARNING AND KNOWLEDGE ISSUES
eLearning along the Value ChainIn contrast to traditional, classroom-based training, eLearning allows learning andtraining processes to scale cost-effectively and thus reach large numbers of learners whilereducing unit cost. This advantage derives from the scalability of digital content and useof the Internet, which is the ultimate infrastructure to deliver various forms of content,increasingly in rich-media formats as well as in the form of static data and information.This situation—along with dramatic growth in the number of players in the value chain ofthe pharmaceutical industry and the growing complexity of associated processes—pavesthe way for eLearning to play an important role in the knowledge and learning processesthat are at the core of the industry.
A Growing Web of Collaborative PartnershipsNot only are drug development and commercialization lengthy and costly processes, buta growing share of drugs that reach the market now require participation by a complexweb of partners. Many of these players come from various parts of the internal valuechain—representing research and development, commercialization-oriented groups,technical operations, and support functions—but a large number of external players orentities also influence the value chain in varying degrees (see Figure 3).
Intensifying competition requires companies to obtain the highest expertise andnecessary core competencies wherever they can find them—inside or outside companywalls and anywhere in the world. This approach requires sophisticated coordination andcollaboration, as well as large, multidisciplinary teams that span the value chain—oftentaking the form of communities of practice. How well partners work together candetermine success or failure in obtaining government approval for a new drug andachieving commercial success.
Smart use of technology is a key success factor in this environment—for all playersin the life-sciences industry but perhaps particularly for pharmaceutical companiesbecause of the long duration of drug-development processes and the very large expenses.Some companies use collaborative platforms to enable members of CoPs to work closelytogether, share knowledge, and learn together—in both formal and informal ways.However, some observers believe that the life-sciences industry still has much to learnfrom other industries’ success with close and effective collaboration. The automotiveindustry is one role model in this area, but a number of high-technology companies havealso made effective use of e-communities and virtual teams to educate customers, buildcustomer loyalty, and educate a large and highly distributed sales force. Cisco’s bestpractices on these fronts are likely to be of great interest to pharmaceutical companiestrying to improve their e-community and virtual-team operations.
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Figure 3PHARMACEUTICAL-INDUSTRY VALUE CHAIN
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Design of a Learning ArchitectureTo obtain the full benefit of eLearning, companies must think far beyond the use ofcourses for internal use. Integration of eLearning, knowledge management, andenterprise-content management is important because these areas all deal with digitalknowledge content and should not be separate and distinct domains (see LoD Bulletin,Third Quarter 2003). The companies in the case studies later in this report are startingdown the road toward integration and are seeking greater “multiuse” of digital content forformal and informal learning activities. Several companies view this multiuse or“multichanneling” of content as part of the extended enterprise—for both customer andpartner learning.
Many other companies have not yet taken significant steps toward integration, even ifthe managers of their eLearning or knowledge-management programs recognize thebenefits of doing so and want to move in this direction. But the learning architectures thatcompanies are starting to put together—blueprints (with varying degrees of detail) ofplans and relationships between learning and knowledge activities and supporting toolsand technologies—will help them explore new ways to integrate eLearning, KM, andenterprise-content management.
Many pharmaceutical companies already outsource some noncore activities that theybelieve specialists—in R&D, clinical services, or manufacturing—can do more cost-effectively than they can. Many companies, both in the life sciences and in otherindustries, are now considering outsourcing training and learning services, especiallybecause a growing number of companies (including IBM, Accenture, Convergys, ACS,EDS, RWD, General Physics, and Raytheon) now offer a range of outsourcing servicesand have a growing number of reference cases to use as “proof of concept.” As learningarchitectures emerge, companies need to examine carefully the implications ofoutsourcing some, or major, parts of their training and learning functions. They need tolook at both the short-term impacts and the longer-term consequences of outsourcingthroughout the value chain, because learning and knowledge processes directly orindirectly affect the workings within and among the parts of the value chain.
Growth of Electronic CollaborationExtensive and intensive collaboration is at the core of the pharmaceutical business, socompanies that aren’t able to collaborate effectively will suffer competitively. For thisreason, technologies and tools that support collaboration are becoming key parts of thelearning architectures of most pharmaceutical companies.
A Collaboration PrimerAs collaboration has become an integral part of the workplace, many tools andtechnologies, increasingly Web-based ones, have entered the marketplace. Examplesinclude distributed-project-management tools (including those from companies likeeProject and OnProject), virtual-team tools (such as eRoom from Documentum,TeamCenter from Inovie, Lotus Notes from Lotus, and Livelink from OpenText), processand work-flow tools (from companies like Filenet, Adobe, and Staffware), and tools forcollaborative document and content management (from Documentum and Smart
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Solutions). The marketplace is crowded with hundreds of stand-alone tools but also sometools that integrate into other tools and application platforms (eRooms, for example, hasincreasingly close integration with Documentum’s content-management system). Figure4 shows the collaborative functionalities that these tools and technologies offer.
Figure 4FUNCTIONS IN COLLABORATION-SUPPORT SOLUTIONS
Source: Fraunhofer Institute
• Document Repository
• Whiteboard
• Joint Viewing and Editing
• Meeting/Decision Support
• Member Images
• Team/Project Mission
• Glossary and Definitions
• Group Calendar
• Task List
• Work Flows
• Charts (Costs, Resources,and So On)
• Discussion Forum
• Text Chat
• Voice Chat
• Audio and Video Conferences
• Availability Display
• Activity Display
• Notification of Change• Authentication
• Encryption
• Certificates
In general, such tools support the following objectives:
• Social translucence and awareness. Who is currently working on what projects? Whois available for communication?
• Communication. Chat capability and instant messaging (IM) have growing appeal inthe business world. In many high-tech companies in particular, IM is the killerapplication in communication, although e-mail is the most commonly used tool forcommunication and collaboration.
• Coordination. Group-calendaring and work-flow–management tools—with increasingintegration with document-management systems, for instance—are seeing growing use.
• Collaboration work tasks. Team members can jointly create a document, or a team ofwidely distributed designers can collaborate on a computer-aided–design model.
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• Team identity and common ground. Displaying pictures of and information about teammembers can help build familiarity, reduce “remoteness,” and alleviate feelings ofisolation. Icohere (Walnut Creek, California) uses this function effectively in itscollaboration platform. A live video feed can also play this role, as in a recent meetingof the eLearning Forum, where a number of participants indicated that viewing a videofeed of the proceedings lessened their sense of remoteness and isolation.
• Security. User authentication through password or data encryption is important forcorporate collaboration work, and most vendors of collaboration products for thepharmaceutical industry highlight the strong security features of their products.
Figure 5 shows the range of choices that users will confront when they attempt toselect a tool and technology. Although many products on the market are relativelynarrowly focused point solutions, a growing number of technology platforms in the futurewill integrate many functionalities and serve a range of needs of collaborative teams.
Figure 5DIMENSIONS FOR DISTINGUISHING COLLABORATION-SUPPORT SYSTEMS
Targeted Users
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Security Mechanisms
Source: Fraunhofer Institute
TeamsOrganizations/
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Selected Developments and a Look at the FutureA number of the life-sciences companies we have interviewed for this report say that theyare trying to standardize around a smaller number of tools and technologies than in thepast in all areas of eLearning. This objective holds for enterprise software applications ingeneral, as corporate IT groups try to reduce support costs and streamline procurement ofsoftware applications to gain economies of scale. Their goals are better communication,coordination, and collaboration across the organization, with tighter integration of fewersystems.
Collaborative tools will also increasingly integrate with and become integral parts ofother key enterprise applications. A number of the largest pharmaceutical companies useboth the Documentum content-management system and Documentum’s eRoom platform,which are more tightly integrated than they used to be. As long as the price/performanceratio of eRoom is reasonably close to that of its major competitors, Documentum’sfoothold in the life-sciences industry (where it has more than 200 clients) will give it asignificant competitive advantage. Some of the pharmaceutical companies we talked toare indeed considering switching to eRoom and standardizing on this technology.
Another software company that has clearly recognized the importance ofcollaboration is Microsoft. The most recent release of the company’s Office suite has astrong focus on teams and collaboration and makes clear that the company wants to be aviable alternative to all the other “best-of-breed” solutions on the market. A look atMicrosoft’s current product offering and the projects it has brewing in its laboratoriesreveals that the company covers all the major phases of collaboration in Figure 6:
• Microsoft Office (MSO) suite. The latest upgrade of Microsoft Office, which has some400 million users worldwide, has the following pieces: Office Sharepoint Portal Server,which allows workers to set up internal sites for coordinating group projects; OfficeLive Communications Server, which is IM software for corporations, with security andarchiving; Office Live Meeting, which allows workers to launch impromptu Web-collaboration conferences from the Outlook mail program; and Office Infopath, whichreplaces paper documents with electronic forms that are easy to share, store, and find.
• Microsoft XP. The product has improved document coauthoring and review featuresand integrates IM and e-mail functionality through its Outlook component.
• Microsoft’s Web conference. The company’s acquisition of Placeware, one of the majorWeb-conferencing products on the market, has given Microsoft strong Web-conferencing functionality. But the market is crowded, with WebEx, Interwise, and anumber of other products vying for customers. A more recent new entrant that hasreceived a warm reception in the market is Macromedia’s Breeze, which enables usersto create and deploy rich-media interactive applications, including video on demand,broadcasts of live events, and collaboration tools.
• Microsoft’s collaboration with the Groove Network. Microsoft has taken a 30% equityinterest in Groove and has integrated the product into Outlook 2003. In this way,Microsoft has extended e-mail—the simplest and most commonly used collaborationtool—into collaborative work spaces.
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Figure 6PHASES OF PROJECT WORK AND PRIMARY COLLABORATION SUPPORT
Establishing Contact;Communicating
Preparing forand CoordinatingWork Phases
Meetings
Seminars
Presentationof Productsand Results
Source: Fraunhofer Institute
E-Mail andInstant Messaging
Groupware
• Groove
• Lotus Notes
Web Conferencing
• WebEx
• Placeware
• Breeze
Centralization of Learning and Training Administration-ManagementSystems
Today, all organizations are seeking new cost efficiencies and more effective ways ofoperating existing systems. Not surprisingly, these efforts are now also affectinglearning- and knowledge-based systems. But emerging changes in companies’ eLearningoperations also reflect the fact that organizations are becoming more mature andsophisticated users of eLearning.
Centralized Learning- and Training-Management SystemsIn the past, individual business units, divisions, or departments sponsored andadministered eLearning activities within life-sciences companies. Many of these unitsacted quite independently, implementing their own learning-system infrastructures andcreating their own policies and procedures for enrollment and delivery of learning(classroom and online programs). The result was considerable redundancy of tools,systems, and policies across enterprises. (Of course, this situation is not unique to life-sciences companies; our research for eLearning in Financial Services: A Case-BasedAnalysis found similar situations in large banks, for instance.)
Though independent units continue to manage their own requirements and budgets,in the past two years, several of the life-sciences companies we interviewed have movedto, or plan to move to, greater centralization and common use of learning-systemfunctions such as learning management and training administration—to reduceredundancies and improve operating efficiencies.
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Most interviewees report that their companies have appointed a central task force orcouncil (a cross-functional project team) to oversee the deployment of central learning-management systems for use by multiple business units and departments. In addition tocentralizing basic training and learning administration (classroom training, onlinetraining, virtual-classroom training, and internal and third-party content delivery), manylife-sciences companies are beginning to expand to the next level of sophistication:competency-based learning and learning and performance analytics.
Competency-Based LearningThough the first implementations of learning systems did not incorporate competency-based learning and development planning, many organizations are graduating, or about tograduate, to the use of competency definitions in creating individualized curricula.Linking job-specific competencies and eLearning course content will make eLearningprograms more relevant and useful for learners and should therefore also make theseprograms more attractive—in turn increasing learners’ motivation and their participationin and completion of eLearning courses. In some organizations, eLearning teams areleading the way in competency modeling, prompting human-resources departments totake notice and consider leveraging the competency definitions for talent selection andcareer development.
Under the leadership of Ed Nathan (chair of Wyeth Pharmaceutical Global AdvisoryCouncil on Training and Development), Wyeth has implemented a global competency-based learning approach and curriculum for sales representatives, sales managers,trainers, and marketing staff with the help of firms like Forum corporation and DDI. EdNathan stresses that the most significant outcome of using a competency-driven approachis the tools that an organization can derive from the approach, such as assessment tools,personal-development plans and curricula, interview and hiring guides, job descriptions,and career-development processes. With a competency-based learning approach, learningcan be more personalized, taking its cue from gap analysis, and be more objective and intune with organizational goals.
Despite such benefits, developing a global competency-based program is challenging.Few internal training departments are conversant with this approach or withmethodologies for creating scalable competency models.
Use of AnalyticsFor many years, training organizations have sought to evaluate, measure, and assess theeffectiveness of training programs. However, few evaluation models have gone beyondthe first two levels of the training-evaluation system that Donald Kirkpatrick developedin 1979. At level 1, trainers solicit learners’ reactions through surveys, and at level 2,they evaluate posttest scores. To meet the growing need to determine the effectiveness—and, ideally, the return on investment—of learning and training programs, LMScompanies like Docent and Saba have introduced analytics modules in their LMS suitesin the past year. These product innovations have raised users’ hopes that they will be ableto move beyond levels 1 and 2 of Kirkpatrick’s model to level 3 (determiningperformance impact) and level 4 (determining business impact).
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The new analytics modules of Docent and Saba are promising, but they are too newfor anyone to know how well they will work. So far, very few companies haveimplemented and tested the products—and, as far as we know, no life-sciencescompanies have yet implemented these LMS analytics modules. Cautious optimism istherefore in order, for the following reasons:
• Limited analytical power. The current versions of the analytics modules are highlycorrelation focused, relying heavily on data-mining techniques and correlating varioustraining statistics and business metrics. The products do not yet offer high-poweredregression analytical techniques.
• Uneven quality of data. As with any business analytical techniques, the results are onlyas good as the data under analysis. The familiar mantra “garbage in, garbage out”certainly applies here. However, growing use and extension of LMSs to enterprisewidelearning and training operations will help organizations collect good data that yieldmeaningful results, even if only at a level of correlation rather than one of determiningcausal relationships through sophisticated statistical analysis.
Use of Learning-Management Functions with ERP SuitesAlthough the addition of a learning-management function to enterprise-resource–planning application suites such as SAP, PeopleSoft, and Oracle is an importantdevelopment in the eLearning industry (see the Learning-on-Demand [LoD] Programreport Enterprise-Application Vendors in the eLearning Marketplace), thepharmaceutical companies we interviewed for this report are not using the LMS functionwithin their enterprise applications.
However, the lack of penetration by large enterprise-application vendors’ LMSswithin the pharmaceutical industry in no way indicates the future directions of learning-system implementations. The influence of established EA players is significant, and ourresearch shows that many companies plan to continue to evaluate, from time to time,whether an EA-based LMS might be appropriate. Companies that run ERP systems fromthese EA companies are particularly likely to revisit the issue.
On the demand side of the LMS decision, the LoD report on EA vendors presents thefollowing conclusions:
• eLearning is moving to the enterprise, and this development favors EA players,especially those that have strong “C-level” relationships that they can leverage duringpurchase decisions.
• Human-resources and IT groups are playing a greater role in LMS purchase decisionsthan in the past, and these departments often favor familiar enterprise-/HR-systemvendors.
• A growing need exists for enterprise-application integration. For analytics modules towork effectively, for instance, these modules and the LMS must connect to ERPsystems to obtain the data they need.
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• The opportunity to reduce the total cost of ownership is attractive for many adopters.When both the LMS and ERP come from the same vendor, life-cycle costs should drop.Because these costs are often a major part of overall eLearning-maintenance costs, thisfactor favors the EA companies.
Convergence of Learning and Enterprise Content-ManagementSystems
The pharmaceutical industry has considerable experience with enterprise content- anddocument-management systems. But the growing volume of digital content (from avariety of internal and external sources), including expanding catalogs of eLearningcourses, is prompting some organizations to consider consolidating content-managementsystems to provide a common foundation and allow sharing of objects in document,learning, and Web content.
However, consolidation of different content types poses challenges: Thoughdocument- and Web-content–management systems and learning-content–managementsystems (LCMSs) share certain attributes (such as collaborative access, version control,and work flows), the content types, structures, and rendering remain distinct. Forexample, functionality such as aggregation of learning objects into personalized courses,interactivity, assessment, and SCORM- (sharable content object-reference model–) basedpackaging and tracking are missing from document- and Web-content–managementsystems.
Two key developments are supporting organizations’ efforts to consolidate content-management systems:
• A growing need for content repositories. Internal content development is on the rise,and companies need ways to manage source and published content in a contentrepository such as an LCMS.
• Growing embrace of learning objects and standards. In the United States and othercountries, companies are adopting learning objects and eLearning technology standardssuch as SCORM. (See the LoD report Learning Objects: Key Issues for FutureGrowth.)
So far, however, relatively few pharmaceutical companies have implementedLCMSs, and no companies (as far as we know) have completed enterprisewide LCMSdeployments or fully integrated their LCMSs with knowledge-management systems(document and Web-content management). Nevertheless, several organizations areactively discussing the following steps:
• Leveraging content in document- and Web-content–management systems withinlearning content or courses
• Linking learning content with work flows and work spaces or portals
• Using eLearning standards and learning objects and pursuing multimode, multipurposecontent development.
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Expansion of Internal Content CreationThe growing availability of easy-to-use authoring tools to create eLearning content hasprompted life-sciences companies to expand their internal content-creation efforts. Mostlarge pharmaceutical companies have 50 to 100 or more internal instructional designerson staff, including many subject-matter experts, so they have strong, and growing,content-creation capabilities. Some companies report that internal content-creationinitiatives have enabled more than $1 million in annualized cost savings.
Along with increased internal content creation comes the need to create policies andguidelines for technical standards, corporate branding, and best practices in instructionaldesign. Most organizations we interviewed said that they use Internet and corporateintranet Web sites to provide best practices, templates, guidelines, and access toinstructional designers and subject-matter experts. Particularly as new tools for easy-to-use Web-site content editing become available—such as Macromedia’s Contribute—current versions of a variety of resource documents for eLearning will be availableonline, either at internal or at external Web sites.
Learning Objects and Multimode DeliveryLearning objects offer a number of benefits to pharmaceutical companies (as they do tocompanies in other industries), so their use is increasing and will likely continue to gainprominence in the next few years—perhaps accelerating significantly as companies gainexperience and share best-practice information. One of the key benefits of learningobjects is the ability to reuse content (at a modular level, such as course modules andmedia assets) across the value chain. Sales, marketing, and other functional groups cansave significant time and cost by reusing content objects. (Some of the eLearning-contentdevelopers we talked to—see CONTENT-DEVELOPMENT PERSPECTIVES—alsoreport significant cost benefits of embracing an object-based content methodology.) Forexample, content assets from product literature and brochures that marketing groups havecreated can find reuse in product training for sales groups. And sales-training content canfind use in customer education and continuing medical education.
Multimode delivery of content and information relates to the topic of learningobjects. With multimode delivery, organizations can create content once and deliver it formultiple modes and purposes (such as printed workbooks, CD-ROMs, and Web-basedlearning). Learning objects and multimode delivery of content require common contentunderpinnings. For example, content must be separate from its presentation to enablepublication in different modes. Indexing (through taxonomies) and tagging of content arenecessary to enable searches at a lower granularity than course topics. Leveragingcommon content repositories and infrastructure to promote the use and reuse of contentacross the pharmaceutical value chain is clearly the next frontier in pharmaceuticaleLearning and knowledge-management practice.
Growth of Mobile Productivity and m-LearningUse of mobile-learning technology is growing within the pharmaceutical and health-careindustries, especially as a way to enable sales representatives to make the most of theirmeetings with physicians and to use technology to improve their relationships with
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medical professionals. Pharmaceutical sales forces need to serve highly dispersedcustomer sites (because of highly dispersed locations of caregivers and patients). Inaddition, communications between team members and between sales representatives andtheir corporate offices remain weak. Because of broad and often complex product linesand frequently changing product information, an important need exists to distribute theright knowledge at the right time.
These and a number of other factors mean that portable devices, especially those withwireless communication capabilities, hold significant potential for sales representatives ofpharmaceuticals and other life-sciences companies. And because the cost of hiring andtraining sales staff is also very high, using portable devices for on-demand, away-from-classroom learning is attractive to the life-sciences industry. Yet, partly because of theconservative corporate culture in most pharmaceutical companies and perhaps partlybecause of the relatively nascent state of the portable-device industry (at least in the areaof sophisticated and wireless devices), few deployments of these devices have yet takenplace.
The number of mobile-device types and form factors is already high and willcontinue to grow as vendors come up with new products and capabilities. This situation,along with falling prices, complicates purchasers’ decision making. Important decisionfactors include the type of content and information the organization wants to deliver andcompatibility with the back-end IT infrastructure and enterprise-application support.
Portable-Device Platforms
• Cellular/mobile phones. In mobile phones, voice is the primary mode ofcommunication. But most cell phones can deliver text-based messages, and somemodels can even transmit and display graphics and pictures. But these devices have lowdata bandwidth and have limited storage capacity for content/data. Uses in learninginclude voiced-based training registration and scheduling, reminders andannouncements, and voice-response–based information retrieval. Poor wireless-network coverage in certain locations is a potential constraint, but improving networks,and even emerging broadband, will open new possibilities, especially as new devicesenable clearer display of content.
• Personal digital assistants. The latest models of PDAs (for example, Palm andPocketPC devices) provide impressive computing/processing power in a small formfactor (the devices slip into a pocket), high-resolution graphics (multimedia),handwriting recognition, point-and-click pen interfaces, and access to office-productivity applications. The devices can find use in learning applications such aselectronic books, short courses on product knowledge, references, and job aids. Anumber of hybrid PDAs are available that combine additional hardware devices andfunctions such as cameras, cell phones, bar-code readers, and GPS (global positioningsystem) receivers. For learning, hybrid PDAs can provide performance support, voice-based information lookup, and on-the-field job input and capture of data and media.GPS receivers are useful for collecting location- and map-based information and forreporting certain events taking place.
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• Tablet PCs. One of the latest and most sophisticated forms of mobile devices is theTablet PC. It is relatively lightweight (3 to 4 pounds) but is still a full-powered personalcomputer with advanced handwriting-recognition and voice-recognition features thatwill continue to evolve during the next few years. Tablet PCs could deliver onlinecourses (because of their large-screen and high-resolution form factor), capture richdata, and manipulate images such as illustrations, maps, and schematics. In addition,Tablet PCs may find use for collaboration, brainstorming, advanced interactivesimulations, and note taking.
• Mobile MP3 players. MP3 is the most widely used file format for music and audiocontent. MP3 players can download content and play it while users are walking,traveling, or driving. Many models hold vast amounts of audio content and thus havepotential in learning applications, including audio tutorials, books, and lectures. Manycompanies, including life-sciences companies, are likely to offer their sales staffs MP3players on which they can play audio clips from the company CEO, other corporatecommunications, information about new products, and other applications.
• Mobile DVD players. Mobile DVD players are portable, yet they can play a full-scale,full-motion video. Their uses in learning include portable and interactive video-basedlearning, simulations, and instructional digital videos. They represent a moreeconomical and more portable alternative to laptop computers and enable salesrepresentatives to simulate the operation of or practice using medical devices or toshow interviews with key opinion leaders to a physician during a brief meeting.
m-Learning and Productivity Applications in the Life-Sciences IndustryBelow are some of the mobile applications that life-sciences companies are piloting orconsidering.
• Automation of sample management. Pharmaceutical sales representatives need todispense drug samples to doctors, so mobile sample-management solutions withelectronic/digital signature capture provide many benefits. Automatic samplemanagement reduces data entry, allows representatives to spend more time withphysicians, improves compliance, and streamlines the creation of management reports
• Tablet PC–based sales presentations. A Tablet PC provides an extremely portable yetfull-screen multimedia display for showing product demos and support information tophysicians
• PDA-based mobile-learning support. PDAs can present small snippets of content,including product knowledge, sales strategies, and marketing messages. And salesrepresentatives can download reference guides and product data sheets on their PDAs.
• Automation of clinical-trial administration. PDAs and Tablet PCs can provide trainingand support information to clinical investigators to improve data gathering andfacilitate regulatory compliance.
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• Connectivity with centralized customer-relationship–management (CRM) systems.With links to CRM systems, mobile sales forces could obtain up-to-date informationabout schedules and contact information, for instance.
• Performance management and metrics. Mobile information systems can help gatherand report data such as the number of physicians a sales representative visits, callduration, satisfaction, and market share.
CASE STUDIES
The four case studies that follow illustrate varying levels of eLearning adoption anddegrees of maturity and sophistication in eLearning, KM, and enterprise contentmanagement. The resulting picture reflects well the situation in the life-sciences industryoverall. Some of the companies we feature in this report are very large, globalorganizations with wide-ranging learning and knowledge activities, so our descriptionsdo not cover all their eLearning operations. Nevertheless, the case studies provide arepresentative picture of these companies’ current activities and future plans.
Bristol-Myers SquibbBristol-Myers Squibb is one of the main pharmaceutical players in the world, although itis significantly smaller than the largest players in sales, profits, and market capitalization.The company has also been through a difficult five years or so, with a 55% averageannual drop in its profitability between 1999 and 2003 (see Table 1). However, in thirdquarter 2003, the company saw a near doubling of its net profits since the same period in2002 (to $884 million) and surprised many analysts, given that a number of key industryplayers reported weak financial performance during that period (see the box on page 11).
Despite BMS’s recent financial and management challenges, senior management hasmaintained its commitment to strengthening learning and knowledge processes. Thecompany is today one of the leading practitioners and thought leaders in the use oftechnology to build a real-time knowledge enterprise. It is farther along than most of itscounterparts in the life-sciences industry in adopting a broad-based, strategic perspectiveon technology-based learning.
Company Background and Industry ContextBMS is a global pharmaceutical enterprise with the following major business units:Medicines (by far the largest unit), Mead-Johnson Nutritionals, Convatec Ostomy andWound Care, and Medical Imaging. The company operates in more than 500 locations inmore than 50 countries and has 43 000 employees. BMS’s global presence includes R&Dfacilities in three U.S. locations and in Belgium, Canada, France, Italy, and the UnitedKingdom. The company’s far-flung operations pose challenges in designing eLearningprocesses, requiring attention to the different technology infrastructures in different parts
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of the world, differing cultural issues (see the LoD report eLearning and Culture), andthe need to localize content appropriately. The company must also meet varying andincreasingly stringent regulatory requirements for drug approvals in several countries.
As Table 1 shows, the company’s financial performance has been poor in recentyears and has also lagged that of most of its competitors, and the result has been weakmarket capitalization as market analysts and investors show disappointment in thecompany’s results. However, with the recent strong quarterly financial results and if newdrug approvals by the U.S. Food and Drug Administration meet company expectationsand forecasts (which they have not done in the past), BMS could produce much morerespectable results. Like many of its competitors, the company faces a slimmer drugpipeline (although licensing new drugs from other companies could alleviate thisproblem) and increased pressure on profits in the next few years from the loss of patentprotection for some of its key products. The company also faces federal investigations ofpast accounting practices.
BMS’s situation has several implications for its learning and knowledge activities:
• The company may recognize that only through increasing commitment to and supportof learning and knowledge activities—and by building human capital and providingample learning opportunities for its employees—will it be able to succeed in drugdiscovery and business performance. Such a commitment is also necessary to attract thekind of talented workers the company needs in the future.
• The company’s past commitment to and investments in a variety of learning andknowledge activities and the unwavering support by senior management duringdifficult times are positive signs for the longer-term future of the company.
• The company’s management may find that technology-based learning and knowledgeprocesses yield important cost reductions, productivity improvements, and otherimportant benefits that help turn around its poor financial performance.
eLearning Organization, Adoption, and ExperienceLike most other large, global organizations, BMS has a large number of trainingoperations (some 60 groups, though some consist of only a few people) that crossfunctional units and national boundaries. Thus, coordination and collaboration areimportant to rationalize learning and training operations and guide the implementation ofeLearning programs and procedures to meet both organizational and learners’ needs andpreferences. BMS has approximately 350 learning and training professionals, roughlyhalf of whom work directly or indirectly with eLearning, and a corporate technologygroup, with Steven Teal as director of Global Learning Solutions, which plays a key rolein coordinating learning resources and strategies. The group deals with BMS’s learningarchitecture, strategy issues, and LMS deployment and operates like an internaloutsourcing operation, serving the rest of the company in the areas of learning (andeLearning) and performance management. (Another major eLearning group in thecompany is in sales, but eLearning adoption finds common and growing use across allbusiness units of the company.)
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Like executives in other companies, BMS executives see eLearning as a way toachieve more cost-effective and flexible learning across the organization—includingwithin the mobile sales force that needs training on new products—but they also seebenefits of eLearning beyond lower training costs. A more strategic, higher-level goal isorganizational transformation, and learning, knowledge management, and electronicbusiness (e-business) are three key levers for accomplishing this longer-term goal. AsFigure 7 shows, these three elements will likely become increasingly integrated andjointly support business transformation. A key requirement is to align learning (andeLearning as an increasingly important element in overall learning) with corporatestrategy.
Figure 7ALIGNMENT OF KNOWLEDGE AND eLEARNING WITH CORPORATE STRATEGY
* Growing Role of eLearning.** KM = Knowledge Management, L = Learning, eB = Electronic Business.
Source: Bristol-Myers Squibb; SRIC-BI (Adapted from Steven Teal)
Customer
Prod
uct O
fferin
gsO
rganizational Capability
Competitive Architecture
Integration/Convergence**
CorporateStrategy
LearningStrategy*
BusinessResults
StrategicBusinessCapability
LKM
eB
KM L
eB
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The learning agenda at BMS includes the following objectives (according to TomasRamirez of Worldwide Medicines of BMS and Tracy Tinker of BMS Medical Imaging):
• Promote state-of-the-art methods. BMS wants to enhance the development andmanagement of human capital through the use of advanced tools for learning,eLearning, and training, enabling easy access to and flexible use of learning tools andcontent, which in turn will help decrease the time to competency (see the next bullet).
• Decrease time to competency. Most industries today need to transform learning andtraining and move away from old classroom-based methods that cannot meet the needsof highly distributed workforces that face accelerating learning challenges. The need todecrease time to competency is particularly strong in R&D, sales, and marketinggroups in pharmaceutical companies. Regulatory compliance is another key area inwhich eLearning has strong appeal in pharmaceutical companies. A large number ofemployees need compliance training, making this area a key target of opportunity foreLearning deployment.
• Support BMS’s learning constituency (internal and external). In addition to the threeprimary internal eLearning targets of opportunity (R&D, sales and marketing, and drugmanufacturing), life-sciences companies increasingly see value in targeting externalgroups with eLearning. As Figure 8 shows, digital content is now available insideorganizations either from formal, structured learning resources or from informal,unstructured learning materials. BMS will increasingly leverage this content byrepackaging it and rechanneling it into learning programs for doctors and medicalprofessionals and for customers.
• Accelerate the research and adoption of standards that promote sharable content andstandard enterprise systems. For BMS to achieve its goals, greater adoption of learningstandards will be necessary so that content from a variety of internal and externalsources will interoperate across BMS’s learning-delivery systems. EmbracingeLearning standards will also enable greater reuse of content for both internal andexternal purposes.
• Increase the accessibility and reusability of intellectual assets. Progress is under way indesigning the metadata schemas and taxonomies to improve access to content throughbetter and faster searching for and discovery of information and knowledge content thatlies within multiple documents and databases (see KM and Content Managementbelow). Reuse of BMS’s intellectual assets will also support the company’s plans forhuman-capital development, which include improved talent management, performancemanagement, learning management, content management, and global collaboration.
• Promote organizational collaboration and CoPs. Currently, BMS has more than 75communities of practice, according to Steven Teal, most of which are in BMS’sPharmaceutical Research Institute (PRI) and organize around specific compounds thatteams are researching. PRI’s Knowledge Integration Resources (KIR) group has alsodeveloped new tools for easier, more effective knowledge-based work, collaboration,and teamwork through the use of Web-based desktop tools (see below). This group andothers in BMS’s Knowledge Management group within KIR are working increasinglyclosely with Steven Teal and his eLearning colleagues throughout BMS.
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Figure 8REPURPOSING AND RECHANNELING OF LEARNING CONTENT
ContentRepository
* eL = eLearning, CM = Content Management.
Source: SRIC-BI
Doctors and OtherMedical Professionals
Patients andGeneral Consumers
• Web Sites
• Web-Based Seminars
• CD-ROM–Based Materials
• Written Materials
Structured/Formal Learning
Content
Unstructured/Informal Learning
Content
eL*
KM
CM*
In contrast to many companies in the life-sciences industry and in other industries, inwhich business units and divisions operate independently and with little coordination,BMS fosters extensive enterprisewide coordination and collaboration in the realms ofeLearning resources and strategy. The Global Learning Resources group in the corporateIT group plays a key role. BMS’s learning architecture (see Figure 9) is an important toolfor coordination and communication, providing a framework for eLearningimplementation plans and strategies. Although many pieces of this architecture, such asthe LMS and authoring tools, have been in place for a number of years, the company isupgrading and improving many of the tools and technologies it needs to carry out itslearning agenda:
• Upgrading and expanding the LMS. The company has deployed Plateau’s LMS and haspartitioned it on the basis of its value chain rather than on the basis of its business units.Although the company deployed the LMS in 1996, enterprisewide deployment did notbegin until 2001, and the system is now undergoing an upgrade. One goal is betterintegration with the company’s ERP system (from SAP) to allow the charge back oftraining costs to business units.
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• Improving authoring tools. Although BMS does not have a large eLearning-content–production unit, instructional designers in the Global Learning Solutions group and theHuman Resources group are using a variety of tools to create content. These toolsinclude Dreamweaver, Flash, and template-based tools from Suddenly Smart. Forsoftware simulation, the company uses SAP’s iTutor but is now examining othersimulation tools to improve application-software training and performance.
• Strengthening collaboration. Extensive collaboration takes place in the pharmaceuticalindustry, and BMS is no exception. The company uses Communispace’s platform (seethe LoD report eLearning in Financial Services: A Case-Based Analysis) but expects tosee growing use of Documentum’s eRoom technology—piggybacking on the extensiveuse of Documentum’s content-management systems for document sharing throughoutBMS.
Figure 9BRISTOL-MYERS SQUIBB LEARNING ARCHITECTURE
Change Management
Classroom Collaboration Performance Support
Learning-Content–Management System (LCMS)
Media Management
Enterprise Learning-Management System
Authoring Tools
Organizational Structures and Relationships
Network, Server, and Communications Network
Metadata
Personnel
Source: Bristol-Myers Squibb
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KM and Content ManagementThe creation and the sharing of knowledge are at the core of pharmaceutical-companyoperations. BMS’s strategic perspective on KM and eLearning and the strongcommitment of its senior executives will likely make the company a leader in theintegration or convergence of KM and eLearning.
Although KM finds application throughout BMS, KM initiatives are particularlypervasive in the R&D part of the company, and the Knowledge Integration Resourcesunit of PRI plays a key role in providing the people, tools, and technology necessary toimprove the use and leveraging of knowledge resources. Although KM’s standing inmany companies has diminished significantly during the past five years or more, as KM-based tools have failed to meet unrealistic expectations, BMS retains its KM focus. Anumber of executives and senior managers have KM in their titles, such as MelindaBickerstaff, vice president of Knowledge Management, and Daniel Klingler, chiefinformation officer (CIO) and senior vice president of Information and KnowledgeManagement.
BMS has launched the following KM initiatives in recent years, all with direct orindirect links to eLearning:
• The Knowledge Desktop (KD). According to Harvey Wiener, associate director of KIR,BMS developed KD as a gateway to enable teams and communities of practice tocollaborate and achieve breakthrough performance. It is more than an application,involving KM consultancy and service (by KIR), process (content-managementtraining and support), and teams’ business practices. The KD concept originated withDiscovery Informatics, but BMS transferred it to KIR (with continued collaborationbetween KIR and Discovery Informatics) because KIR could provide more support andservices, organization, and governance, as well as expertise in content sources.According to Dr. Wiener, “Lead Discovery and Applied Genomics executivesrequested KDs for seven newly emerging Target Class communities of practice pavingthe way to other disease areas. Broad use in Drug Discovery led to Drug Developmentand broad use in PRI led to Worldwide Medicinal Group.” Adoption of KDs hasextended beyond U.S. facilities to BMS’s international operations. Since 1998, theunderlying technology platform has evolved from an Apple Macintosh to a Unix-basedplatform, to a Documentum-based platform, and finally to the use of PlumTreeEnterprise Portal Communities. Along the way, KIR has provided new services, tools,and processes to support community building, operation, and content creation (althoughwork groups own content). As a result of these steps, content managers’ communitieshave grown and developed, now claiming more than 200 members.
• Portal technologies. BMS recently based its KD on PlumTree Enterprise Portal, but thecompany has also used Verity’s portal infrastructure software (on a Solaris platformfrom Sun) to support its drug discovery and development and has integrated it with itsDocumentum document-management systems, its Lotus Notes databases, and Novell’sresource-management software. The Verity-based portal finds use for informationmanagement; for example, it provides information filtering and news alerts for BMS’sscientists in targeted areas of interest.
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• Tools for intellectual-property (IP) searches. BMS has used Dialog’s intranet toolkit tomine patent databases, and the company has developed two intranet portals, includingthe IP Gateway, that enable scientists to construct complex searches of Dialog’sdatabases. Often, researchers must build comprehensive search strategies that not onlyinclude the relevant specific terms but also take advantage of value-added indexingterms available in Dialog’s databases. The portals enable users to browse across broadtopics and conduct free-text searches.
• Idea management. As informatics and genomics research continues to generate vastamounts of data and information in the R&D phase of drug discovery, management ofthe resulting databases becomes a major challenge. But two other aspects of knowledgemanagement—involving both the creation and the management of new knowledge—are innovation and ideation in scientific as well as business processes throughout theenterprise. One tool that BMS has used to manage ideas is Imaginatik’s Idea Centralapplication. The decision to use this tool came after BMS’s audit of its existinginnovation activities in late 2000 indicated that the company could benefit from a moreeffective and enterprisewide idea-management system. BMS now runs Idea Central onits intranet on an “event” basis (for example, BMS’s “war on diabetes” campaignresulted from a “diabetes-treatment” event-ideation process). Participants submit ideasagainst a weighted scorecard that the company customizes for each event.
Particularly for the highly structured aspects of content creation, documentation, andwork-flow management, BMS uses Documentum’s content-management system—forexample, to handle the thousands of pages of documentation of R&D and clinical trialsthat are necessary for each drug application that BMS submits to the U.S. Food and DrugAdministration. The Documentum system stores not only text documents but also avariety of media files—including Joint Photographic Experts Group and graphicsinterchange format files—that find use in applications throughout the enterprise. Thesystem integrates with the LMS from Plateau, and standard-operating-procedure trainingprograms use documents from Documentum. However, although Documentum’s content-management system—especially with the addition of eRoom—is finding growingapplication for both formal and informal learning, it cannot yet function as a full-fledgedLCMS, which BMS will need to adopt at some point. (See the discussion of this topic inthe Merck case study.)
BMS’s CIO, Daniel Klingler, has noted that his job concerns “the way people work,changes in the process they use, and changes in the technology needed to support it all”and that his responsibilities include “developing, delivering, and supporting all of theapplications that are used within the pharmaceuticals area” (CIO, October 2002).Although Klingler’s title refers to KM only and not to eLearning, his own job definitionclearly includes technologies that support either formal or informal learning activities andthus different forms of eLearning. Both the Knowledge Desktop and the portaltechnologies at BMS will likely be among the bridging technologies that enable thecompany to integrate KM and eLearning.
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Future Plans and ChallengesGiven the ambitious goals implicit in BMS’s learning agenda and the work necessary toprovide the tools and technologies for BMS’s learning infrastructure, the company’seLearning team has much work to do. Among its near-term tasks, some of which havealready begun, are:
• Preparations for LCMS deployment. According to Steven Teal, BMS is not yet ready tocommit to an LCMS rollout, because decision makers believe that more preparation isnecessary to take full advantage of such a system. (However, Suddenly Smart, whichprovides BMS with an authoring environment for nontechnical users, (a template-driven approach to building interactive and engaging content rapidly), publicizedBMS’s use of its system as “an LCMS installation.” (The company’s SmartBuilderincludes a learning-object repository that enables users to share and reuse content.)
• Selection of tools for simulation-based authoring. Although BMS has started usingsimulations for software applications, the company—like many others (see the LoDreport Simulations for Business Skills: Best Practices and Market Outlook)—sees agrowing need for good tools for creating simulation-based content. Most likely,however, high-end simulations will come from outside companies that specialize in thisarea. Indeed, a growing number of companies are targeting the life-sciences industrywith products such as interactive simulations (see CONTENT-DEVELOPMENTPERSPECTIVES).
• Adoption of new collaboration tools. Significant collaboration already takes place inBMS, especially inside the many CoPs in R&D. However, because the companyalready uses Documentum’s content-management system extensively, its use of theeRoom collaboration technology will increase significantly. eRoom is a relatively user-friendly and cost-effective solution, especially for users of Documentum’s document-management system. Moreover, the next version of eRoom will integrate fully with thedocument-management system.
• Globalization of BMS’s eLearning system. Very few, if any, large companies that haveembraced eLearning have been able to meet all the local learning needs of theiroperations around the world. Most companies know that they ought to localize theircontent, for instance, but few have been willing to bear the costs of doing so. The BMSeLearning team recognizes the need to start addressing such global challenges but isunlikely to master these challenges in the short term.
• Mobile learning. The bulk of training costs in pharmaceutical companies are usually insales and marketing: Thousands of sales and marketing staff members need to learnabout new products and be able to communicate clearly about their benefits and theresearch studies of the new drugs that they want medical professionals to prescribe totheir patients. Mobile devices, including Palm-based devices and PocketPCs (which usethe Microsoft mobile operating system) will find increasing use in such applications,especially as they enable more dynamic product demonstrations (see Growth ofMobile Productivity and m-Learning and the LoD Bulletin, First Quarter 2003).
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Although BMS has not yet started deploying mobile learning in a significant way,interest is growing and the eLearning team will be monitoring mobile technology andexamining how the company’s sales and marketing force can use mobile devices—andperhaps even mobile phones—effectively.
• Content reuse for effective customer eLearning. Interest is growing in “multiuse” andreuse of learning content, especially in ways that can increase customer loyalty oreducate consumers to take their medications correctly. Already, product-specific Websites contain educational materials, but in the future such materials will become moredynamic, engaging, and interesting so that they attract people’s attention and motivatethem to remember what they learn.
Steven Teal and his eLearning team see a variety of challenges ahead as they work toexpand eLearning opportunities and improve the quality of the eLearning experience foreveryone in the organization. Some of the challenges are the same as those that BMS’scompetitors face. For example, eLearning can help companies compete throughe-business and manage knowledge. To learn how to solve today’s global logisticsproblems, for instance, workers in global logistics operations could work throughsimulations of complex logistics situations, test their skills, and obtain immediatefeedback on their performance. Such simulations will likely be available soon, perhaps inthe form of multiplayer games in which competing teams of logistics experts can testtheir skills against those of their colleagues in other parts of the world.
Steven Teal cites the following BMS-specific challenges: geographic/organizationalsilos, multiple noncoordinated training operations, and lack of architectural standards.Resolving these challenges will take time, but with strong executive support andcommitment as well as strong, enterprisewide coordination and communication—bothwithin the eLearning team and between this team and KM and enterprise-content-management groups—the company is in a position to make significant progress in thenext few years.
GenentechGenentech is one of the smaller and youngest players in the life-sciences industry, so theeLearning experience in this case study is typical of midsize companies in industriesaround the world. Although the large Fortune 500 companies represent the “low-hangingfruit” for eLearning vendors, significant opportunities also exist in companies the size ofGenentech and even smaller.
Several other characteristics set Genentech apart from the other companies we profilein this report:
• As the second-largest biotechnology company in the world, the company is a leader inthe increasingly important science of drug development (and is responsible for morethan half the worldwide production of therapeutic proteins). This activity affects allparts of its value chain (and thereby its knowledge and learning needs and processes).
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• With its new facility in San Francisco, California, the company houses the largestsingle-site biotech research facility in the world. The company has other R&D facilitiesin Vacaville, California, and Porrino, Spain.
Company Background and Industry ContextGenentech is a fully integrated drug-development company, handling every step fromresearch and development to manufacturing and commercialization. The companyformed in 1987 and has developed the largest number of biotechnology-basedpharmaceutical drugs to reach the market during the past ten years. In addition to sellingits own, Genentech-branded products, the company has licensed many of these productsto the major pharmaceutical companies, which pay royalties to Genentech. Although thecompany is still much smaller than the largest pharmaceutical companies in its number ofemployees and sales—Pfizer had 98 000 employees in fiscal year 2002, whereasGenentech has 6000 employees—the company has seen rapid growth and is today a fullyintegrated drug-development company. The company’s strong growth, including a 70%rise in net income during fiscal year 2003 (thanks largely to sales of cancer-treatmentdrugs), has also contributed to a rapid rise in its market valuation, which doubled betweenMay 2002 and October 2002, reaching $41.3 billion on 24 October 2003 (BMS’s marketvaluation is $48.4 billion).
Given its significant income growth and expanding workforce in the past four years,Genentech has growing training and learning needs and needs to build an information-technology infrastructure that can support the company’s growing operations. However,like most players in the industry, Genentech has no guarantee that its income and profitswill continue to show strong growth—even given the generally positive outlook for thebiotechnology sector. The company’s performance will depend on how the followingcharacteristics of the company evolve:
• Today, only two drugs account for 73% of Genentech’s total product revenue, pointingto a strong need to diversify its revenue base.
• Three new drugs will likely enter the marketplace in 2004, and investors have very highexpectations for them.
• The company needs to continue filling its pipeline with high-market-potential drugs.
eLearning Organization, Adoption, and ExperienceWhereas the corporate IT group is the key driver of BMS’s eLearning initiative, theHuman Resources group at Genentech has taken the lead in implementing eLearning inthe company. (HR’s goal is to have 25% of its curriculum online by the end of 2004.) Inaddition to overseeing eLearning, the company’s HR group is responsible for the trainingof new hires as well as for management development. The group also “owns” and leadsthe implementation of the company’s LMS (see Figure 10 and the discussion below).
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However, a dozen training groups operate quite independently in different operating unitsof Genentech and in different geographic locations, and their training activities focus ontechnology, health and safety, good manufacturing practices, medical affairs, qualitycontrol, and other key areas. Another challenge for the company is that most majortraining groups must work on systems and procedures that are federally regulated by theU.S. Food and Drug Administration. These groups have control over all contentdecisions, identifying their own content needs and deciding whether to buy context fromexternal vendors or to develop it internally. Most groups have limited content-development capabilities, however, so they buy most eLearning content off the shelf andhire external content developers to customize the content for Genentech’s needs.Although the training groups are relatively autonomous, they will now feel the effects of,and benefit from, the enterprisewide rollout of the Plateau LMS (branded by the name“gLearn” within Genentech). They also will have an opportunity to influence eLearningand other training policies through the company’s consortium of training managers. Thisgroup—in effect, a community of practice for learning and training—will help makedecisions about eLearning standards and other issues.
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Figure 10GENENTECH’S LMS* DEPLOYMENT
• Training Materials for Systems and Training AdministratorsWho Needed to Understand LMS
• 30-Minute Application Simulation Training for Employees
• 45-Minute Application Simulation Training for Supervisors
• Classroom-Based Business-Process Training forManufacturing Supervisors
November 2001
Decision to BuyPlateau LMS
Decision to“Go Live”
November 2003
* LMS = learning-management system.
Source: Genentech; SRIC-BI
• Because Plateau did not have appropriate online training materials, the GenentecheLearning team had to prepare the materials.
• Customization of generic interfaces was necessary to meet Genentech’s needs.
• A lengthy and time-consuming “validation process” was necessary to prepare theLMS for U.S. Food and Drug Administration requirements.
• Genenech developed a set of new business processes that redefined how todevelop, deliver, and evaluate training in the good-manufacturing-practiceorganization. This process then turned into an effective standard operating procedurethat everyone in the regulated areas of manufacturing must adhere to.
Three Main Internal LMSUser Groups:
• Manufacturing
• Development Sciences
• Medical Affairs
Human-Resources Group’s Actions to Support LMS Implementation:
• Created Web-Based Tools and Resources to Support End Users andAdministrators
• Developed and Distributed Quick Reference Guides to a Majority of Employees
• Recruited and Trained Business-Specific Coaches to Assist in ChangeManagement on the Local Level
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LMS PERSPECTIVES
Plateau is a learning-management systems (LMSs) vendor that has had considerable success with a solution that
caters to the life-sciences industry’s large compliance needs. In some ways, Plateau’s success mimics that of WBT
Systems, which has had significant success around the world with compliance solutions in the financial-services
industry. Plateau is a “straight LMS” provider, with no authoring or content-management capabilities—and this
fact sets it apart from WBT Systems, whose learning-content–management system (LCMS) offers authoring and
content-conversion capability. Plateau is partnering with companies that offer authoring and publishing tools and
making sure that these tools integrate well with its LMS. In recent months, Plateau announced a partnership with
Trivantis, which has the Lectora authoring and publishing tool.
Macromedia has also announced that it has an LMS adapter for Plateau’s LMS, enabling integration of its
popular Breeze product with the Plateau system. (Breeze enables rich-media-content authoring—by adding audio
to Microsoft’s PowerPoint presentations, for instance—as well as rich-media-content management.) But
Macromedia may also soon develop such adapters for other LMS and LCMS platforms to make Breeze attractive
to a wider market.
The Learning Technologies team in HR Learning and Organizational Development,under Harry Wittenberg, senior manager of Learning Technologies (who held a similarposition at Charles Schwab for a number of years as well as at other organizations,including IBM, Apple, Cisco, and Simon & Schuster), spent most of its time in 2003overseeing the deployment of the Plateau LMS—a process that has not been as easy orpainless as the team had hoped. This LMS is the same one that BMS and a large numberof other life-sciences companies have deployed (see the box just above).
Genentech is implementing portal technologies to improve user access to intellectual-property and knowledge assets and eventually to provide access to a variety of work-related content and content that relates to employees’ personal lives. Developingtaxonomies and assigning metadata to various forms of knowledge, information, andlearning objects will enable easy access to and multiuse of content and simplify theupdating of these objects. Genentech has just begun deploying these technologies—especially on the eLearning side, where the LMS deployment is absorbing most availableresources. The dialogue between the company’s information architects and the eLearningteam will likely intensify after the LMS is up and running and most of the trainingmaterials are ready.
Given the early stage of LMS deployment, Genentech has not yet integrated its LMSwith the two document-management systems it uses. This integration is underconsideration while the company is looking at a broad strategy for KM, documentcontrol, and Web-content management to gain full benefits from both systems and tomake the most of its document-management systems, which are critical in thecompliance-driven environment in which the company lives. As part of its enterprisewidedeployment of the Plateau LMS, Genentech is integrating the LMS with its PeopleSoft
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ERP system. (Just as BMS has not given serious consideration to deploying the SAPLearning Solution even though it runs SAP’s ERP, Genentech has chosen not to go withPeopleSoft’s LMS product.)
KM and Content ManagementLearning and KM and Change Management are two distinct groups under the corporateinformation-technology (CIT) group in Genentech. This structure is similar to BMS’salthough BMS’s larger KIR group handles a wider range of KM activities thanGenentech’s groups do. Senior executives’ support for and commitment to both KM andeLearning are also greater at BMS than at Genentech. However, at Genentech, eLearningis gaining support among senior management in HR, and KM with a “computingfocus”—going beyond fuzzy and “soft” concepts to more operational and tacticalimplementations—is gaining support in Genentech’s CIT group. Because this group leadsthe company’s IT planning that will support all knowledge and learning processes in theorganization, it will likely play an important role in enabling new and more advancedeLearning and KM initiatives at Genentech. These efforts will likely include the use ofcollaborative technologies that can bridge the formal LMS-based eLearning and trainingoperations and the more informal and unstructured learning processes in the company.
KM and content management will gain strong support in the organization only if theyhelp achieve key business objectives (see Figure 11). Strategic IT initiatives will helpachieve these goals. Additional strategic business goals with direct and indirectimplications for KM, eLearning, and content management include customer-relationshipmanagement, electronic procurement, manufacturing automation, supply-chainconsolidation, and decision-support dashboards.
A look at Genentech’s business goals and strategic technology initiatives reveals thateLearning and KM are only two pieces of a much larger picture and of a range ofsignificant challenges that face the organization. But Genentech’s IT team recognizes thateLearning and KM both draw on and contribute to efficient and effective (IT-supported)processes that will help the company reach its business goals.
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Figure 11STRATEGIC TECHNOLOGY INITIATIVES TO SUPPORT BUSINESS GOALS
BusinessGoals
Source: Genentech; SRIC-BI
Commercial:Strategic
AgilityResearch andDevelopment:
Discovery
Manufacturing:Efficiency and
Validation
Legal:Intellectual
Property, RecordsRetention, and
Compliance
Financial:Planning,
Auditing, andOversight
Human Resources:Dynamic and Enabled
Workforce andManagement
Structure
InformationTechnology:Personalized
Application andKnowledge
Delivery
• IntranetRedesign
• EnterpriseArchitectureDocumentation
• Data Harmonization
• MiddlewareStrategy
• Enterprise-ApplicationIntegration
Strategic Technology Initiatives
Future Plans and ChallengesGenentech’s strategic IT projects and component initiatives contain elements that willaffect learning and knowledge processes at the company. One goal of the intranet-redesign project, for instance, is to build a “knowledge-enabled workforce,” which callsfor developing learner-centered portals with access to a large number of applications(particularly for supporting work processes). Figure 12 shows some of the tasks that thesepersonalized portals may be able to support and shows how they will extend beyond workand company issues.
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Figure 12EMPLOYEE-CENTERED PORTALS
Source: Genentech
My Home
• Messages from My CEO
• My News (Subscribed
and Prescribed)
• My E-Mail
• My Calendar
My Company
• Taxonomy by Department,Products, and So On
• Company Activities
• Company Store
• Brand Statements
My Life
• Personal Data
• Benefits
• Life Events
• My Finances
• My Sports Club
• Learning and DevelopmentMy Work Space
• Knowledge and Information
• Work Tools for My Role
• My Team and Communities
• Management of My Team
Employee
Deployment of the LMS has taken a major share of the resources of Genentech’seLearning team in the past year, and when the eLearning team completes this deploymentand training of systems and training administrators, it can move to other tasks. Thesetasks will include:
• Automation of the Procedure Revision Process through the LMS. This automation willsave a tremendous amount of time and stress in delivering this important training.
• Identification of corporate and business-unit competencies and aligning them withrequired training through the LMS, ultimately allowing a supervisor to assign acompetency to an employee and all of its associated learning through the LMS.
• Integration of the LMS with other internal systems as well as outside, third-partycontent vendors.
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Roche DiagnosticsWith annual revenue of almost $23 billion and some 72 000 employees around the world,Roche is one of the largest life-sciences companies in the world, with interests in researchand development, manufacturing and sale of pharmaceuticals, diagnostics, vitamins, andfine chemicals. Hoffmann-La Roche, Inc., began operation in 1896, in Basel,Switzerland, and Roche now operates in 150 countries. During 2000 and 2002, thecompany spun off its Fragrance and Flavors Division and reaffirmed its decision to spinoff the Vitamins and Fine Chemicals Division. In February 2003, Roche completed therealignment of its activities around its two core businesses: pharmaceuticals anddiagnostics. The company is the top producer of diagnostics in the world and is anindustry leader in hospital-based products. Roche also has a majority holding inGenentech.
eLearning ActivitiesAccording to Gary Wise, director of Learning & Development at Roche Diagnostics,eLearning is part of the larger goal of transforming the company into a learningorganization (see Figure 13). Gary Wise’s organization is part of the Human Resourcesgroup and plays a key role in supporting knowledge and learning processes and systemsthroughout Roche Diagnostics. This effort will first focus on more than 6000 employeeswho are primarily in Roche’s North American operations in Indiana. At present, this partof the division is farther along than others in eLearning implementation; as a result, theLearning & Development group will likely have a growing influence on eLearningactivities and initiatives in other parts of the organization (including Roche divisionsoutside the United States) after the U.S.-based initiatives mature further. Given the size ofits global operations, Roche has vast learning and training needs, and eLearning’s role inmeeting these learning needs will likely grow steadily.
Gary Wise’s group acts as a clearinghouse for eLearning. It provides a centralrepository and advises on best practices in eLearning and enterprise learning—a role thatis becoming increasingly important among the companies we talked to for this report.Roche Diagnostics also has an internal council on eLearning in which some 25 peoplespanning 15 business areas share best practices.
When launching the eLearning initiative at Roche, the eLearning team conducted aneLearning benchmarking project and looked at several significant corporate learninginitiatives, including those at IBM, Cisco, and Eli Lilly. The company is also active ineLearning benchmarking forums.
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Figure 13TOWARD A LEARNING ORGANIZATION AND KNOWLEDGE ENTERPRISE
Source: IBM; SRIC-BI
Knowledge Laggard
Knowledge Leverager
Knowledge Innovator
Knowledge Loser
Knowledge Gatherer
Learning Organization/Knowledge Enterprise
• Knowledge-management discipline pervades the organization’s structure, systems, and employeebehavior.
• The organization’s culture supports a continuous cycle of learning that allows the organization toadapt to changes in the business environment.
• Knowledge systems extend beyond the enterprise to business partners and customer operations.
• Knowledge strategies seek to create new business models through alliances that leverage intellectualcapital and competencies across the value chain.
Although eLearning is still relatively new to Roche, awareness and acceptance of theapproach is growing. Further penetration of eLearning in the organization will depend onhow well it helps people solve real business problems. For this reason, tying eLearning toperformance consulting (see below) will likely be important for the future of eLearningas well as of learning and training in general. Three-fourths of current training still takesplace in the classroom, and though eLearning’s share of total learning activities is likelyto increase, the company will need to use a blended approach that uses a variety oflearning activities and modalities. At present, Roche’s eLearning targets its ownemployees and does not touch customers or partners, but in the near future, the companyhopes to expand it to customers—especially by repurposing content from marketing and
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sales divisions. (Customer learning is also a growing target area for LMS vendors, andSaba recently published the white paper Enterprise Learning for Customer Education:Driving Revenue and Strategic Business Value; see http://www.saba.com. Also see theLoD report eLearning along the Value Chain.)
At Roche Diagnostics, some 76 people work in training, 9 of whom work directly ineLearning. Roughly half the training team participates in customer-training initiatives,which are mostly classroom-based programs.
Content developers have built some 80 eLearning courses specifically for thecompany, and the company outsources some 50% of this development of customeLearning content. Although online courses are an important part of the total eLearningoffering at Roche, eLearning has several other key components, such as electronicperformance support systems (EPSSs) and live collaboration (meetings and virtualclassrooms). Over time, a growing number of components are likely to join the eLearningprogram, although the company will make a strong effort to integrate these componentsinto a relatively seamless system.
Roche is applying eLearning in a number of areas throughout the company, and therange of applications will likely grow as eLearning penetrates other parts of theorganization. Today, a major part of the company’s simulation- and EPSS-basedeLearning centers on SAP training and other IT topics. In IT, Roche also leverages morethan 600 courses from the content libraries of NetG and Element K.
On the soft-skills side, Roche uses DDI’s content library for management andleadership development. It also uses off-the-shelf content for legal and HR training.Industry-specific eLearning topics include safety training, hazardous-material handing,and forklift operations.
One area in which Roche has found eLearning to be especially useful is its salesorganization. Because most sales representatives work from home or from regionaloffices, eLearning is the most flexible and cost-effective way to reach and engage them.(Roche and other companies still need to create sufficiently engaging eLearning content,but new tools and technologies are helping them make progress on this front.)
Every person in the Roche Diagnostics sales force has an IBM laptop with a browser,and these laptops are sales representatives’ primary vehicle for eLearning access. Manyof the sales representatives also use PDAs, but they don’t currently have ubiquitouswireless access from their PDAs. The company is in the pilot phase of providing mobileaccess to CRM and sales-force-automation (SFA) data (Roche is using Clarify as theCRM application)—and greater use of PDA-type devices for formal and informallearning applications is likely in the longer term.
eLearning ArchitectureRoche is using an LMS from TEDS as the central learning clearinghouse for all trainingand eLearning activities. (TEDS is a software-development and -consulting company thatprovides LMS, performance-management, and workforce-management products andservices—and that recently became an acquisition of Fidelity Investments.) The TEDSLMS, which Roche rolled out over a two-year implementation, provides standard LMSfunctionality, such as user management, training administration, and reporting capabilityfor all types of training offerings (online, instructor-led, and so on). The LMS fully
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supports SCORM-based content uploading, launching, and tracking. Built-in tools allowfor surveying and assessment as well as training evaluation. The LMS also houses thecompetency data and mechanisms necessary to build customized learning plans anddevelopmental plans that address job and skill gaps.
Roche recently also began using a virtual-classroom platform, Centra Symposium,from Centra Software. The company has integrated TEDS and Centra to provideseamless access to virtual classrooms from within the TEDS training catalog. On theLCMS front, Roche uses Centra Knowledge Center (CKC) to build a knowledge- andlearning-object repository (see Figure 14). CKC provides more benefits to Roche than adocument-management system would. For example, CKC provides ready-madeintegration with Centra’s virtual-classroom platform to enable storage, searching, andplayback of recordings of live sessions as self-paced knowledge objects from within theCKC repository. In addition, the company can use learning objects that it creates withCKC’s built-in tools, such as Composer for PowerPoint, rapidly to create content withassessment and post it as Web-delivered knowledge objects. Built-in SCORM-compliantcontent packaging and tracking was another factor that influenced Roche’s decision toadopt this type of LCMS rather than a pure document-management system (although thecompany also uses Documentum; see below).
For content authoring, Roche uses a number of tools to create eLearning content fordifferent needs. The internal content-development and instructional-design team usesDreamweaver and Flash to build the courses. To create simulation-based content forapplication training (such as CRM-/SFA-systems training and rollout), Roche is usingInfoPack from RWD.
eLearning content in past courses is still mostly static, taking the form of “page-turners,” but the eLearning team plans to add interactivity and engagement for learners.Team members also want to add more Flash, streaming audio, and photos to their recenteLearning content. Today, only a small percentage of content uses Flash, and developersbuild the majority of the courses in Hypertext Markup Language/JavaScripts. Thecompany’s eLearning content does not currently use streaming video.
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Figure 14ROCHE DIAGNOSTICS eLEARNING ARCHITECTURE
Learner
TEDS(LMS)
Centra Composerfor PowerPoint
Third-Party SCORM- Compatible Content
CentraKnowledge
Center(LCMS)
SCORM*-Compliant LMS(API** Adapter)
SCORM*-Compliant
Content Output
Results
InfoPack SoftwareSimulations
SCORM CompliantDreamweaver Content
Launch
* SCORM = Sharable Content Object Reference Model.** API = Application Programming Interface.
Source: Harvey Singh
Knowledge Management and eLearningAt Roche, convergence of knowledge management and eLearning has been underdiscussion at a high, conceptual level; however, no active implementation of a combinedor unified KM/eLearning system is under way. Gary Wise believes that KM andeLearning could come together and that some degree of convergence is likely in thefuture, but the company has no active initiative at the moment. At present, knowledgemanagement is finding greatest use in the R&D organization (a common pattern in life-sciences companies) but for specific applications and for knowledge or document sharingonly.
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Among executives and business users, KM is still not a key initiative in theorganization or part of their common vocabulary. eLearning has greater acceptance thanKM does and has a higher degree of buy-in and executive sponsorship—a situation thatdiffers from that in many other life-sciences companies in which KM initiatives have alonger and deeper tradition.
Documentum is the most significant enterprise application that Roche Diagnosticsuses for knowledge and document sharing. However, eLearning content lives outside thiscontent-management system. Roche would like to leverage the content in eLearningdocuments and Web pages, but the current document-management systems and LCMSare not ready-made to leverage such content.
For collaborative knowledge sharing, parts of the organization use eRoom within theDocumentum suite (eRoom integrates document management, collaboration/sharing, andvirtual meetings). For example, the Diabetes care group uses eRoom for marketing andfor tracking of agency projects as well as for content management and collaboration. Atpresent, the training organization is not using eRoom.
Performance Consulting, Business-Process Management, and ScorecardsGary Wise is spearheading an initiative to cultivate a performance-consulting mind-set atRoche Diagnostics. He believes that taking a performance-centric view will allow thecompany to tie learning initiatives more closely to business issues.
In the realm of training measurement, Roche has implemented only levels 1 (reactionto training) and 2 (gain in knowledge/learning) of Kirkpatrick’s model. It is definingmodels for level 3 (behavior change) and level 4 (business impact) in conjunction withnew performance-consulting approaches.
Roche also uses Six Sigma initiatives and performance-consulting approaches in itsbusiness processes and training initiatives. For performance measurement, the companyuses light business-process–modeling tools like Visio and is considering applyingscorecard models and applications in the future. In Gary Wise’s vision, performanceconsulting and business alignment are the key strategy elements of a learning model inwhich context drives 80% of learning content rather than the other way around.
Future Plans and ChallengesPerformance consulting and business alignment will be key determinants of howeLearning evolves at Roche Diagnostics and likely at Roche as a whole. Any look at theintegrated learning architecture at Roche Diagnostics and the various elements ofeLearning must consider this context. Currently, the key platforms in Roche’s eLearningarchitecture are TEDS (the LMS) and Centra (for virtual classrooms and the LCMS), andthese two pieces must also tie into Roche’s ERP from SAP. Roche is now working toprovide an integrated, single log-in to access the eLearning system. It also will integrateits LMS with the company’s SAP portal in 2004. Although the company’s eLearningteam has examined SAP Learning System, the company is not using the system becausethe technology does not support all the needs of Roche Diagnostics. However, like othercompanies we talked to during our research, Roche will likely revisit this question atsome future time, because usability and implementation cycles (and overall life-cyclecosts) are key factors that favor using an LMS from the company’s ERP vendor.
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Among other key elements in the company’s eLearning plans and initiatives are:
• Greater capability and flexibility in content creation. The eLearning team would like tobe able to customize content and to mix and match off-the-shelf and custom contenteasily at a more modular or granular level than it can now.
• Better and more comprehensive content management and easier content search. On theLCMS front, the Roche team would like to implement flexible/custom metadata, buildcontent taxonomies, and include collaborative authoring and version control.
• Greater consolidation and integration of platforms. Roche Diagnostics has someredundancy in platforms for collaboration between KM and eLearning, so someconsolidation is likely in the future.
MerckWith headquarters in New Jersey, Merck is one of the world’s largest pharmaceuticalcompanies, with annual revenue of nearly $52 billion and operations in 150 countries.The company employs 62 000 people worldwide and has a sales staff of some 5000 in theUnited States. Merck plans to add significant sales staff within the next year—continuingthe pharmaceutical-sales-staff trajectory in Table 2—but weak financial performancemay reverse these plans. With more than 11 research and development centers, Merckhas aggressive plans to bring new drugs and vaccines to market between now and 2006—and will need to do so to justify the planned increase in sales staff. The companyproduces one of the most widely used medical texts in the world, the Merck Manual ofDiagnostics & Therapy, which has more than 300 medical-expert contributors.
eLearning ActivitiesMerck has been deploying eLearning within a number of its divisions in the past fewyears. Though it has neither a central/consolidated enterprisewide training and eLearninginitiative nor a central learning-management system, it sponsors a number of keyeLearning initiatives throughout the organization. At present, most eLearning at Merck isinternal. Though the company has no formal customer-eLearning initiative, it hasinvested in multiple Web sites (in addition to multimedia CD-ROM titles) for physiciansand end customers.
In the past three years, eLearning practitioners from different units and departments(some 40 people) have come together to create an internal focus group for sharing bestpractices; leveraging tools, technology, and ideas; and collaborating on eLearninginitiatives. Acceptance of eLearning is growing throughout the company, especiallybecause it offers cost savings and reduced travel. Organization and business users havehigh expectations of eLearning courses and user experiences. Merck deploys richmultimedia courses, many of which come from external vendors that specialize in Web-based media and instructional design. Merck also uses virtual classrooms and livemeetings to disseminate knowledge, and the company’s use of live-collaboration tools isexpanding. The corporate training department has also set up virtual-classroom centers
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where instructors can obtain support and conduct virtual-classroom sessions. The MerckHR and corporate learning groups also deploy an externally hosted library of off-the-shelfcontent from vendors such as SkillSoft. However, they manage these courses separatelyfrom the internal or custom content that the company’s main LMS, Merck eLearningsystem (MELS) delivers.
Merck has been applying many eLearning components in a blended-learningoffering, including use of physical classroom or instructor-led training, virtualclassrooms, and self-paced Web-based training, simulations, and CD-ROMs. In addition,Lisa Van Damme, manager, Organizational Learning, is overseeing a performance-management initiative for senior managers in the organization that uses classroom events,virtual classrooms, eLearning, and Web-based evaluations and assessments within asingle learning program—taking the notion of blended learning to the next level.
Learning and Knowledge-Systems ArchitectureAt present, Merck does not have a centralized, corporatewide LMS that is accessible toall its employees. A corporatewide LMS initiative has been under discussion for twoyears, but implementation is on hold until the company completes implementation of anenterprise human-resource information system (HRIS) from PeopleSoft. The companyplans to move to an enterprisewide LMS but has set no firm timeline for this project.
Through an HR eLearning initiative, the Merck eLearning team created its own,internal LMS, MELS, with help from the corporate IT team. MELS serves as thecorporate LMS and manages online or Web-based learning. At present, Merck uses aPeopleSoft Training Administration module for enrollment in and management ofinstructor-led training. However, the module does not provide self-registration. MELSaims to work with SCORM-compliant courses, and it tracks learners’ progress and scoreswithin its Oracle database. MELS also helps manage regulatory compliancerequirements. One of the key challenges for learners is the need to go to different placesfor different learning offerings.
Merck recently embarked on a collaborative initiative (involving an internal councilof representatives from various business units and departments) to select an easy-to-useauthoring tool. Council members selected a product from TrainerSoft (which the LCMScompany Outstart acquired in October 2002) as its desktop authoring tool. Within a fewmonths, the number of TrainerSoft users has expanded to more than 150 internal contentauthors. TrainerSoft provides a graphical-user-interface–based visual authoringenvironment for tutorials and assessments. In addition, the software produces SCORM-compliant courses that Merck can post on MELS. Developers have defined templateswith input from various content groups and provided visual elements (with corporatebranding and logos) and navigational elements to create consistency in the look and feelof content. Merck’s use of TrainerSoft has enabled the company to bring a lot of contentdevelopment in-house and therefore cut content-creation costs.
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Figure 15A MODEL FOR INTEGRATING eLEARNING AND KM AT MERCK
Source: Harvey Singh
IntranetTraining, Business-Process Management, References
ElectronicPerformance
Support System
LearningContent(LCMS)
Learning-Management
System
WebPortals
Authoring ToolsHuman-Resource
Information System
Merck uses Centra for live collaboration and virtual classrooms. The companyexpects its use of live and collaborative learning to jump significantly in the next twoyears. Centra Symposium provides robust features for orchestrating a completeinteractive learning experience, including instructor-led presentations, annotations,application sharing, hand raising, and live chats.
With the proliferation of easy-to-use authoring tools among internal authors andexternal vendors, Merck faces the challenge of managing, updating, and potentiallyreusing the content and learning objects that come from its many authors in manybusiness units and departments. Systems such as Interwoven handle Web-site contentmanagement and publishing. In addition, Merck uses several content-managementsystems, including Documentum’s document-management system and Panagon.Documentum is the most widely used document-management system. CMSs are findinguse in the management of SOP documents and related training. However, so far, thecompany has not used document and Web-site CMSs to manage eLearning content. Also,Merck has not deployed an enterprisewide LCMS (Outstart is likely to use its TrainerSoftacquisition to encourage Merck to purchase its LCMS platform). Merck would like toleverage documents, media assets, and Web content in the document and Web-site CMSsso that it can use the content for eLearning.
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Ideally, Merck would like to combine and consolidate enterprise CMSs and anLCMS into one common content and learning framework. However, a research initiativethat the company launched to explore this idea revealed a number of technical challenges:
• Differing system capabilities. CMSs such as Documentum provide manyfunctionalities, such as customizable and extensible metadata, support for document-level collaborative access (check-in/checkout and locking), version control, andcontent–life-cycle management and publishing. However, document- and content-management systems do not support rich content structures like eLearning courses andassessments, which may comprise many learning objects that in turn include interactiveactivities and media assets.
• CMS weakness. Another shortcoming of document- and content-management systemsis their lack of SCORM support and standardized tracking (scores), bookmarking,personalized learning curricula, and built-in communication with learning-managementsystems.
• LCMS weakness. LCMSs, in contrast, do not support rich document-managementfunctionality such as document–life-cycle management, versioning, and managementof rich-media assets (Documentum supports one LCMS through its acquisition of theBulldog media-asset–management tool.) LCMSs also tend to limit the authorship ofcontent to the vendor’s templates and authoring tools. Sometimes the authoring toolsthat ship with LCMSs do not integrate seamlessly with back-end repositories becauseof the relative immaturity of the LCMS market. Some of these systems also lack therobust features that end users have come to expect, such as drag-and-drop editing oflower-level elements like navigation buttons/icons, text editing with spell checking, andlocalization (support of multiple languages). (Such functionality is typically availablein sophisticated end-user tools such as Microsoft Office).
At Merck, KM and eLearning initiatives have been separate for some time. eLearningis gaining support at the grassroots level and has management backing and sponsorship invarious departments. KM initiatives are still more selective and mostly target the R&Dand manufacturing organizations in the company. A group within the information-systems organization at Merck is exploring KM and has piloted the use of groupwaretools such as Groove (for peer-to-peer content sharing) and Communispace (for creatingcommunities of practices and knowledge sharing).
A group within Merck Manufacturing under Robert Lechich has taken the lead incombining eLearning and KM. This division needs to train both internal and externalpartners in document and knowledge-content management and compliance. To this end,it has set up intranet and extranet server configurations to link with Documentum as thecentral content repository. Documentum’s Web Publisher manages Web delivery of thecontent the group stores in Documentum’s document repository. Also, subject-matterexperts in the manufacturing division rapidly build compliance-related tutorials usingtools such as PowerPoint with audio narration and TrainerSoft with interactiveassessments. The manufacturing division’s unified KM and eLearning model includes
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information and knowledge from structured learning environments such as LMSs, butmore important, it offers content via non-LMS interfaces such as business and Webportals.
eLearning in Merck’s Sales OrganizationWithin Merck, the sales organization has the most sophisticated deployment ofeLearning. The acceptance and proliferation of eLearning in the sales organization is highbecause of flexible scheduling, remote accessibility, and a clear return on investmentbecause of reduced travel costs and reduced time away from work. With a sales staff ofmore than 5000, Merck sees a sizable business-performance effect of the cost savings,and the impact on sales productivity is direct and measurable, more so than in most otherapplications of eLearning.
Despite Merck’s recognition of these benefits, however, some 80% of sales trainingis still instructor-led training at the present time. But the Merck eLearning team plans tochange this situation dramatically in 2004, increasing eLearning’s share of overalltraining offerings—through asynchronous/self-paced learning and synchronous/liveeLearning—to some 50%.
Merck’s sales organization also uses a knowledge portal to empower sales-staffmembers to take charge of their own learning. The portal provides product knowledge,sales strategy, and a host of other learning and performance-management resources.
Sales eLearning has a strong, dedicated IT team supporting the construction andmaintenance of the internally built LMS and LCMS that sit on top of an Oracle database.The LMS allows trainers to launch and track SCORM-compliant courses. Most salescourses have an audio option that users can turn on or off. The IT team has built asophisticated learning-content repository to support an architecture of reusable learningobjects (see LoD Bulletin, Fourth Quarter 2001, and LoD reports Learning Objects inPractice and Learning Objects: Key Issues for Future Growth). The repository supportsmetatagging of knowledge and learning objects and uses Extensible Markup Language(XML) data structures to support learning-object templates. The innovative template-driven approach to creating product knowledge content and learning objects offersseveral advantages:
• Rapid content creation. Authors can load text, Flash, and other media assets into formsthat link to XML schemas.
• Consistency in content creation. Because Merck’s product-knowledge content modeltends to be similar across product lines, the company can achieve consistent contentcreation across multiple internal or external groups. The company can load its template-based learning objects into the LCMS, which links to the LMS that delivers Web- andCD-ROM–based learning content.
The sales organization uses a separate system to manage print-based training contentand documents (PowerPoint leader guides for instructor-led training). However, in thefuture, a common LCMS can support both Web-based and classroom-based trainingmaterials and content. The sales organization has a robust system and architecture toaddress that vision in the future.
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Future Directions and ChallengesAfter deployment of a consistent and corporatewide HRIS from PeopleSoft, Merck willbe in a good position to move toward a corporatewide LMS. Meanwhile, Merck isestablishing standards, guidelines, and processes for eLearning-content creation andproliferation. In the longer run, Merck’s eLearning program will likely involve:
• An integrated learning-management system. An integrated LMS will supportpersonalized (job-role–based) learning curricula, competency-based learning, blendedlearning programs (combining online, self-paced learning, virtual collaboration,classroom-training registration, and custom and off-the-shelf content), and consistent,standards-based/SCORM-compliance tracking and reporting. Though the salesorganization may continue to manage its own learning systems, the rest of the companyis likely to leverage a common infrastructure for training administration, delivery, andreporting. For end users, a single learning environment and catalog would help themfind learning resources quickly and provide consistent access to all available programs.
• An integrated content-management system. Grassroots eLearning-content creation willcontinue to spread, so Merck will benefit significantly from a consolidated content-management system. An integrated learning and content-management system couldmanage content that people create using a variety of authoring tools—such as Web-based tutorials, assessments, software simulations, and Flash-based content—at thesource level to simplify updates and reuse. In addition, the CMS would provide robustcollaborative content development, life-cycle management, and publishing work flows(supporting both internal groups and external vendors who create customer content). Asystem that allows people to access and leverage content from document- and media-asset–management systems within learning courses and content would yield majorbenefits.
• Integration of learning with business processes. In the long run, Merck will reapsignificant benefits if it integrates learning with business processes and ERP systemssuch as PeopleSoft’s. Though much of the learning would be available through aformal and structured LMS, in the long run, the ability to deliver information andresources within business work flows, via Web portals and electronic performancesystems, would dramatically improve the productivity of end users throughout theorganization.
CONTENT-DEVELOPMENT PERSPECTIVES
The life-sciences industry is an important target market for a variety of vendors thatdirectly or indirectly serve the learning and training needs of companies in this industry(see Figure 16). Opportunities exist to provide technology platforms, services, andgeneric courses for technology or business training. For some vendors the life-sciencesindustry is either their primary, or a very important, market, but most vendors servemultiple industries. However, the content companies we discuss in this section focusprimarily—or in most cases, exclusively—on meeting the eLearning needs of the life-sciences and health-care industries.
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In addition to providing custom content to serve the training needs of companies inthe life-sciences industry, many of the eLearning-content developers that develop coursesin the medical field also create content for the educational Web sites of hospitals andother health-care organizations. Web sites with eLearning content for medicalprofessionals now proliferate, offering increasingly sophisticated content design anddelivery platforms. Many of these sites—such as the Stoppain.org Web site of Beth IsraelMedical Center (http://www.stoppain.org), which contains a rich selection of onlinecontent (see the box just below, and see the discussion of Medsn below) and Web sites ofmedical organizations such as the American Medical Association—provide continuingmedical education for medical professionals.
Figure 16PATHS TO SERVING THE eLEARNING NEEDS OF THE LIFE-SCIENCES INDUSTRY
LMS and LCMS Vendors
Companies such as Plateau,Docent, and WBT Systemshave had significant successby addressing the highlycompliance-focused trainingneeds in the industry, forexample.
eLearning-Course Developers
SkillSoft and other vendors providecourses on various information-technology and business topics—some of which have somecustomization to meet specificneeds of the life-sciences industry.
Life-Sciences–FocusedContent Developers
Most eLearning content inthe life-sciences industryis highly specific andcustomized to companies’operations and needs.
Technology and Service Providers
Companies such as IBM, Accenture, andDocumentum offer the life-sciences industry avariety of technology- or service-basedsolutions that either directly or indirectly meetlearning and training needs.
Life-Sciences IndustryeLearning Needs
Source: SRIC-BI
Many pharmaceutical companies provide financial grants to support the developmentof educational offerings, including eLearning courses, for doctors and other medicalprofessionals. Such educational sponsorship has become more common in recent years
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because regulatory policies now restrict the ways in which companies can promote theirbrands (in the past, for example, pharmaceutical companies liked to promote their brandsby paying for doctors to attend conferences). CME requirements in the United States varyfrom state to state but typically range from 12 to 50 hours per year for license renewal—although today only a small fraction of professionals meet this requirement througheLearning, whether such learning is available at no charge or for a fee. As instructionaldesigners begin to provide more engaging and more interactive content (and to use morerich media as more users gain broadband access), eLearning will become a greater part ofCME than it is today.
eLEARNING COURSE IN CLINICAL MANAGEMENT OFNEUROPATHIC PAIN
Beth Israel Medical Center has accreditation to offer continuing medical education for physicians. One of its
eLearning courses offers problem-based, interactive instruction in the clinical management of neuropathic pain.
The innovative learning module demonstrates how to assess a patient with neuropathic pain, how to develop a
clinical strategy, and how to select an initial therapeutic strategy.
In the module, learners review a comprehensive assessment of a patient with neuropathic pain and formulate
an initial treatment strategy. The lesson has three phases:
• Learners review the patient’s history before the present pain complaint and then review the history of the present
illness. They have access to expert opinions about the specific patient and to didactic content about pain
assessment in general.
• Learners formulate an initial treatment strategy by selecting from a list of possible treatments. During this
phase, they have access to expert opinions, commentary, and descriptions of each treatment option.
• Learners receive feedback on each of the treatments they selected. They can revise and resubmit their treatment
plan if they wish, but the system does not require them to do so.
Throughout this module, health-care professionals can “consult” members of the Department of Pain
Medicine and Palliative Care, including physicians, a psychologist, and a social worker. The learner needs a
Windows Media Player to view the video clips in the module.
Selected Content PlayersA large number of companies provide eLearning content for the life-sciences industry,and some of these players are part of large corporations that serve multiple markets andcustomer groups. One such player is Thomson American Health Consultants, whichoffers nurses and doctors a range of online educational resources. However, most of theeLearning-content companies that serve the life-sciences industry, including the ones weprofile in this section (see Table 3), are quite small. (Small companies are characteristicof the eLearning-content industry in general. SkillSoft—which merged with Smartforcein 2002—is the largest content developer, with 1300 employees and annual sales of
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$102 million.) Because these content providers often serve very large clients, especiallythe global pharmaceutical companies, contracts for a large suite of eLearning courses canexceed $1 million and thus represent a significant share of these firms’ total annualrevenue. This situation and the fact that most life-sciences companies are likely toaccelerate their internal deployment of eLearning (because most of them have hadrelatively low adoption until today) mean that content developers with strong capabilitiesand relationships to major players in the life-sciences industry could enjoy significantgrowth in the next few years.
Table 3CONTENT DEVELOPERS IN THIS REPORT
Company Web SiteNumber ofEmployees
Sales(Millions
ofDollars) Description
HealthStream www.healthstream.com 175 15.8 • Provides products and services tohealth-care, pharmaceutical, andmedical-device companies
• Focuses on eLearning content,ASP-*based products, and installedlearning-management products
VitesseLearning
www.vitesselearning.com 60 — • Formed in 1998 to design coursewarefor life-sciences employees and salesrepresentatives
• Has a particularly strong relationshipwith Johnson & Johnson
Medsn www.medsn.com 80 5 • Was formerly Medschool.com, a portalthat focused on the professionaleducation of medical students,residents, and physicians
• Today, develops customized contentfor the life-sciences industry
GeneEd www.geneed.com 20 2.6 • Has a strong scientific staff to createcustom content for the life-sciencesindustry
• Has its strongest relationship withAstraZeneca
Etrinsic www.etrinsic.com 15 2.0 • Creates high-quality, interactive,simulation-based learning modules
• Offers strong competencyassessment, evaluation, and reportingfunctions in learning modules
* ASP = application service provider.
Source: OneSource; company sources; SRIC-BI
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HealthStreamHealthStream offers a wider range of products and services and has more clients than theother companies in this section, which explains why the company has significantly largerrevenue than do the other companies in Table 3. Although the life-sciences industry is animportant target for HealthStream, the company also serves many health-careorganizations and has a number of products that target the educational and training needsof these organizations. In addition to providing courses, it offers a comprehensivemanagement system and a variety of consulting services to meet the needs of health-careorganizations.
Although the company has learning experts who develop interactive programs, it alsoresells eLearning courses from academic institutions as well as from other eLearning-content developers, such as SkillSoft. HealthStream offers some of the courses it createsfor its customers, for which it may have had to convert traditional teaching materials intoeLearning courses, via its distribution network of more than 35 Web partners and morethan 400 hospitals.
Client projects include:
• A physician education program for AstraZeneca, via courses on HealthStream’s online-university Web site
• An online assessment tool for the 2500-person sales force of Bristol-Myers Squibb—toensure that the company’s sales force had sufficient training to sell a new drugtreatment for hypertension
• Content conversion to online courses for The Cleveland Clinic Foundation
• Creation of an interactive educational series—including video interviews with leadingexperts on cancer therapy—to help Searle build brand awareness in a field in which ithad not previously played a large role.
Vitesse LearningVitesse Learning (San Francisco, California) is an eLearning-content developer that spunoff from C3i, a company that creates, manages, and enhances customer-management andanalytical solutions for life-sciences organizations. This connection to C3i helped Vitessein its early years, enabling the company to leverage the relationships its parent companyhad built up over the years. Not only does the CEO have ties to C3i, previously serving asvice president of the training group, but the company’s Life Science Practice leader,Katie Dahler, comes with strong connections from her earlier position as manager ofKPMG Consulting’s Learning Solutions practice. Because personal relationships andconnections are often an important factor in winning deals in the life-sciences industry,Vitesse owes at least some of its success (its profitable operation) to its strongmanagement team.
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Vitesse eLearning solutions focus on sales-force training as well as internal-workforce development and have won adoption by six of the top ten pharmaceutical,biotechnology, and medical-device–manufacturing companies. The company also hasalliances with other players, such as Informa Training Partners, to develop catalogcourses for the life-sciences industry.
Client projects include:
• Online courses to help a global medical-device company conduct a virtual productlaunch. As part of the project, Vitesse created six courses that the client delivered to itssales representatives through its LMS.
• Design of a blended orientation program for district managers in a majorpharmaceutical company. The short courses—15 to 30 minutes each—focused on keytopic areas that are keys to success for district managers. Another assignment was todesign courses to help train district sales managers to be coaches for their staffs as wellas knowledgeable business strategists to meet sales goals.
• Product-knowledge courseware for a major pharmaceutical company. Vitesse had todesign ten courses with more than 20 hours of courseware to appeal to a wide range ofsales representatives who would sell to various customer types with different needs.
MedsnSome of the top executives in Medsn (Culver City, California) have held senior positionsin Oracle’s learning group, and others come with strong eLearning backgrounds in otherorganizations. Medsn has served more than 35 clients, including 15 new clients in 2003,since it began operation in 1999. Medsn’s greatest strength is its instructional and visualdesign (with award-winning medical illustrators, animators, and instructional-systemdesigners on staff), which results in highly appealing and engaging eLearning courses.One of its current projects, for Beth Israel Medical Center, will result in nine hours ofcontent for a pain-management suite of courses. Like the course we describe in the boxon page 58, the Medsn course will use problem-based instructional design. The goal is tocreate an engaging and interactive course that enables learners to take highly nonlinearpaths—thanks to a learning-object–based methodology—and to move quickly throughfamiliar materials and spend more time and effort on more difficult content.
Although Medsn serves four key markets—professional education, marketing, salestraining, and consumer education—80% of its business focuses on product knowledgeand the rest deals with technical skills. Medsn’s programs—which benefit from thecompany’s strong lineup of scientific advisers and relationships with domain experts andthought leaders from top universities—include a wide spectrum of training curricula,including basic anatomy and physiology, disease states, clinical scenarios, productpositioning, patient presentations, and physician profiling and objection handling.
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Some of the company’s projects are:
• The Enteryx Case Simulator. Medsn developed a highly interactive and medicallyrealistic simulator for Boston Scientific to instruct learners in the use of Enteryx, a newinjectable treatment for gastroesophageal reflux disease.
• A multimedia learning program to instruct medical professionals in the treatment ofprostatitis with the Ortho McNeil antibiotic Levaquin.
• A wide range of eLearning modules for the following clients: Abbott Laboratories,AstraZeneca Pharmaceuticals, Aventis Pharmaceuticals, Baxter Healthcare Corp.,Bristol-Myers Squibb Company, Eli Lilly and Company, Merck & Company, NovartisPharmaceuticals, and Pfizer Inc.
GeneEdGeneEd (San Francisco, California) has a strong scientific staff that gives the company acompetitive edge in designing courses that teach complex subjects like biotechnology(biopharmaceutical technology, bioinformatics, and genomics and proteomics) and majortherapeutics such as the cardiovascular system, the respiratory system, the gastrointestinalsystem, the nervous system, the musculoskeletal system, the kidney, the urinary system,infectious disease, and oncology. The company also has created courses to meet theregulatory and compliance needs of the life-sciences industry.
Under the leadership of its chief technology officer, John Hathaway, who has astrong technical background from Oracle’s learning group, GeneEd has embraced the useof learning objects and has developed several thousand learning objects, each of whichpresents a single concept in a two- to seven-minute animation. Today, the companydevelops all its scientific eLearning content in this learning-object methodology, thusdelivering simple integration and granular tracking of GeneEd eLearning content withincustomers’ learning-management systems. These learning objects focus on the mission-critical training issues that life-sciences organizations face every day, from R&D,clinical, manufacturing, and regulatory topics to sales training and patient education. Useof these learning objects enables the company to reuse content and lower its productioncosts.
GeneEd has sold both custom content and its catalog eLearning solutions to a largenumber of life-sciences clients. Clients include Amgen, Amersham Bioscience,Accenture Life Science, ALZA, AstraZeneca, Celera, and Genentech. Its projectsinclude:
• Online courses for Pfizer in two therapeutic areas: treatment of cardiovascular diseaseand oncology. The company created five or six courses in each therapeutic area. Usersin North America, Europe, and Asia could access the courses over the Web.
• A large suite of more than 400 hours of eLearning courses for one of its largest clients,AstraZeneca. The courses focus on six major therapeutic areas and encompass morethan 30 disease states.
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eTrinsiceTrinsic (Louisville, Colorado) is another small player with strong capability insimulation-based eLearning modules that allow learners to interact with the simulationsin a way that allows for testing, evaluation, and certification. eTrinsic’s trackingtechnology collects detailed statistics on each learner’s interactions with the simulations,with the goal of providing true proficiency measurement. The company’s adaptive-learning architecture—which conforms to interoperability standards—includes database-driven content, seamless assessments, intrapage tracking, and dynamically generatednavigation.
eTrinsic products find use in sales training, marketing and promotion, end-usertraining, customer support (via interactive reference materials and “refresher” courses, forinstance), and professional education. Because most of the learning modules are“lightweight” and Flash based, they are easy to deliver on small, mobile devices such asiPaqs. Thus, they are ideal for quick product demonstrations when sales representativeshave little time to boot up a laptop.
Examples of the company’s projects follow.
• For Edwards Lifesciences, eTrinsic designed a compelling animation of the featuresand differentiating benefits of a new mitral-valve replacement. eTrinsic designed themodule for use in trade-show booths, as well as for Web delivery. The product has twodifferentiating benefits: its demonstration of how to suture the device in place, whichrequires complex views of the heart and device, and installation of the mitral valve.
• For Welch Allyn, Inc., a major manufacturer of innovative medical diagnostic andtherapeutic devices, eTrinsic built simulation-based learning modules to train sales staffand end users, typically nurses, to use Welch Allyn equipment. The training needed tobe universally accessible and to focus on simulated use of the product.
• eTrinsic has developed a wide range of eLearning modules for use in one or more ofthe following areas: sales training, marketing and promotion, end-user training, andcustomer support. Customers include Agilent Technologies, Edwards Lifescience, EliLilly and Company, GE Medical Systems, Philips Medical Systems, GlaxoSmithKline,and a number of other life-sciences companies.
Content-Market DynamicsThe case studies in the previous section show growing use of and commitment toeLearning by companies in the life-sciences industry, and eLearning-content vendors willsee growing opportunities as a result. But at the same time, the eLearning industry hasseen slower overall growth in recent years than most people expected, and the result hasbeen strong competition and drops in prices (or at least little opportunity to raise prices)in all segments of the industry, including content.
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Limited opportunity to raise prices combined with a long sales cycle—even forrelatively small contracts—will continue to plague eLearning vendors to the life-sciencesindustry in the next few years. Success will go to companies that nurture existing clientrelationships, especially with large life-sciences companies: Deals with big players canfar exceed the $200 000 to $400 000 cost of the typical content deal in the industry.Another key to success for small content players is to build strong relationships withstrategic partners, including the leading LMS and LCMS players, large technologycompanies such as enterprise-application companies, and leading outsourcing companies(like IBM and Accenture), all of which can help bring significant new business to smallcontent vendors.
Content vendors will also need to navigate successfully the following marketdevelopments:
• Growing appeal and use of simulations. Although the high costs of some simulation-based products limit their use, interest is growing in low-end products that use Flash-based simulations. Products that allow users to interact with simulations to create“hands-on learning situations” (increasingly available for delivery on small, portabledevices), like those of eTrinsic, will likely see growing demand in the life-sciencesindustry.
• Rising interest in object-based approaches. GeneEd and Medsn have embracedlearning objects as a way to achieve more cost-effective production (through reuse ofobjects and construction of an automated assembly process that can draw on a growingnumber of objects in repositories). Learning objects also enable adaptive learning,which provides a more effective and personalized learning experience than othereLearning approaches.
• Greater blending of courses and custom content. In the past two years, manyorganizations have come to see that course content is only a small piece of their overalllearning environment. Companies now blend external content with more informalcontent by internal subject-matter experts. They’re also likely to use asynchronouscontent with live, synchronous events and work processes. These approaches ofteninvolve virtual team collaboration to generate content for learning and training. Contentvendors are wise to study this new reality and to determine how their course contentcan serve these more complex learning environments and help customers addresscritical business problems.
KEY CHALLENGES AND ACTION PLANS
In part because of considerable hyperbole and overpromising by many eLearning vendorsduring the early days of eLearning—a common phenomenon in emerging technology-based industries—eLearning customers are now both more sophisticated and moredemanding than in the past. The new eLearning reality has the following elements:
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• eLearning as one piece of the learning and training puzzle. Every company we talkedto during our research expects the role of eLearning to increase significantly in the nextfew years, although perhaps not as aggressively as ThinkEquity’s informal survey in2002 indicated. (Representatives of 13 major organizations in several industries saidthat they planned to increase their use of eLearning quite dramatically, to between 40%and 80% of all training, by 2005.) In the life-sciences companies we talked to,eLearning will play an important role, but traditional training activities will continue.The issue now is what mix of modalities and types of learning and knowledge activitiesthese companies should aim for.
• Results-oriented customers. Both users and buyers (in most organizations, the buyers ordecision makers who sign purchase orders are typically not major users) have a moresophisticated understanding of eLearning than in the past and are thus more specificand demanding in their requests for proposals. Buyers are much more intent on aligningeLearning with key business goals and objectives than they were just a few years ago.
• Greater enterprise and even extended-enterprise focus. Learning and trainingoperations and activities are still highly fragmented and distributed in mostorganizations—across departments, divisions, business units, and national borders—butdecision makers increasingly recognize the need for a more enterprisewide perspective.As a result, a growing number of organizations have established, or are creating,coordinating units that can improve cross-unit communication and collaboration inlearning and knowledge activities, particularly in the use and acquisition of eLearningtools and technologies. We also see emerging interest in leveraging eLearning tocustomers and business partners.
• Integration of systems and platforms. The tools, technologies, and systemsinfrastructure necessary to support eLearning require greater coordination andintegration in most organizations. Integration can improve the cost efficiencies andeffectiveness of the underlying infrastructure. The good news is that a number of the ITgroups in companies we talked to are cognizant of the need for their emergingtechnology infrastructure to support both KM and eLearning activities across theirorganizations.
ChallengesMany challenges confront both users and vendors, and success will require considerablehard work and an enlightened attitude toward learning and the role of technology. Thediscussion below highlights some of the key challenges facing users and vendors in thenext year or two.
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Users
• Demonstrating business value. For both current and planned eLearning projects,eLearning teams will need to demonstrate a strong connection between theirorganizations’ business problems and eLearning projects. They need metrics that canshow at least a correlation—or, ideally, a causal relationship—between changedbehavior and business-performance results and eLearning projects. One approach mightbe for eLearning professionals in the HR department to consult with other groups toensure closer links between eLearning and key business issues, as Roche Diagnosticsplans to do.
• Creating better awareness and understanding. Although most organizations thatparticipated in this project are increasingly aware of and interested in eLearning—witha significant commitment to eLearning by senior executives in some cases—theeLearning teams in most life-sciences companies need to continue, and even expand,their marketing and promotion of eLearning. eLearning proponents cannot afford totake people’s support and use of eLearning for granted.
• Designing plans and architectures. Many organizations need to develop an effectiveand comprehensive strategic plan for enterprisewide eLearning and to develop adetailed eLearning architecture or blueprint to guide future eLearning deployment. Astools and technologies proliferate, and as coordination across a large number oforganizational units becomes a key to successful enterprisewide implementation, aclear and well-designed architecture becomes increasingly important. Creating such anarchitecture and gaining buy-in by the key constituencies are hard work, but a growingnumber of organizations have moved down this path or are ready to do so.
eLearning Developers
• Demonstrating understanding of customer context. As customers become moresophisticated and demanding, vendors must work harder to win new projects. Vendorsneed to gain a better and deeper understanding of customers’ business issues—and tosee eLearning in the context of each customer’s industry and organizational setting. Anumber of eLearning companies have a good understanding of this new challenge andare taking steps—including setting up internal consulting operations—to build theirunderstanding and expertise. Others are taking an “account-management” approach totheir business, trying to build strong, longer-term relationships with a relatively smallnumber of major clients—and thus becoming intimately familiar with their needs.
• Recognizing the big picture and the constituent parts. Most eLearning companies cantackle only one piece of a much bigger problem that a client is trying to solve and thusface the challenge of demonstrating maximum value of their piece within the largereLearning program and in relation to other elements. Successful vendors willdemonstrate their understanding of the “big picture” but also advise clients that arecreating overall eLearning architectures, demonstrating clearly how the vendors’
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solutions fit within the overall architecture and with clients’ longer-term plans. As thenumber of tools and technologies multiplies, and as customers’ business problemsbecome more complex, vendors that see the big picture, both as it is today and as it islikely to evolve over time, can become valuable allies to clients. Building a dialoguewith a client can be the first step toward a stronger, more strategic relationship. Anumber of eLearning vendors now see such relationships as key to their businesssuccess.
• Helping demonstrate value. Just as eLearning teams in organizations are increasinglytrying to demonstrate value to decision makers, vendors must demonstrate the value oftheir products and services to win over increasingly demanding buyers. By bringing incredible (in-depth) case studies and reference cases, vendors can help customers’eLearning teams demonstrate the ability of eLearning projects to produce results,increasing the odds of gaining executive support and seeing successful deployment.Vendors that have experience with a variety of customers need to leverage thisexperience and their understanding of how to create value and help eLearning teamscommunicate and demonstrate such value creation to sponsoring executives.
• Finding a balance between buying and making. A growing number of organizations,and many of the life-sciences companies we interviewed for this study, have content-development teams and some staff members with instructional-design expertise. Theirchallenge is to produce as much high-quality content internally or with the help ofexternal organizations as they can within constrained budgets. Some of theseorganizations hope to create a growing share of their learning content internally, so thatthey can customize it and meet company-specific needs without paying the high costsof hiring external developers to do it. Content-development companies can work withtheir clients to meet these goals. Especially within large pharmaceutical companies,finding the right “make-buy” balance is not incompatible with vendors’ findingsignificant project opportunities and helping clients create high-end content.
Action PlansEven relatively small projects require careful planning to ensure successfulimplementation, but planning is even more important for large projects. As companieslook toward enterprisewide deployment of eLearning, development of implementationplans and effective coordination of groups and business units are crucial. Plans must alignwith those of other groups in the enterprise, especially those of the IT organization, whichtypically plays a key role in the rollout of eLearning projects. But as integration ofeLearning and KM grows, eLearning action plans must also coordinate with KMinitiatives across the organization.
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Users
• Forming an eLearning-coordination unit. For organizations that have not yetestablished a unit to coordinate eLearning activities—either a formal workingcommittee or a more informal community of practice—this action step is worth seriousconsideration. A number of life-sciences companies have established communities ofpractice as a way for eLearning professionals in different parts of their companies(which are often widely distributed geographically) to collaborate, share best practices,and coordinate the selection and use of new tools and technologies as well as newpolicies and procedures.
• Creating a business-value task force. To find ways to demonstrate value to seniorexecutives and to find appropriate metrics and statistics to show the relationshipbetween eLearning activities and business performance, companies are wise toestablish a working group to lead and coordinate this work. The group should alsoexamine current best practices and establish dialogues with some of the most advancedand interesting eLearning practitioners. Among the organizations that have conductedreturn-on-investment analyses—at varying levels of detail—are Accenture, DowChemicals, the U.S. Department of Justice, and IBM. (In addition, Thomson hasanalyzed the effectiveness of blending eLearning and classroom-based approaches.)
• Evaluating content authoring. Most companies continually monitor their needs for neweLearning content and determine whether internal-subject matter experts and thecompany’s own eLearning staff should create it or whether they should bring inexternal content or resources. These decisions depend on what authoring tools areavailable: Inexpensive and easy-to-use tools favor internal content creation. Productslike Articulate (see www.articulateglobal.com) and Breeze and Contribute fromMacromedia (see www.macromedia.com) simplify the authoring, delivery, andmanagement of rich-media content, and new products are entering the market everyyear. Growing use of Web logs (or “blogs”) inside companies, including use in projectteams and communities of practice, is also promoting informal content generation,raising questions about the desired balance between formal and informal learning—andhow to support each. Finally, increased use of synchronous eLearning platforms, forlive eLearning events—using Centra, WebEx, Interwise, and other products—is fillingarchives with content that users can access on demand at any time. Companies nowstore PowerPoint- and video-based materials in repositories that allow for easy search,and companies like Cisco see growing use of such materials by subject-matter experts(see LoD Bulletin, Third Quarter 2003, for a description of Altus Learning Systems’swork with Cisco in this area).
eLearning Developers
• Building industry and functional expertise. A number of eLearning developers we havetalked to see a need to build stronger and deeper understanding and expertise inparticular industries or functional areas, so that they can effectively design eLearning
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solutions that meet clients’ specific needs. A great deal of eLearning content in the life-sciences industry is custom content that developers create to meet industry- orcompany-specific needs, although some generic, off-the-shelf courses find use for basicIT or business training. To meet the need for customization, eLearning developers arebuilding internal consulting teams with strong industry/functional expertise that can“talk the language” of customers and thus gain credibility and design effectivesolutions. Developers can also focus sales and marketing attention on a few majorindustries and clients rather than pursue any opportunity that emerges.
• Educating clients about object-based learning. Companies in the life-sciences industryare interested in using learning, information, and knowledge objects in eLearningprograms—partly because they hope to reuse or rechannel content to various uses(including customer education) and delivery platforms (including PDAs). However,most companies are still in the early phases of adopting object-based approaches andthus could benefit significantly from the experience that eLearning developers havegained over the years in building object-based eLearning content. Understanding theadvantages and disadvantages of different technology tools and platforms is alsoincreasingly important given that clients now want to integrate new technologies withother enterprise systems.
• Helping clients build eLearning architectural frameworks. Companies recognize theneed to create eLearning architectural frameworks to guide their longer-termimplementation efforts. As eLearning projects increasingly extend beyond smalldepartments and divisions to more enterprisewide efforts—although most companiesare in the early phases of such implementations—such frameworks and project plansbecome essential. eLearning vendors that have a good understanding of how otherpractitioners have developed and implemented eLearning architectural frameworks canleverage their experience to build stronger client relationships. In such relationships,both vendors and clients gain new insights. Moreover, vendors build strong consulting-service capabilities, which in turn form the foundation of longer-term relationships andbetter account relationships. Most pharmaceutical companies are very large, global, andconservative organizations that are relatively new to eLearning, so they offersignificant future opportunities to eLearning vendors that can build credibility with theeLearning teams and executive sponsors in these companies. eLearning vendors withstrong education and advisory services will likely have an important competitive edgein the life-sciences industry.
