Business Intelligence

Published November 2008

New Investment Priorities Emerge in Technologies and Services

Cushing Anderson

As organizations and their learning functions tighten their belts, they’re going to get much more selective about how they spend their money. Here’s a look at how learning industry spending is shaping up.

Investments in learning technologies and services are growing slightly in 2008 as compared to 2007 budgets, though the growth is slow and many companies expect to maintain spending levels. Investments in learning technologies are a priority over learning services, particularly for learning management systems (LMS) and workforce performance management (WPM) systems.

WPM appears to be the up-and-coming investment area in the learning portfolio. In learning services, needs-assessment services have become a top priority as companies increasingly seek to target and improve learning programs.

Every other month, IDC surveys Chief Learning Officer magazine’s Business Intelligence Board (BIB) on a variety of topics to gauge the issues, opportunities and attitudes that are important to senior training executives. For the past several years, members of the Chief Learning Officer magazine Business Intelligence Board have been asked to provide annual insight into their investment choices. This month, we’ll examine how companies are investing their training dollars in certain learning technologies and services, and whether spending on training is expected to increase or decrease in 2008 and 2009.

Training Budgets Grew Slowly in 2008
Training budgets remain on a slow growth trajectory, as has been the case for many years. In fact, a third (34 percent) of companies reported little or no change in training and development spending from 2007 to 2008. Forty-two percent of companies had or expect an increase in spending from 2007 to 2008, while 23 percent of companies had or expect budget decreases.

In spite of a challenging economic environment, significantly more companies had budget increases in 2008 than in 2007. And while there were also more companies with decreasing budgets, there is strong evidence enterprises are spending more on training in 2008 than 2007.

The trend for changes in training budgets looks very similar for 2009, although many companies are unsure of the direction of training budgets for next year. The same percentage of companies, 42 percent, expect spending increases, but only 15 percent expect decreases in spending. A third (35 percent) of companies expect spending to remain the same.

It is unclear from the data whether the majority of companies have several years of increasing or decreasing investments in training, whether companies tend to recover their budget increases after a year of decline or vice versa.

Key Investment Areas
CLOs continue to use their training dollars efficiently, spending on highly important areas that offer fast and visible results. Figure 3 shows which areas of the training investment portfolio are expected to grow significantly (more than 15 percent) from 2007 to 2008.

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