November 28, 2003

JCPenney saves $12 million by shifting training initiatives to OneTouch interactive solution

Since the rollout began in 1996, JCPenney has been able to save more than $12 million in travel and lodging costs alone. Other benefits include an acceleration in the time required to deploy new systems and procedures, and a consistency of messaging.

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Distance Learning Makes the Grade

JCPenney saves $12 million by shifting training initiatives to OneTouch interactive solution

By Susan Reda

Deborah Masten remembers when JCPenney flew its new managers to the company�s Plano, Texas, headquarters for training. While training was held two or three times each year, the company promoted individuals to manager positions throughout the year. It was conceivable that someone promoted in April didn�t attend a workshop for five months.

�By the time we got them here for training, some had already picked up practices that were not in keeping with our policies. The processes and procedures that they were not doing correctly had to be unlearned or relearned,� recalls Masten, the retailer�s vice president and director of human resources communication and development. �Over and over again, we�d hear a chorus of �I needed this back when ... ��

With more than 1,000 stores and tens of thousands of employees, it was impossible to train 100 percent of the retailer�s staff each year. New systems and programs were often launched before associates company wide could be trained.

In late 1995, an interactive distance learning (IDL) program supplied by San Jose based OneTouch Systems caught Masten�s eye. Billed as a training solution that supports timely, cost effective corporate learning and allows an organization to simultaneously reach, train, communicate and collaborate with employees across the enterprise, Masten quickly recognized its potential value for JCPenney.

With a direct broadcast satellite network already in place throughout the chain, testing the OneTouch solution was relatively painless. After just a few months, Masten was convinced that it would work for JCPenney. By cutting out travel expenses and eliminating the need to print and distribute reams of materials, the company was able to pay for needed equipment and begin the transformation to IDL. It took just 15 months for JCPenney to achieve a return on its investment.

Since the rollout began in 1996, JCPenney has been able to save more than $12 million in travel and lodging costs alone. Other benefits include an acceleration in the time required to deploy new systems and procedures, and a consistency of messaging.

�The hallmark of the OneTouch solution is that it�s just down the hall, just in time and just enough,� says Masten. �Using OneTouch allows us to take a modularized approach to training. Associates learn what they need to improve their specific job skills, but they don�t have to be away from their jobs to train.�

SIGNIFICANT SAVINGS
Dennis Bertken, chairman and CEO of OneTouch Systems, notes that JCPenney�s experience is in step with the results reported by other retailers that have deployed the solution, including Safeway, Albertsons, Walgreen and Kmart.

�OneTouch can effectively address a retailer�s need to connect large groups of individuals across the country � or throughout the world, for that matter � who need to interact with an individual instructor during a training session or corporate presentation,� Bertken says, calling attention to the system�s scalability. �IDL provides a more cost effective and efficient means for delivering custom content to remote employees at all levels.� He claims that other solutions, such as video conferencing and web meetings, are not as well suited for training.

�Because the OneTouch system is interactive, it models face to face training,� Bertken explains. �Companies have expanded its use beyond training. They�re using it to launch major marketing and service programs, communicate new procedures, share best practices and enhance store level execution across the organization. The ability to take action at the corporate level and rapidly achieve the desired effect in the stores delivers significant cost savings for large retailers.�

Bertken maintains that prior to OneTouch, it took most large retailers three to four months to roll out a new program. The lion�s share of that time was spent training one large group of individuals, then flying them to various stores or regional locations to spread the news. Using OneTouch, retailers can train associates across the enterprise in just a few weeks, according to Bertken.

�Retailers can move from rolling out three or four new initiatives per year to introducing as many as 13 or 14 new programs, depending on how quickly associates can assimilate new information,� says Bertken. �It gives retailers the ability to respond to market conditions and implement new procedures more rapidly than in the past.� In addition, eliminating the multiple steps that were once needed to communicate a new procedure vastly improves the consistency of messaging.

REAL TIME INTERACTION
The OneTouch solution combines full motion video, full duplex audio and two way data interaction, allowing companies like JCPenney to simultaneously reach employees in a networked classroom or at a desktop PC from a single broadband network location using a single server. The solution provides for real time interaction and collaboration between instructors and students using interactive touch pads. Those accessing the learning program by means of a desktop PC interact using the keyboard.

Earlier this year OneTouch introduced a new service called On Demand to the retail industry. On Demand allows retailers to capture live content and cost effectively re purpose that content in a dynamic, on demand environment.

�It allows them to turn what was a live presentation or training class into an asset that can be accessed by any employee at his convenience,� Bertken explains. �In a retail setting, it�s almost impossible to take all the managers off the selling floor at once for them to hear a live broadcast. On Demand allows these managers to participate in that broadcast at a time that makes sense.� The questioning and test results from the On Demand sessions are sent back to the corporate training group for evaluation, just as in a live event.

A majority of the sessions produced by JCPenney originate from a studio at the retailer�s headquarters. Store associates can watch the instructors live on a classroom TV and interact by keying a Yes/No or A B C D response into the touch pad, which facilitates two way audio and data exchange between participants and instructors. The system allows Masten and her team to measure the effectiveness of the sessions and establishes accountability among associates.

There were some growing pains in the beginning, according to Masten, who recalls senior managers voicing concern that television was too passive a medium and that encouraging interaction would be difficult. That concern quickly diminished, and today Masten reports that the HR department is now viewed as a business partner, helping the various business segments, backing the brands and supporting systems training.

�The OneTouch system has helped JCPenney to save money, but well trained associates and managers help the company meet its performance goals. This is not something that is operated separately from the business. It�s part of it,� she adds. Currently the solution is being used in all stores and by every business group, from telemarketing to catalog to logistics.

TAKING STOCK
Masten has collected numerous examples of the OneTouch system�s value. At one point, JCPenney was in the throes of instituting a new pricing change. Masten conducted a pre test and a post test to evaluate the effectiveness of the session.

�Of the 1,000 associates who participated, it was clear from the post test that 40 managers had missed the point. We reconnected with those 40, emphasizing the key points we were trying to communicate,� recalls Masten. �Once those 40 were on board, those stores alone reported savings in excess of $20,000.�

About a year ago, JCPenney made what Masten describes as a fundamental change to the retailer�s catalog business. In that instance, the OneTouch solution was used to reach some 2,000 people with two instructors conducting the session.

�We had scheduled for one hour of time, but as we neared the 60 minute mark, we had 300 people who wanted to ask a question,� recalls Masten. �We told those associates to e mail their questions and we would get back to them. Once we consolidated the questions, we scheduled a follow up meeting. It�s a flexible approach that allows interactive learning while managing employees� productivity.�

Not all distance learning sessions are mandatory, but time and again the retailer has found that training yields results. For example, Masten and her team developed a program to coincide with this year�s annual men�s Shopping Spree. The instructor covered product know how and trends and discussed selling behavior. Much to her disappointment, however, only 200 store associates signed on for the training.

After the event, Masten compared sales at the stores that had a participant in the session against those that didn�t. Stores that took part in the distance learning had a 5.6 percent sales gain, exceeding the company average.

Having used the OneTouch system for nearly eight years now, JCPenney managers have become quite creative at coming up with unique ways to explore its potential. �There are times when our regional managers will go into studios and conduct a business meeting for the stores in their region. They�ve become very self sufficient. It�s just a matter of our instructors turning on the lights, cameras, and so forth, and we help design, develop and construct their own presentations,� explains Masten. When a regional session is conducted, the company can isolate the broadcast exclusively to the intended stores and tune others out.

This year, JCPenney developed its own version of virtual TV. Masten and her team visit stores where the company has identified a top performing sales associate in a particular product category. �Using a video camera that sits inside a special handbag, we pretend to be a customer and approach the top sales associate,� explains Masten.

�We let her go through the whole sales pitch. Then, when it�s all over, we bring the store manager and the sales associate in on the charade. With the employee�s permission, we interview her on tape, letting her explain her thought process and why she adopted a certain approach. It�s been well received, and we�ve seen measurable results,� she says. �Associates respond to seeing how another colleague successfully handles a sale.�

When a course is completed, the OneTouch system is configured to write it to the employee�s training transcript. Now when business managers visit a store, they can quickly determine how many associates have completed a certain training program.

�Having a training transcript is somewhat unique, and we feel it positions us as a leader among Fortune 500 companies,� says Masten. JCPenney doesn�t link the training transcript to merit increases, yet Masten is convinced that the OneTouch solution has enhanced associates� performance and increased retention.

Posted by Craig at November 28, 2003 04:25 PM