PMI’s journey to $2.5m in language training savings

It’s not a big secret that we’ve been talking a lot about language vendor costs, how much organizations typically spend on language training, and how exactly organizations can minimize those costs for significant savings across your organization.

The good news is that we not only put a lot of stock into these cost-savings measures, but we have also seen them at work in our customers’ businesses. One of our most recent examples of this process producing real-world results is Philip Morris International (PMI).

PMI’s transformation journey fueled by scrutinizing spending habits.

If you’re not aware of PMI’s organization-wide transformation, it’s worth a Google. In recent years, they have been investing plenty of resources into building brand-evolving smoke-free products to propel their organization to the next natural brand evolution. But as any transformational journey goes, it all starts with a little self-reflection.

As a result of this inward-looking organizational analysis, PMI started to take a good look at accustomed spending habits and began to see clear areas where they could save big on vendors—particularly across their L&D expenses. Realizing these cost savings and re-allocating those freed-up expenses can help fuel a brand transformation.

“We’re investing billions in building a smoke-free future. That means we need to be smart about how we spend our money. By coming together to deploy a digital world language training solution, each year we realize massive savings to reinvest in PMI’s transformation. At the same time, making language learning accessible for all colleagues, everywhere.”
Mike Gower
Head of Capability & Supplier Management at PMI

Further analysis revealed that PMI was spending big on language training across hundreds of suppliers with various, disparate learning models.

It quickly became clear that they needed to reimagine how they invested in language training across their organization.

Embracing a new approach to language training worldwide.

As a company, PMI wanted to solve their language training expense challenges by investing in three major opportunities:

Reduce frontline training costs by shifting from face-to-face to online learning
Streamline global language suppliers to reduce cost and language learning complexity
Scale training across the organization to meet the learning needs of any employee—whether they worked in an office or in the field

PMI quickly moved to apply two guiding principles in its search for a refreshed approach to employee language training: aggregation of the global needs and make better use of digital learning. PMI forged a new strategic partnership after measuring Rosetta Stone against well-defined success criteria including cost, functionality, and ease of contracting. A new learning model was set to democratize online world language training for all employees.

The three-pronged impact of PMI’s language training consolidation effort.

PMI continues to make the language investment in its global workforce by empowering them to build critical, new collaboration skills.

By partnering with Rosetta Stone, employees can access 24 languages and more than 7,000 hours of interactive language content—all at the place and place of their employees choosing.

As a result of this effort, PMI saw three major areas of cost savings:

$2.5 million in annual savings against a $1 million annual target. This resulted in a c.5% reduction in language spend, allowing them to reinvest in critical brand transformation initiatives.
By removing unnecessary suppliers, they were also able to remove unproductive invoice administrative costs and save $182,000 annually.
Finally, by consolidating to a single language vendor in Rosetta Stone Enterprise, they effectively scaled language training solutions from 2,000 learners annually to 77,000 permanent employees and contractors worldwide.