Outsourcing%20the%20Training%20Function:%20A%20Growing%20Trend

1
Outsourcing the Training FunctionA Growing Trend
November 30, 2004 1000 am PT

• Facilitators
• Brandon Hall, Ph.D.
• CEO/Lead Researcher
• [phone]
• info_at_brandon-hall.com
• A.G. Buzz Bainbridge
• Managing Director
• Associates and Channels
• The TRACOM Group
• buzz.bainbridge_at_reedbusiness.com

2
The INs and OUTs of Outsourcing Questions Well
Answer

• Why outsource?
• Who are the major players?
• What are their value propositions?
• Where do I start?
• How do I manage outsourcingand expectations?

3
Why Outsource?

• Main goal minimize fixed costs
• Fixed costs vs. variable costs

4
Other Drivers

• Save money and track costs
• Youre swamped
• Desire for consistency
• Link learning with business strategy
• Lack of resources
• Lack of expertise
• Integration woes
• Keeping up with technology

5
Do I have any other options?

• Revamp your existing learning strategy
• Corporate shared services
• Outsourcing must be the best solution for the
  problems you face, or you shouldnt do it.

6
Learning from Case Study Reasons for Outsourcing

• Just driving costs out?
• Shift from ILT to e-learning?
• Expand capabilities?

7
What Do Outsourcing Companies Do?

• As little or as much as you need

8
Levels of Outsourcing

• Levels range from
• . . . the simplest and least risky,
• . . . to the most complex and expensive
• Out-tasking
• Administration and Support (back office)
• End-to-end Training Outsourcing

9
Value Proposition Why Executives are Interested

• Cost savings
• Vendor management
• Content development
• Fixed costs
• Latest technology for network and e-learning
• Learning and business expertise
• Core competency

10
The Players

• Accenture Learning
• Convergys
• Exult
• General Physics
• IBM
• ACS

• Intellinex
• Intrepid Learning Solutions
• KnowledgePlanet
• Raytheon Professional Services
• GeoLearning, Inc

11
Accenture Learning - NYC

• Full outsource
• Business interlock
• Global reach and scale
• Major clients
• Avaya
• GE Consumer Finance
• Citrix

12
Convergys - Cincinnati, OH

• HR-Outsourcing Training
• DigitalThink acquisition
• Offshore content development
• Major clients
• Circuit City
• State of Florida
• State of Texas

13
Exult Irvine, CA

• HR-Outsourcing Training
• Acquired by Hewitt
• SumTotal Systems installations
• Major clients
• British Petroleum
• McKesson

14
General Physics Elkridge, MD

• Early contract with GM
• Full learning outsource
• ISO 90002000 registered
• Major clients
• Ford Motor Company
• Texas Instruments
• Pfizer new contract

15
IBM Learning Services Armonk, NY

• Acquired PWC Consulting
• Full learning outsource w/ global reach
• Lotus Learning Management System
• Align learning with strategy
• Major clients
• eArmyU
• Cingular
• Swedish Railroads

16
Intrepid Learning Solutions Seattle, WA

• New business launched with Lguide
• Privately held
• 100 focused on training outsourcing
• Major client
• Boeing

17
KnowledgePlanet Mechanicsburg, PA

• Hosted enterprise learning suite
• Training back-office operations
• Running Training like a Business
• Major clients
• BMW Financial Services
• Marsh, Inc
• ChevronTexaco Corporation

18
Raytheon Professional Services Dallas, TX

• Trained US pilots in the 30s
• Auto industry trng NA, Europe, Asia-Pac
• Global scale and reach
• Major clients
• GM
• Lockheed Martin
• ChevronTexaco Corporation

19
ACS, Inc Dallas, TX

• IT Outsourcing roots
• ILT into e-learning
• HR with training outsourcing
• Major clients
• Motorola
• Goodyear Tire Rubber Company

20
GeoLearning, Inc. Des Moines, IA

• IT Outsourcing roots
• GeoLearning platform
• E-learning expertise
• Major clients
• State of New Jersey
• U.S. Office of Personnel Management

21
Example Outsourcing Training or HR?

• Many companies offer bundling so both functions
  can be outsourced
• Potential cost savings if HR is outsourced
• Potential cost savings if training is outsourced

22
What vendors claim vs. what you can expect

• Claimed 50 reduction in costs
• Expect 10-15 reduction

23
Learning from Case Study Circuit City

• First initiative 50 courses
• HR system was integrated with delivery platform
• Trainees found courses fun and worthwhile
• Costs were cut significantly average training
  time cut from 200 hours to 68
• Accessible courses motivated employees to
  complete more training

24
Case Study Avaya and Accenture Learning

• Delivery of learning in 90 countries
• LMS and portal up in 4 months
• 200 Avaya staff joined Accenture Learning
• Portion of training that is e-learning
• 23 before vs. 81 now
• Time for learners to become proficient
• 60 less time now

25
Costs Involved with Outsourcing

• Basic formula
• The outsourcing vendor often may base the cost on
  anticipated savings

26
Typical Timeframe

• Needs assessment several months
• Implementation typically 2-6 months

27
Where do I start?

• Do your homework
• Calculate current costs
• Identify your learning strategy
• What are corporate objectives?
• How will you measure the objectives?
• Hint Let the vendor help you do the assessment.

28
Learning from Case Study Outsourcing Led to
Strategy Change

• Major shift commissioned sales force vs. hourly
• Better customer service
• Savings estimated at 130 million

29
Will People Lose Their Jobs?

• Staff reduction is common with comprehensive
  outsourcing
• While layoffs are often perceived as bad for
  people, its good for the company
• Its common for some staff to be absorbed by the
  vendor to assist with multiple outsourcing
  projects

30
Benefits of a trial project

• Less money invested
• Less time invested
• Opportunity to reevaluate goals

31
Managing the Vendor Things to Know

• What you want (cost savings or improvement to
  performance?)
• That the deal is negotiable after the analysis
  phase (both client and vendor)
• Dont underestimate the importance of the
  relationship

32
Managing Your Organization Things to Do

• Get buy-in from executive level
• Assign a gatekeeper
• Keep control of your strategy
• Hold on to your intellectual property

33
Learning from Case Study Benefits of Buy-in

• CEO was among the first to take the new courses
• Other departments are eager for e-learning

34
Conclusion

• Outsourcing Fad or here to stay?

35
More Info www.brandon-hall.com