November 30, 2004 10:00 am PT
Outsourcing the Training Function:
A Growing Trend
Facilitators:
Brandon Hall, Ph.D.
CEO/Lead Researcher
(408) 736-2335
info@brandon-hall.com
A.G. “Buzz” Bainbridge
Managing Director
Associates and Channels
The TRACOM Group
buzz.bainbridge@reedbusiness.com
The INs and OUTs of Outsourcing:
Questions We’ll Answer
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Why outsource?
Who are the major players?
What are their value propositions?
Where do I start?
How do I manage outsourcing…and
expectations?
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Why Outsource?
• Main goal: minimize fixed costs
• Fixed costs vs. variable costs
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Other Drivers
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Save money and track costs
You’re swamped
Desire for consistency
Link learning with business strategy
Lack of resources
Lack of expertise
Integration woes
Keeping up with technology
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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
shouldn’t do •it.
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Learning from Case Study: Reasons for
Outsourcing
• Just driving costs out?
• Shift from ILT to e-learning?
• Expand capabilities?
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What Do Outsourcing Companies Do?
As little or as much as you need
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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
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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
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The Players
• Accenture
Learning
• Intellinex
• Convergys
• Intrepid Learning
Solutions
• Exult
• KnowledgePlanet
• General Physics
• Raytheon
Professional
Services
• IBM
• ACS
• GeoLearning, Inc
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Accenture Learning - NYC
• Full outsource
• Business interlock
• Global reach and scale
• Major clients
Avaya
GE Consumer Finance
Citrix
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Convergys - Cincinnati, OH
• HR-Outsourcing + Training
• DigitalThink acquisition
• Offshore content development
• Major clients
Circuit City
State of Florida
State of Texas
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Exult – Irvine, CA
• HR-Outsourcing + Training
• Acquired by Hewitt
• SumTotal Systems installations
• Major clients
British Petroleum
McKesson
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General Physics – Elkridge, MD
• Early contract with GM
• Full learning outsource
• ISO 9000:2000 registered
• Major clients
Ford Motor Company
Texas Instruments
Pfizer – new contract
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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
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Intrepid Learning Solutions – Seattle, WA
• New business launched with Lguide
• Privately held
• 100% focused on training outsourcing
• Major client
Boeing
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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
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Raytheon Professional Services – Dallas, TX
• Trained US pilots in the 30’s
• Auto industry trng – NA, Europe, Asia-Pac
• Global scale and reach
• Major clients
GM
Lockheed Martin
ChevronTexaco Corporation
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ACS, Inc – Dallas, TX
• IT Outsourcing roots
• ILT into e-learning
• HR with training outsourcing
• Major clients
Motorola
Goodyear Tire & Rubber Company
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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
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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
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What vendors claim vs. what you can expect
• Claimed: 50% reduction in costs
• Expect: 10-15% reduction
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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
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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
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Costs Involved with Outsourcing
• Basic formula:
– The outsourcing vendor often may base the
cost on anticipated savings
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Typical Timeframe
• Needs assessment: several months
• Implementation: typically 2-6 months
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Where do I start?
• Do your homework:
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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.
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Learning from Case Study: Outsourcing Led
to Strategy Change
• Major shift: commissioned sales force vs.
hourly
• Better customer service
• Savings estimated at $130 million
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Will People Lose Their Jobs?
• Staff reduction is common with
comprehensive outsourcing
• While layoffs are often perceived as bad
for people, it’s good for the company
• It’s common for some staff to be absorbed
by the vendor to assist with multiple
outsourcing projects
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Benefits of a trial project:
• Less money invested
• Less time invested
• Opportunity to reevaluate goals
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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)
• Don’t underestimate the importance of the
relationship
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Managing Your Organization: Things to Do
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Get buy-in from executive level
Assign a gatekeeper
Keep control of your strategy
Hold on to your intellectual property
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Learning from Case Study: Benefits of Buyin
• CEO was among the first to take the new
courses
• Other departments are eager for e-learning
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Conclusion
Outsourcing – Fad or here to stay?
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More Info: www.brandon-hall.com
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