To really get the full impact outsourcing is having on the industry, it helps to understand what the term means today, why learning outsourcing is a strategic imperative for many companies and how to prepare for what might be inevitable for your organization.
Success Breeds Success
Outsourcing is no longer a trend. Rather, it is quickly becoming a strategic tool savvy CLOs use to gain greater efficiencies in the deployment of talent, the administration of costs and to increase the “expertise” of the learning organization. The buy side is beginning to recognize true performance gains, not just cost reductions. The sell side is learning how to deliver value and increase the bottom line, which inevitably leads to market growth. As a result, more value is being generated for both sides.
In its report, “U.S. Training Outsourcing Services 2006-2010,” IDC forecasted a 24.5 percent, five-year compounded annual growth rate, meaning this market will grow from an estimated $1.86 billion today to a little more than $4.04 billion in 2010. We are already well on the way.
According to Training Magazine’s “2006 Industry Report,” 44 percent of companies indicated they outsource instruction, with upward of 30 percent outsourcing content development or some portion of their learning operations to a hosted technology provider. It is no surprise, then, IDC predicts training outsourcing will grow from representing 9 percent of the entire learning market to a little more than 15 percent during the next three years.
But what does training outsourcing mean to businesses today? It no longer refers to situations in which you use a vendor to provide training support such as developing a course.
Today, we talk about learning outsourcing from the strategic business perspective. “Business process outsourcing,” as applied to outsourcing the specific processes and activities associated with learning, is best defined as the re-engineering of the supply chain of processes and resources for knowledge-based activities, integrating internal and external talent to gain efficiencies in learning and knowledge dissemination.
Experience has taught companies that most successful ventures are based on outsourcing a complete business process or entire business function. This requires assessing the learning outsourcing requirements from both the strategic and process standpoints.
Companies can use specific frameworks to assess how both process and strategic implementations are critical components to planning and management solutions.
Richard Klingshirn is the executive managing director of ACS Global Learning and is responsible for leading the learning business. He can be reached at firstname.lastname@example.org.