From Where I Sit - Doug Harward

Around the turn of the century, training business process outsourcing (BPO) became a commonly offered service that training suppliers began marketing. Many learning leaders viewed the concept of outsourcing as a bad idea; one that would eliminate jobs and not improve the quality of training in their organization. Training outsourcing was considered an all or nothing proposition – a strategy you either did or did not do. There was no in between.

In this time period, the term training BPO was not commonly used. The term outsourcing was used most frequently, and to some, it meant that you were sending your work to a company overseas. I once had a learning leader tell me that outsourcing training meant that you were selling your soul to a company overseas, and they had no plan to hand the keys to the training department to an outside company. Outsourcing was a “dirty word” with a negative connotation and it represented all that was bad in our profession.

A few decades later, the way training professionals view training outsourcing has changed considerably. Almost every learning leader today recognizes that outsourcing is a normal way of doing business. It is recognized as a viable approach to leveraging the talent, technology and content of a training partner to improve the effectiveness and efficiency of training.

It no longer means that you have to sell your soul to a training supplier. Since the beginning of the BPO market, virtually every leader of a training organization utilizes an external supplier in some way – either to customize a course, deliver a class or license content for online training. I would be willing to bet there is not one Global 2000 company that does not use a training supplier in some capacity. In other words, all companies outsource some part of the training function.

Outsourced Training Services

The most common service outsourced today is content development, according to Training Industry’s 2015 Great Training Organizations survey. Especially with the growth of online content, companies are choosing external partners to develop content that can be delivered over the web. The second most commonly outsourced service is delivery of training courses.

These activities are so commonly sourced today that the average corporate training budget allocates more than 30 percent of their dollars to external vendors. The average BPO contract is now less than a million dollars per year, which is much less than their overall budget. Companies often choose to use many suppliers as opposed to just one. In fact, procurement agents tell us that the training function uses more vendors than any other lines of business or functional groups besides manufacturing.

Not surprisingly, reporting and analysis is one of the least common training services outsourced. These processes include defining business metrics and reporting the data to make business improvements. With the complexity of identifying key measurement criteria to ensure business impact, most businesses choose to maintain the responsibility of defining business metrics. By keeping these resources in-house, training leaders can more effectively ensure training alignment.

The Future of Training Outsourcing

The growing question remains whether the trend to utilize outsource suppliers as a less complex engagement will continue. Or will training leaders begin utilizing training BPO companies in a more strategic way? Leaders of training suppliers tell me the problem lies with the idea that corporate training leaders do not understand the value that suppliers can deliver. I agree.

From where I sit, it’s the responsibility of suppliers to change the buyer’s perception. Suppliers need to invest more in developing their own capabilities and differentiate themselves based on the talent within their organization. They must focus on being better at training management and not rely on being a low cost provider. Corporate training leaders have proven they will pay for value.