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The Role of Learning Business Process Outsourcing

Learning business process outsourcing can facilitate the timely and cost-effective provision of learning within organizations.

November 7, 2007
Related Topics: Mentoring, Technology, Learning and Development

There are several key facets to talent management, namely, recruiting and onboarding to assist organizations in acquiring and socializing appropriate personnel, reward and performance management to steer personnel in their careers and learning to provide employees with the skills they require for success. Learning business process outsourcing (BPO) can facilitate the timely and cost-effective provision of learning within organizations.

The scope of learning services covers four main pillars:

• Content development and management
• Learning delivery
• Learning tools and platforms
• Learning administration

Over the past year, there has been a marked change in attitudes toward HR, with talent management issues increasingly dominating concerns about cost reduction and service standardization — now, there’s interest in HR’s impact on organizational goals, not just with its transactional cost-effectiveness.

Learning is affected in the same way. The increasing war for talent means that “time to competency” needs to be cut as staff turnover increases, and an aging workforce increases the importance of effective knowledge capture and transfer.

Rapid growth in emerging economies also means the global workforce needs to be trained quickly, effectively and consistently. Learning also needs to be used as a means of rewarding employees and reducing turnover.

Thus, the demand for and importance of training within the organization are increasing, and increasing amounts of money are being spent on it. Organizations need to optimize this spending for organizational impact and not just throw more cash at learning.

At the same time, approaches to learning are changing. Advances in learning technology have created some interesting challenges in terms of which approach to employ in which situation, how to combine different types of learning delivery within a single learning program and even the suitability of different learning delivery channels for differing employee profiles.

Another issue is persuading employees to train, which has implications for learning design. It also can involve restructuring of training into more bite-sized elements.

Given all these challenges, it is easy to overspend the learning budget, so it is very important for organizations to become more effective at training while finding ways to improve their learning efficiency.

Whenever there is this combined requirement for improved effectiveness and greater efficiency, there is an opportunity for BPO, and this is the case with learning BPO. But this switch in emphasis within HR outsourcing from improving transactional efficiency in payroll, benefits and employee care has been quite rapid and relatively recent — learning BPO remains a young industry with considerable growth opportunities.

The industry is still much more developed in North America than elsewhere but has significant growth opportunities in Europe and emerging economies.

So, what are companies seeking from learning BPO? Initially, many organizations still need to identify how much they spend on learning, what learning each employee has undertaken and how proficient he or she has become as a result.

Ultimately, though, organizations want to know what impact, if any, training has on employee and company performance, and then which training courses and elements do and do not have significant impact. Ideally, they want to know this within an integrated talent management approach.

Organizations need to increase the levels of learning within their organizations, as well as use learning BPO to ensure each learning program has an organizational impact and is delivered at reduced cost. Learning also needs to be timelier, particularly in support of events such as a new-product launch or regulatory change.

Obviously, some industry sectors depend more on learning than others, and this tends to be reflected in their satisfaction with their current learning provision and their rate of adoption of learning BPO. Learning is highly critical in industries with rapidly changing products such as high-tech and pharmaceutical.

Another major factor driving the importance of learning is changes in regulation, with the financial services and pharmaceutical industries being heavily affected. Learning delivery also is critical in industries with competitive marketplaces in which customer retention and increasing the average revenue per customer are key success factors. Industry sectors of this type include telecoms and financial services. Further, there are some sectors that involve life-and-death situations and the potential for expensive litigation, such as health care, where learning is extremely important and has huge potential for improvement over current practices.

In an example with a financial services company, use of learning BPO in the form of training administration and customized content design resulted in a 200 percent increase in the volume of training for a 25 percent decrease in cost, a 33 percent reduction in time to proficiency, combined with a 70 percent reduction in compliance training time, and the business benefit of a 20 percent increase in cross-selling.

But how are these benefits achieved, and how is learning BPO delivered? There are two ways benefits are achieved:

• A move to blended training delivery replacing, where appropriate, instructor-led training with online, self-service delivery through learning portals.
• The use of offshore delivery for labor arbitrage.

In terms of location, offshore use across all learning BPO processes averages 36 percent of full-time employees. This proportion varies considerably by process, however, with content design and development typically being offshored and learning administration predominantly onshore. This is beginning to change, however.

A typical learning BPO services supplier also is going to focus on its own delivery of key aspects of the service and use partners to achieve a full learning BPO delivery capability. Activities learning BPO suppliers typically will deliver themselves include learning administration, vendor management and elements of custom content development.

Other areas where partnership is common include the provision of “off-the-shelf” content, offshore custom content development, access to training delivery facilities (e.g., classroom provision), provision of instructors for instructor-led training and learning management system platforms.

How is the learning BPO industry going to change over the next few years? Learning services will become much more critical to organizations, and learning BPO will become a critical element in organizations’ talent management strategies. Additionally, adoption increasingly will move from out-tasking and project-based around single services to combinations of services delivered within an outsourced, multiyear contractual framework.

The mix of channels used for learning also will change dramatically. Now, learning is dominated by instructor-led training. Over the next few years, the proportion of learning delivered online will increase considerably, with blended delivery becoming the norm.

Learning also will become more assimilated within organizations, with an increase in bite-sized, on-the-job learning increasingly replacing large, course-based, discrete learning programs.

So, if you are considering adoption of learning BPO, what characteristics should you seek in a supplier of learning BPO services? Key criteria to take into consideration include:

• An ability to provide best-in-class services across learning administration, content design and blended delivery.
• Access to best-in-class technology for learning and content management.
• An ability to offer blended learning, integrating instructor-led training and e-learning.
• An ability to use learning analytics to align learning programs with employee and company performance.
• The ability to offer 15 percent-plus cost reduction across learning BPO and cost reduction of 50 percent-plus for content design.

Depending on your needs, particular domain capabilities also might be important, and you might have a requirement for large-scale learning program management.

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