Every other month, we administer a brief Web-based survey to CLO magazine’s Business Intelligence Board (BIB) on a variety of topics to gauge the issues, opportunities and attitudes that make up the diverse role of a senior learning executive. For this mo
by Site Staff
August 30, 2004
- Organizational distribution of learning and development personnel.
- Financial responsibility for learning and development.
- Reports used to gauge the value and performance of learning and development practices.
An analysis of IDC’s survey of the BIB and other recent IDC research shows that while the operation of a learning organization is unique to the larger enterprise in which it resides, there is a growing trend toward standardization of structures, systems, processes and practices to ensure that learning aligns with business strategy.
Personnel and Decision-Making Authority Is Spread Out
Only about one-half of learning personnel report into a centralized learning function that is either independent or the responsibility of human resources (HR). (See Figure 1.) The other half consists of learning professionals who work directly on behalf of business units (perhaps with some responsibility to a learning function) and non-learning professionals who hold some level of responsibility for developing their peers or reports.
The financial responsibility for and scrutiny of learning and development investments reflect the location of learning personnel within senior learning/HR and line-of-business heads, with a statistical tie of around 60 percent. (See Figure 2.) In addition, depending on the type of learning investment, decision-making authority and influence is quite likely to come from multiple domains.
There is still no single model for delivering learning within an organization. IDC has found that the organizational structure and culture of an enterprise deeply influence how learning and development operations are governed. Although there are many nuances of organizational structure, IDC has found that the “average” learning and development organizations comprise three clusters:
- The Centralized Learning Organization leverages one corporate learning function that reports to one person, commonly a head of HR, and is made up of one large department with many functions. Clear accountability, workflows and scalability are all keys to making a centralized function work. For this type of organization, IDC estimates that 70 percent to 80 percent of all organizational development dollars are spent by this function with the remainder expended by the lines of business.
- The Matrix Learning Organization reflects the numbers depicted in Figure 1. It distributes governance and resources evenly across a corporate learning function and the lines of business. Generally, strategic and enterprise-wide activities are handled centrally and the specific points of need and delivery functions are handled at the local level. Budgets are split 35 percent to 65 percent centrally, and 35 percent to 65 percent across lines of business.
- The Decentralized Learning Organization pushes control and responsibility out to the lines of business so that they can deliver and respond to their specific business needs more quickly and flexibly. Speed, personalization and responsiveness are key factors that drive decentralization. Budgets are split 20 percent to 30 percent centrally and 70 percent to 80 percent across the lines of business.
As part of a recent study, IDC interviewed several senior learning executives representing decentralized and matrix learning organizations within large enterprises who touted operational flexibility and better responsiveness to local needs. However, several disadvantages have led them to start centralizing or to consider centralizing some of their organizations, systems and processes.
The biggest issue is that there is limited visibility into the time and money spent on organizational development. Estimating the total cost of ownership (TCO) associated with learning and development is not an easy task for the vast majority of senior learning executives. Management often has difficulty accounting for internal and external costs associated with technology implementations and upgrades, costs of personnel shared with other business functions and how learning budgets break down and roll up from different lines of business, resulting in duplication of efforts and investments. In addition, there are issues of insufficient quality control measures related to how learning content is developed and delivered, and unknown or inconsistent benefits derived by individual learners, the departments in which they work, the internal and external customers they serve or the enterprise as a whole.
A Trend Toward Shared Services
Shared infrastructure and services models enabled by technology can be effective for organizations attempting to address these issues. That is likely the reason that a majority of the Business Intelligence Board believe their organizations will become more centralized in the way they manage learning processes over the next two years. (See Figure 3.) That is not to say that there will be a flight by those who are now decentralized or matrixed in their current governance model to what IDC classified as a “centralized learning organization.” Rather, there will likely be centralization of certain processes for which economies of scale outweigh the benefits of flexibility and responsiveness to short-term needs.
Many learning executives are confident that the trend toward automated employee self-service spawned by Internet technologies has resulted in cost reduction and freed up learning personnel with minimal cost shifts associated with learners doing more themselves.
Building on self-service, many would like to centralize and systematize the activities they view as tactical, such as maintaining and upgrading a system, keeping content up-to-date and managing employee enrollments. This will free up learning professionals’ time to do more performance consulting and manage key learning programs tied to the enterprise’s strategic initiatives.
Learning management systems (LMSs) are playing a growing role in enabling a shared-services model from which learning personnel, learners and management can access the resources and reports they need. In fact, they are often the means by which organizations establish stricter governance models. As part of this survey, 78 percent of the Business Intelligence Board agreed or strongly agreed with the following statement: “As a professional development manager/executive, I believe the learning management system is a key component needed to organize, manage and deliver training across organizational groups.”
IDC anticipates that as the use of these technologies (and the technologies themselves) matures, organizations will increasingly standardize on systems that address all of their learning needs (e.g., regulatory compliance, professional development, extended enterprise competence). Driving the trend toward the proverbial enterprise-wide LMS will be the desire to tie learning and development more closely to employee workflows.
Integration with other business systems (HRIS, performance management, ERP, CRM) will consequently become more commonplace. Also driving these integrations will be the important role LMSs play in governing the manner in which the learning organization and the individuals comprising the learning organization are held accountable for their contribution to organizational performance. The data held within these systems and others will also help those responsible for investing in learning–in a centralized learning function or otherwise–make better decisions. Figure 4 shows the reports currently used by the Business Intelligence Board to gauge and improve their performance.
Clearly, those individuals charged with employee development wish to be in the business of adding value. The data presented here and other IDC research suggest that governance models are undergoing change. As senior learning professionals consider how they will manage people, systems and processes going forward, they should determine what the enterprise is trying to accomplish and the extent to which changes in governance need to be made.
In addition, senior learning professionals should perform a process-based audit of their organizations to develop an understanding of operational costs. They should coordinate such efforts with business functions that share costs with training, such as HR and IT. In addition to providing a better understanding of the true operational costs of learning, joint exercises will provide insight into similar efforts outside of employee development that may impact decision-making. Only after such an assessment can a course for improvement be charted. Senior learning professionals should also assess their organizations’ readiness for change and identify champions who can help communicate and follow through on expectations.
Michael Brennan is program manager of learning services research at IDC, a global market intelligence and advisory firm. You can e-mail Michael at email@example.com.