by Site Staff
January 3, 2005
Even medium-sized companies can go global. Hyperion is a leading enterprise software provider of business performance management solutions. The company employs approximately 2,400 people in 20 countries and manages a network of more than 600 partners worldwide that help install and support the company’s specialized solutions. It serves more than 9,000 customers–including 91 of the Fortune 100–which translates to about 30,000 learner days annually. Hyperion’s revenues exceed $600 million, including a recent acquisition, Brio Software Inc.
As recently as 2003, Hyperion had separate education businesses operating in three different segments of its business: a for-profit customer education business, a corporate university for professional development and a partner education business for channel certification. In addition, the recent acquisition meant that both respective employee groups would need cross-training, and members of each learning organization would need to be assimilated.
“A smaller company operating on a global basis with three separate education lines of business was not easy to rationalize,” said Sundar Nagarathnam, vice president of education services for Hyperion since August 2003. “We wanted to avoid the prospect of having different groups go out and buy different LMSs and other tools. So, we started a dialogue to align our resources behind one common system and build an organizational model that would enhance collaboration while allowing us to focus on some of the unique aspects of each education segment.”
The learning organization adopted a mission statement that incorporated elements that each group needed to excel. Its charter enabled rapid adoption of new products and services throughout its value chain and focused on performance through dedication to excellence, while achieving process and system efficiencies, building domain expertise and innovating service delivery. The team also was able to categorize its objectives and challenges along four dimensions: strategic, organizational, financial and operational. Its leading strategic objective was to leverage new technology to expand the reach and standardize business processes for education services globally. However, it also had to provide cost predictability for employee and partner training, and revenue profitability for customer training. Additionally, as an evolving organization, it needed to establish credibility within Hyperion while helping merge the two companies.
A learning governance council was created comprising business/curriculum leaders, regional and line-of-business leaders, and central HR/learning leaders. Its priorities were to clarify roles and responsibilities among groups for business support, technology support and regional planning, as well as ensure appropriate decision rights, program prioritization, issue resolution and chargebacks for services provided.
The governance model that evolved resembles a “spoke and hub” model, where the central learning organization manages learning functions that can be shared by other groups, while the operating units design, develop or leverage needed learning solutions from other teams. Centralized learning functions include the LMS and related tools, content development, resource availability management to support other groups, planning and administrative roles, budget planning and overall stewardship responsibilities. Distributed learning functions include learner needs analysis for customers, partners and employees, business requirements definition, curriculum ownership and management of specific content development or procurement projects, and overall performance governance of the respective education segment.
An account/program manager model of engagement helps the learning organization develop flexible service-level agreements (SLAs) with each affiliated group and provide consistency with regard to key education practices for blended content delivery (Web, classroom and virtual environments), global pricing and discount strategy, and streamlined scheduling, registration and enrollment.
The model was put in place in the first quarter of 2004, and the results were immediately visible. Operating margins for the combined education business rose steadily from the low single digits in 2002 to double digits in the latter part of 2003 and exceeded 30 percent through most of 2004 (30 percent, 28 percent, 34 percent and 37 percent for each respective quarter in 2004). Coordinated administration costs, content procurement savings and a growth in customer education services drove the cost savings and margin improvements.
Hyperion recognized that to serve multiple learning segments and operate globally, it had to adopt a shared-services model. This allowed the company to assimilate common investment and service requirements while maintaining domain expertise and linkage to the operating strategy for each segment. Second, while it found initial executive support, it knew that ongoing support would only come by supporting the success of other education stakeholders. While it would be premature to suggest that the organization has thoroughly optimized a learning governance model today, it is operating globally with shared business processes and practices. Additionally, it has expanded the learning organization’s value to its team members by addressing any morale issues stemming from the merger, implementing pay-for-performance incentives and developing a common charter that serves all interests.
Grant Ricketts serves as vice president of business development for Saba. He can be reached at email@example.com.