Like an iceberg tip, the important issues within the broad topic of corporate learning are mostly still buried below the surface. That’s why a several-year growth trend of hiring Chief Knowledge Officers (CKOs) and acquiring eLearning solutions or technology enabling knowledge capture and collaborative information sharing went static in 2002. In cost-cutting efforts associated with a down economy, learning and knowledge initiatives moved high on the list of “overhead” items.
Although most organizations realize that learning and training are mission-critical corporate functions, many have not achieved the anticipated return on their investments in this area. In fact, David DeLorenzo, manager of distance learning and Web strategy at National Association of College and University Business Officers (NACUBO), a non-profit organization that provides a broad variety of training courses to its members, says “a lot of organizations bought in extremely robust learning management systems but only used about 10 percent of the functionality and capability. Now they realize how much money they wasted.” Similarly, companies found that buying platforms with the broad-brush approach of 500 generic eLearning courses for their employees was a wasted investment.
Harry Brakeley, managing partner for Accenture Learning, points out the importance of learning initiatives on CEO agendas. “Cost-cutting alone isn’t sustainable. You need to provide an organization the skills and capabilities necessary to operate in the new environment” he states. “If you can’t sustain the new efficient environment, your investment in cost-cutting measures falls short.”
Learning programs are proving to be a competitive differentiator in employee recruitment, retention and performance. Findings from an external research organization’s study of programs in place for Accenture’s employees reveal that:
- Potential recruits would take a job at Accenture for $6,000 less than a competitor because of the perceived excellence of Accenture’s training programs;
- People who take the most training have more skills (thus are more billable) and are more likely to stay with the company longer; and
- For every dollar the firm invests in training, there is a return of $3.53 in net benefits after costs are recovered.
So there is a renewed interest in learning programs and knowledge management, and spending in this area is predicted to increase significantly. Much of it will go toward distance learning technologies.
Cost-Effective Competitive Differentiator
The growth of broadband capabilities, as well as technology advances providing optimization in interactive functions over the Internet and streaming audio/video also have facilitated growth in distance learning technologies.
Discussing the increasing demand for distance learning options, NACUBO’s DeLorenzo says his organization presented its usual 60 live one, two or three-day workshops in August 2001 – July 2002. In its current fiscal year (started in August 2002), that number dropped to 16 and was, instead, enhanced with Webinars. Part of NACUBO’s mission is to be the knowledge source for services and products related to higher education administration. “But we ultimately react to our membership requests,” he explains. “They’re now clearly looking for more distance learning, and our workshops were starting to be not heavily attended. People no longer want to travel as much.”
The U.S. Army is another example of the trend – it’s currently undertaking an initiative to convert over 500 courses to distance learning courseware.
The market’s about-face is due to September 11, which resulted in a reluctance to travel to learning workshops and conferences, along with shrinking training/professional development budgets because of the poor economy. Companies are turning to distance learning as a more cost-effective way to deliver training that can’t be done face-to-face.
In addition to the hot market of university classes delivered over the Internet, distance learning also is becoming a corporate competitive differentiator as a tool to facilitate:
- Consolidation and standardization in mergers/acquisitions;
- External focus and community outreach to gain market share and generate revenue, especially in the healthcare, financial services, insurance and retail industries.
The healthcare industry is using the newer learning technologies as a way to accelerate the learning process to achieve a high degree of competence and quality, reducing time to capability.
Along with Homeland Security initiatives, various banking and healthcare regulations are also a catalyst for distance learning. States, for example, now are mandated to provide security and privacy awareness training. The Commonwealth of Virginia recently implemented a Web-based training solution for its 50,000+ users in 100 agencies spread throughout the state. Virginia now stands head and shoulders above other states in this regard and was honored, together with CorpNet Security’s MOAT solution, with a 2002 Grace Hopper Government Technology Leadership Award.
The Fastest Way to Achieve Value
If handled optimally, there’s no question as to the value of learning programs. So the focus now is on how to deliver them with more return on investment and more cost-effectively. This drive to achieve maximum value is the growth catalyst for outsourcing these important functions.
In many corporate environments, the learning function still focuses on a laundry list of courses and is really disconnected from the day-to-day business objectives. Accenture Learning’s Brakeley says, “This is the wrong approach. Learning should be tied to the business mission and strategy of the organization. Learning is not just about communicating knowledge; it’s about changing behaviors to align with business objectives,” states Brakeley.
Start by understanding the performance objectives, organizational capabilities and how to craft a curriculum and learning program to drive business value, he advises. Remember that “learning is a business,” he continues. “It’s one of the last bastions of uncontrolled spend, as far as I can tell. In order to achieve the business results, you have to provide the discipline that we know so well in the outsourcing space.”
Outsourcing the process leverages a provider’s existing resources and expertise, enabling results sooner. As Brakeley says about Accenture Learning, “We can drop in the technology, people, patented processes and techniques, instructors, course content and a global network faster, to drive greater business value more rapidly.”
Three Trends to Ensure Better Learning Technologies
Trend #1: On the cutting edge are companies pursuing adaptive learning technologies, where software can determine the learning style of an individual learner and then guide the learner in a customized manner through the course. This is also an effective way to tailor courseware to be compliant with government regulations for disabled individuals. Results should be shorter course time and better grades. Another result is an increase in outsourcing course/content development.
Trend #2: Also underway are efforts to shorten course material while enhancing the results. Enhancements include more frequent use of interactive features and activities to re-engage a student’s interest every seven – eight minutes.
The ultimate in this area of enhancement is Accenture’s patents in simulated learning. Course simulations are designed to ensure the student gains competence and confidence in behaviors necessary to perform successfully on the job. Brakeley explains, for instance, that “it will teach you a set of behaviors and how to handle difficult sales situations, such as how to deal with difficult buyers or buyers that are unfocused, before you go out into the marketplace. One of the bigger issues in learning is that just because you have the knowledge it doesn’t mean that you’ll be able to apply it.” These outsourced courses focus on many areas, including procurement, call centers, and even foreign exchange trading.
Brakeley relates having worked with BT in an outsourced learning initiative. One team of 40 high-performing sales representatives went through an eight-week course of old-style training. A second team of 40 randomly selected sales representatives went through 10 hours of the new simulated training. Subsequently competing head-to-head in the marketplace, the team going through the new simulated training outperformed the other team of high-performers by 102 percent.
Trend #3: Some organizations are actively engaged in studying how corporate America is using distance learning and evaluating the effectiveness of the programs and courses. Others, like NACUBO, are using electronic survey and town hall forum tools to capture and evaluate input from its members to be used in validating learning tracks and creating better learning experiences.
What to Seek in an Outsourcing Provider
Always perform due diligence on each outsourcing provider before entering contract negotiations. Look for a provider that can provide an end-to-end solution and understands your needs from an enterprise-wide approach. Look for evidence of how the provider will link learning to the business strategy and how it will support the business with a scalable solution (and, if needed, a global scale). How quickly will you achieve your business objectives? If you have an external component, look for demonstration of the way the provider will support you in that effort to gain market share. Finally, understand how the provider will assist in effecting behavior change and reducing time to capability.
Learning Programs Outsourcing Trends for 2003:
- Much of the coming increase in spending on learning programs in the next few years will be invested in distance learning solutions because of shrinking budgets and a growing reluctance to travel.
- Distance learning is becoming a corporate competitive differentiator as a tool to facilitate consolidation and standardization in mergers/acquisitions; external focus and community outreach to gain market share and generate revenue, especially in the healthcare, financial services, insurance and retail industries; employee recruitment, retention and performance; and a way to reduce learning time to capability.
- On the cutting edge are companies pursuing adaptive learning technologies, where software can determine the learning style of an individual learner and then guide the learner in a customized manner through the course.
- Efforts are underway to shorten distance learning course material while enhancing the results. Enhancements include more frequent use of simulation and interactive features and activities to re-engage a student’s interest every seven – eight minutes. Efforts are also underway to evaluate course effectiveness and learning tracks.
About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].