How Outsourcing eLearning Eliminated NCR’s Hiccups
Most people associate NCR with cash registers. In fact, NCR has many diversified IT solutions. Besides its well-known retail check-out solutions, NCR provides data warehousing and customer relationship software solutions; manufactures and distributes ATMs; provides a full range of ATM services from cash replenishment to network monitoring; and it sells specialty forms and supplies, such as cash register paper rolls and ink cartridges. Obviously, the training courses for NCR’s employees to manufacture, market, maintain and support such a large group of products and services is an extensive undertaking.
Three years ago, Jim Bauman, director of NCR University Operations, says it was not uncommon for a global client to ask, “how many people do you have who are ready to support your proposed solution, and where are they located?” The management process handling NCR’s learning functions was so fragmented that it was difficult to answer such a question. Much like the effect of a hiccup, conversation stopped. Not the best way to foster relationships with clients.
Before the learning management process was outsourced, NCR was using 23 different kinds of course registration and tracking systems with various degrees of functionality and complexity. Within the company, 38 different groups of people were developing and delivering training. For some individuals, the training function was a part-time task to be worked in among their primary duties.
NCR decided in 1997 to end this frustration by centralizing registration and finding a solution that would track training history and activity. Bauman recalls that they considered building their own solution to compliment their existing PeopleSoft application that managed employee records. They also considered buying a freestanding learning management system and operating it themselves – or perhaps finding a vendor to operate it. Finally, they determined that enrolling, tracking and reporting learning activity is not a critical, core skill that NCR needed in-house; so they opted to outsource to a supplier that would provide learning management software and also services around it.
Alleviating the Hiccups
Edcor won the five-year contract signed in July 1998. The outsourcer now handles NCR’s enrollment services through Internet/intranet, phone, fax or email at the Pontiac, Michigan call center. Eighty percent of enrollments go through the Internet/intranet. Bauman says there are 5,200 active courses in the NCR University system; and Edcor currently handles approximately 140,000 transactions per year (either an enrollment, an online course access, or an order for a course to be delivered on media such as a CD ROM) for NCR’s 33,000 associates.
Edcor also provides all the back-office services, such as tracking and reporting learning activity. That database is scrubbed periodically to clean out incorrect or duplicate records. In addition, Edcor supports NCR’s contractors, partners and customers through external Web sites; and it maintains a logistics staff at NCR’s Dayton, Ohio headquarters to coordinate classroom activities worldwide.
There were only two or three companies at the time that were geared to provide the breadth of services NCR wanted. Among those, Bauman says the selection of Edcor was a fairly easy decision. “They were the lowest bidder, had the most experience with call centers and, more importantly, they were willing to take their learning management system software and customize it to what we wanted.”
Little did they know at the time what that would actually involve.
“We thought we’d have everyone on the system in a year,” states Bauman. “But it actually took two years.” Laughing, he adds, “There were a lot of challenges.” The first challenge was the massive data conversion project from the 23 disparate systems and processes being used prior to outsourcing. But the next rung up the ladder of challenges required even more flexibility from the outsourcer.
As Bauman explains, NCR’s learning activities have to operate differently in various regions of the world. Classroom accommodations, logistics support, and computer infrastructure capabilities vary greatly from country to country.
And there were process challenges. “For example, in Europe,” Bauman explains, “the work is still done in a hierarchal system – whatever your boss says, that’s what you do. So they needed a capability where the managers schedule the training for the individuals instead of the individual employee doing it – just the opposite of the U.S.” Therefore, Edcor had to build different functionalities into the system to support all the regional requirements. “It was much more difficult than we anticipated it would be,” he recalls. “And Edcor’s experience then was basically U.S. centric.”
Not only did Edcor have to customize the system to accommodate the different processes based on cultural disparities, but it also had to deal with the privacy laws in each country. According to Bauman, there are very strict privacy rules in most European countries and Hong Kong. “Our legal department had to work with the Work Councils in those countries to get approval to even store the training records and information about people in a central database that was outside the borders of those countries,” he says. “And we had to prove to them that only a limited number of people would have access to the data.”
All of these global glitches presented an interesting situation for a new outsourcing alliance. Bauman says most of the challenges had not been anticipated and didn’t show up in the contract. He attributes Edcor’s flexibility and dedication to serve its client well as the reason for their success despite such huge headaches at the outset.
“I’ve been managing contracts for 15 years, and I think that Edcor is probably the most flexible vendor I’ve ever had the pleasure to deal with,” says an enthusiastic Bauman. “They really do try to meet our needs, and they don’t constantly charge us extra for things that are unexpected. In the contract there is allocation of funds for a certain level of that type of activity, but we quite frequently exceed that level.”
Because they have been able to work so well together, both parties have benefited from their intellectual property exchange. Edcor has refined the delivery of NCR’s courses, and NCR’s leadership in e-Learning courses has helped Edcor move to the leading edge of delivering learning management services over the Internet. And both companies can exploit what is still rare today – a storehouse of knowledge in a truly global learning system.
Lessons from the Outsourcing Primer
- Tracking employee training history and learning activity is an important function for an organization, but it is not a critical skill that needs to be retained in-house. It’s best to outsource it and leverage the supplier’s economies of scale.
- If an outsourcing initiative involves globalization, adequate up-front planning for differences in regional laws affecting transfer of data will make the transition phase run closer to scheduled timelines.
- Although contractual mechanisms stipulating how to handle customization and unanticipated changes that affect IT systems, it’s still best to choose a supplier that demonstrates willingness to be flexible.