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Learning the Corporate Way


Business strategy consultants SDL conducted in-depth interviews with 30 major UK companies about their attitudes to training. Here Frank Proud of SDL gives his analysis of what those companies said and what it means for the future of training.

Training has often suffered from being perceived by others in senior management as a 'Cinderella’ in the serious business of running a large company. While seen as important, it has often evaded financial measures of returns and has operated outside the core corporate information systems. Evidence from decision makers from some of the UK’s largest companies suggest that, if this picture ever was true, it is quickly changing.

In a recent study by SDL over 30 senior training decision-makers from some of the UK’s largest companies across a variety of industry sectors were asked about their training operations. Companies were interviewed in an attempt to get beneath the headlines and to understand exactly what they were considering, doing and planning to do with respect to training. One of the main conclusions to emerge is that the management of training is becoming very similar to other areas of general management, and that this may pave the way for training business process outsourcing.

Training is seen as strategically important
Virtually everyone we spoke to regarded training as a major strategic priority for their organisation, albeit for different reasons:
* Safety
In environments where safety is critical, such as in shipping and engineering, a failure of training can have disastrous consequences.
* Compliance
In regulated environments, such as financial services, utilities and pharmaceuticals, training is seen as a way to prevent scandals such as pensions mis-selling or poor water quality, and the resultant fines and loss of customer confidence.
* Sales
Sales driven environments see training as a lever to help their people get better results.

E-learning is back, this time to stay
Given the importance of training it is to be expected that it should embrace modern methods and innovations to improve its effectiveness and embrace best practice. Following the recent boom-turned-to-bust in e-learning, we found that 70% of organisations now expect to use it significantly more in the next year.

This includes both existing users who plan to roll it out, and those who have not previously used e-learning but who now feel the time is right. Increasingly e-learning will be deployed within a blended learning programme, to get the time and cost saving benefits of e-learning while preserving a face-to-face element where that is more effective, or can provide valuable side benefits such as team building and networking.

Learning is taking root in the corporate information systems
A key enabler of greater use of e-learning is the implementation of learning management systems (LMS). These systems make content available to the people who need it, measure usage and progress and, increasingly, interface with corporate ERP systems.

This enables processes, such as training procurement, to be automated and, critically, makes training visible across the organisation in different ways. We expect to see a significant change in over the next year or so. While around a third of organisations currently have an LMS in place, over 40% have begun the process of specifying, selecting or implementing a new system.

Supplier relationships are changing in nature
Most customers are broadly satisfied with their training suppliers and in particular with the quality of content they provide – the most important factor in supplier selection. However this does not mean that there is always a stable and cosy relationship. In part as a consequence of better supplier usage and performance information, there is actually considerable expectation of change.

More than half - 60% - of companies are intending to seek out new suppliers while one in five are planning to take more drastic action and reduce their number of training suppliers. Usually this is intended to build fewer but deeper relationships. In some cases this may be dramatic – from several hundred suppliers down to a dozen. While being a threat for those who have weak relationships, it may also be an opportunity for those who are more able to work in partnership, with larger, longer term contracts and preferred supplier relationships on offer.

Proper measurement of return on investment is vital
Given the increasing concentration of spend – investment in information systems and preferred suppliers – it is no surprise that it is seen to be more and more important to measure the benefits from the spending.

Traditional training metrics such as delegate satisfaction and course completion rates are seen to be limited and do not cut much ice in boardroom discussions and budget negotiations. A more financially rigorous way of measuring return on investment is needed. Some organisations have created models which give them this, often using a Kirkpatrick scale. However, most have not made the progress that they seek in this area and often look for their training suppliers to help.

Business process outsourcing (BPO) has been a dominant management trend of recent years, with external providers offering to carry out support functions on behalf of a company.

Call centres, finance functions and procurement have had this treatment and there is now exploration of the potential for this to happen across areas of HR, including training. There are several types of providers of outsourced management of training, including:
* Technology companies such as Saba and SumTotal – who offer outsourcing as a logical extension of a hosted LMS;
* BPO specialists such as Accenture and Capita – for whom training is a logical extension of their existing HR outsourcing offerings;
* Traditional training companies like QA and Hemsley Fraser, for whom outsourced management of training can drive course revenues.

We found widespread resistance to the idea of outsourcing - 80% of large companies say they are opposed to it. This is perhaps not surprising as there are many horror stories associating it with redundancies and decline in working conditions and status.

However, companies who have outsourced appear satisfied, and some others are considering it. Indeed, there are success stories where outsourcing has transformed an area from unloved support function to core business.

The main trends described above – training seen to be important, investment in new technology, more professional supplier management and better performance measurement – would appear to make outsourcing more feasible. However it may be that they are actually the real changes, and that a department that has embraced them has little to fear from outsourcing.


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