Sales manager KnowledgePoint
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A return to outsourcing?

5th Aug 2015
Sales manager KnowledgePoint
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Neil Georgeson discusses why the time is right to rethink your training resource management strategy.

Short-termism is often a necessary evil in times of recession. But unfortunately it seldom pays off. Organisations that brought the production, fulfilment and distribution of training materials in house during the economic downturn are now being left behind. Yet, gradually these companies who decided to ‘go it alone’ are reassessing– and are returning to the idea of outsourcing.

Lack of product quality and scalability restrictions are all taking their toll. They now find themselves under-resourced and behind the curve, for example, when it comes to electronic courseware which elsewhere is becoming the norm.

This all puts pressure on operational and training delivery teams with too few doing too many jobs. Businesses are still cautious about recruiting for support positions, preferring instead to boost core sales and business development teams. And yet lack of up-to-date training materials can play its own part in restricting business development and growth.

This could be why statistics show more business casualties on the way out of recession than during it. There’s more competition and many organisations have a long way to catch up with the market leaders. So the challenges may be different, but there are more pitfalls and reasons to fail. For example, scalability is a core business requirement for a seasonal training business, but it may be impossible to absorb the high internal costs required to cope with peak training capacity during the low season.

The tendency for markets to consolidate during a downturn means that some businesses are also coping with the aftermath of a merger or acquisition. For these the problems are even worse as they attempt to deliver consistent but relevant materials across new regions and to a larger audience.

Most companies in this category will want courseware to be of uniform quality across the board. However, material will need to be consolidated to brand and delivery formats, translated for some countries and perhaps even presented with a different approach to match local or regional demands.

So often it’s not the training itself that stretches resources; It’s the management of content, presenting it in the right format for different courses and audiences, the formatting, the printing where appropriate and delivery through the right channels and at the right time.

With the growing use of the internet and social media this has become far more complex than it was pre-recession. For example, there’s a significant gap between the way digital natives consume information and the methods of older generations. As consumers these days we have so much choice – and most of us want the same kind of options in the workplace too; just note how quickly the whole ‘bring your own device’ trend took hold. So training businesses need to be able to carefully tailor content and delivery methods to their audience’s direct needs.

Talk about the costs of training materials and the focus is usually on the easily identifiable base paper and print costs. But the full story is different. For example, rarely are the man hours, facilities or overheads of storing and managing course content factored in when estimating budgets. This is in addition to the cost of printing, the purchase price or leasing costs for equipment, support contracts for maintenance, paper, toner and other consumables and the overheads of running a print room including investment in depreciating assets and the cost of employees printing and collating.

If those engaged in the hard graft are the trainers themselves, then they are working on tasks way below their payscale – and the whole operation becomes an expensive use of time and labour. Effectively removing a monetised resource to perform administrative tasks.

There’s also the usual hiccups associated with any event – late registrations, last minute deliveries and the risk of service interruption. Plus the management of complex supply chains, possibly across a number of different countries.

There have been few recent studies into the size of these overheads. However, some years ago one learning management company estimated that for every hour of instructor-led training (ILT), an average 43 hours of development were needed.

Take away these practical tasks and trainers are freed up to actually focus on their courses and subject. Outsourcing brings significant economies of scale as far as printing volumes are concerned and can ensure a standard quality of materials, including colour, print and paper weight. The arrangement is also totally scalable, opening up more and more options as a business grows, while ensuring the minimal costs are incurred during any low periods.

Taking courseware print and fulfilment in-house no doubt seemed a good idea when the pressure was on to make every cut imaginable. But unless this decision is reversed, trainers and training firms are at a disadvantage. It’s not too late to get back on course.

Neil Georgeson is sales manager at KnowledgePoint

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