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Outsourcing of Learning and Training: An International Survey
A Joint Project by SRI Consulting Business Intelligence and ICWE GmbH
January 2005
Project Sponsors: IBM; Raytheon Professional Services
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Introduction and Acknowledgments
The past year or two have seen growing interest in and attention to learning and training (L&T) outsourcing issues, given the number of published articles and reports, as well as conferences and meetings on this topic. The reasons for this interest are many (and appear in more detail in the report Learning Outsourcing: Strategic Opportunity by SRI Consulting Business Intelligence's Learning-on-Demand [LoD] program), but it is clear that increasingly, organizations' L&T operations will need to run like any other part of the enterprise: as a business. This need means that L&T operations have to achieve specific business goals and hold to the same cost and business performance criteria as other parts of the business.
Good data on the emerging L&T outsourcing industry are still very scarce for this emerging industry—especially in the international arena, and until now we are aware of no surveys of L&T issues and development with broad international scope. For this reason, LoD teamed up with ICWE (the organization that manages the annual Online Educa conferences in Europe) to conduct an international survey of L&T outsourcing, taking advantage of the database that ICWE has created during a number of years of running the Online Educa conferences. The project was sponsored by IBM and Raytheon Professional Services, two of the largest providers of L&T services, with L&T outsourcing projects in North America, Europe, and Asia.
Executive Summary
This international survey of learning and training outsourcing practices is unique because of its participation of more than 800 respondents from 46 countries—with 75% from Europe (16% from Germany and 13% from the United Kingdom) and 14% from North America. Although most participants come from relatively small companies (with 32% of respondents from firms with 50 employees or fewer), 29% of the respondents come from firms with more than 1000 employees, including more than 50 organizations with more than 10 000 employees.
Some findings include the following:
- Operations need improvement. Although respondents express a high degree of satisfaction with current L&T operations and believe that senior management and learners are also happy with current operations, they nevertheless see that significant changes are necessary to improve L&T operations (teachers, consultants/researchers, and technical directors are the people who agree mostly or strongly with the need for change).
- A relatively small share of L&T budget goes to outsourcing. The share of L&T budgets dedicated to outsourcing is still small—44% of respondents from organizations that are currently outsourcing L&T activities or functions report that less than 10% of L&T budgets go to outsourcing, but 19% of these respondents put the percentage between 10% and 25%.
- The experience with and attitude toward outsourcing are positive. Respondents from firms that have been active in L&T outsourcing feel very positive about their experience and also believe that senior management's attitude toward L&T outsourcing is either very positive or somewhat positive.
- Outsourcing has been growing, but expectation for the future is mixed. Although most respondents from organizations that are currently active in L&T outsourcing report that these activities have been growing—and they expect this growth to continue—those who are not currently active in L&T outsourcing believe that their organizations are not likely to embrace L&T outsourcing in a significant way in the next three years (but the percentage split between "not at all likely" and "somewhat likely" to embrace L&T outsourcing is very close, and the percentage of "somewhat likely" is much higher [44%] among North American respondents than among European respondents [28%]).
- Fewer respondents expect learning technology to be outsourced in 2007. The biggest surprise in the survey—and one that may be explained by how respondents interpret "L&T outsourcing" (much of it would likely fall in the category of outtasking rather than "selective outsourcing" or "comprehensive outsourcing"—see the box on page 15) is that a smaller percentage of respondents expect that "learning/training technology (hardware and software)" would be outsourced in 2007 than in 2004. This result was similar among North American and European respondents and was in industry as well as in the academic sector.
- Four areas will see greater outsourcing. The L&T activities and functions that a greater number of respondents expected to see outsourced in 2007 included content modification (that is, conversion of content to eLearning), content localization, management of professional learning communities, and management of other vendors that are providing training.
Table of Contents
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| Introduction and Acknowledgements |
1 |
| Executive Summary |
2 |
| Demographics |
4 |
| Learning and Training Operations: Status and Trends |
8 |
| Learning and Training Oursourcing: Status and Past Trends |
12 |
| Future Oursourcing of Learning and Training |
20 |
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| Tables |
| Current Status of L&T Operations |
9 |
| L&T Activities Currently Outsourced |
13 |
| Reasons for Deciding to Outsource L&T |
17 |
| Key Decision Factors in Selecting Outsourcing Provider |
18 |
| Reasons for Not Outsourcing L&T |
20 |
| Outsourcing of L&T Activities and Functions: 2004 versus 2007 |
23 |
| Ambivalence in Embracing L&T Outsourcing among Those Not Currently Outsourcing |
23 |
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| Figures |
| Responses by Sector |
4 |
| Size of Respondents' Organizations |
5 |
| Respondents by Region |
6 |
| Position of Respondents |
7 |
| Size of L&T Staff |
8 |
| L&T Budget Trends in Past Three Years |
10 |
| Share of L&T Budget Spent on eLearning |
11 |
| Likely Change in Percent of L&T Budget Spent on eLearning in the Next Three Years |
12 |
| Share of L&T Budget That Is Outsourced |
14 |
| Change in the Past Three Years in the Percentage of L&T Budget That Is Outsourced |
16 |
| Senior Management Attitude toward L&T Outsourcing |
17 |
| L&T Outsourcing Experience |
19 |
| Expected Change in the Next Three Years in the Percentage of L&T Budget That Is Outsourced |
21 |
| Groups with Primary Responsibility for Making L&T Outsourcing Decisions |
22 |
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| Box |
| The Outtasking-Outsourcing Continuum |
15 |
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