at are important to the company and the business, their skills are being built so that they perform at much higher levels, and they also leave at the end of the day feeling like they’ve made a difference.
And lastly, for the executives who fund all this stuff that we’re talking about, when they look at it, they have confidence (unlike the lack of confidence that many of them have today) that the money they’re putting into developing their people is in fact making a difference for the business and for their people. So, in that regard, “this tide really does raise all ships.”
With that, I welcome your comments. I would appreciate your feedback and maybe another day, there will be another blog.
click on the link below for the podcast version of this blog post.
Smoke Screens about Outsourcing
Let me just call up smoke screens, again, about outsourcing and I’ll tell you why—this is an interesting one that has dual smoke screens. The next one is that “I lose control.” I talked about this earlier but let me be just a little bit more specific.
The argument goes like this. If I outsource parts of training to an outsourcing provider or a third-party provider, I will lose control. And that’s as stated by senior training leaders. I take there’s a real issue with that.
• First off, in most training organizations, what we know is that there’s more training going on outside than inside the training organization. That does not sound like control to me. The opportunity is to get one’s arms around the total spend, direct and indirect, and manage the total spend, which we often find is not going on. There’s a hidden spend in training that’s 2-4 times more than the direct spend, and it’s an issue because it’s unmanaged. I have said for many years that training inside an organization is the largest unmanaged spend companies have, particularly big companies. If you think it’s a $1,000 per employee/ year, it’s actually $4,000 per employee/year. So, that’s the real spend, that’s what you ought to be managing, and that’s what nobody’s managing. So, lack of control is an argument. What in fact we know from outsourcing experience, and we can see this across multiple outsourcing providers and multiple outsourcing relationships, is that outsourcers bring formal processes for service level agreements, people accountability, monthly meeting and reports, and rigorous process control and variance management—all the things that companies demand of a third-party provider that they really don’t demand of themselves. So, when you put all those things in place, you have a governing structure that oversees it all and is engaged with it. I would argue that it doesn’t allow you to lose control, but in fact, improves the control you get. So, that’s an argument that, I think, again is a smoke screen.
• Let me move to the last one that I’ll talk about. This is an interesting one because it comes from both the buyers, or the internal training organizations, and the providers. And the argument goes something like this: “A company should not outsource the strategic elements of training.” So what do we mean by “strategic elements”? We mean the business linkage process of understanding the needs of the business and having dialogues with the business to determine visual learning solutions. It could make a difference for the business and, in fact, for designing that learning solution, and for all those sorts of things that are business connected and more strategic in orientation. And so, the internal learning organizations argue that that’s their role and you can’t outsource it. The providers, interestingly, at least a bunch of providers, argue the same thing, that they don’t believe those activities are outsourcable nor should they be outsourced And I think they do that for this reason:
They don’t have the capability to do those strategic things or they’re more transaction oriented in their approach to outsourcing. So, in my past life, the outsourcing relationships that I’ve created included the strategic elements. We performed that really well. My provider performed th