naging. 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 that really well when I outsourced my training in DuPont years ago. Subsequently, when I led outsourcing processes with a number of other companies, we performed very well and delivered immense value. From the outsourcers’ side, unless you’re responsible for the processes for understanding needs and determining solutions, it’s hard to be held accountable for the value. In the absence of those things, the most that you can hold an outsourcer accountable for is:
• Quality processes
• Cost reduction
• Cycle time
Those sorts of things on the transaction related elements and quality of content that you purchase if you’re purchasing from a third party content provider.
So, those are the three arguments. The last one crosses the barrier between internal and provider organizations. So, when I look at outsourcing today, there’s been a pretty significant change in how we do outsourcing today in the marketplace. The marketplace has evolved from comprehensive outsourcing to outsourcing of specific elements or specific services and the research says that the things that are being outsourced the most are custom content development, training administration primarily in large companies, not in small companies, and some delivery. And, of course, organizations are moving more toward software as a service hosted, learning technology model, where they don’t require resources to support systems and those sorts of things. And sometimes you’ll see organizations outsourcing combinations of those things. And while those are good things to outsource and, in fact, they offer the opportunity to reduce cost, they also limit the ability for the outsourcing provider to make a huge impact on the value side of the equation.
So, as organizations do this work and outsource these kinds of things, they must take the next step, which is to improve their internal processes for:
• Linking to the business
• Understanding needs
• Engaging with customers
• Understanding customer expectations
• Ensuring that the work they do is relevant and linked to somethi