Three HR executives share the challenges and advantages they have found as purchasers of outsourcing training services.
By Debbie Bolla
When covering the ever-changing learning paradigm for this issue, we thought our approach should be didactic: Hence, our idea for a practitioners’ roundtable. We wanted to provide a forum for those who have experience with an outsourcing relationship to discuss and share their best practices. Training has come a long way from instructor-led classes in off-site locales. Outsourcing is subject to constant change precisely because new technologies enter the landscape on a frequent basis. Just in the last few years, e-learning has made its way into the market and has changed the way organizations think about how they approach learning. With so many options, some say the more the merrier; others warn that less is more.
Our Experts
As a newcomer to product manufacturer Alberto Culver, Michelle Parks was recently brought on as training lead for the company’s five-year SAP implementation project.
Brian Watkins oversees Midas’s learning services program for its 1,800 locations in U.S. and Canada as the company’s director of training.
Nick Howe is vice president of HDS Academy for Hitachi Data Systems, and says he takes a boutique approach to outsourcing, leveraging several providers and managing multiple vendors.
Michelle Parks, Alberto Culver
Provider: RWD Technologies
What services do you outsource, and why?
RWD supplies training development and training project management support, and some logistical support for training delivery. It’s mostly instructor-led, and it’s all SAP training in support of the go-live of SAP. We use e-learning for basic navigation skills.
Describe your vetting process.
We outsourced training for a five-year SAP implementation project with five rollouts in different countries with 3,500 employees to train. For the first rollout in the U.K. we used a different provider from the most recent rollout in North America. For the switch, we considered three providers—staying with the same provider, another company that we have a contract with for services related to this project, and RWD Technologies, who we went with.
What criteria did you use when vetting providers?
1. Experience with similar modules and experience with our main development tool, uPerform that was selected for the first roll-out
2. Cost
3. Local resources
The factors were weighed equally originally, but in the end experience trumped the others.
How was the training program received?
The training was well received, and people liked the delivery and materials. For this company, it’s the biggest training program they’ve ever had, invested in, and delivered. It was over six to eight weeks. Instructor led was necessary since it involved a lot of process change—and you need someone to answer the questions that come up.
What was the main benefit to your outsourcing relationship?
The development tool uPerform was created by RWD, which we selected before executing our outsourcing relationship. It’s their product, and that’s a huge benefit. Not only do they know the product, they have a lot experience with it. Having a connection to product support within RWD is huge. Whenever we have any technical issues, they have connections within the company to get it solved very quickly.
What are your metrics to measure return on investment and learning success?
We created skills assessment for every course and used Zoomerang (online survey software) so everyone could complete those after the course. If we consistently saw people in a class falling behind our standard number (70 percent), we would address the specific course or provide additional training. We do have key performance indicators that are being measured now post go-live for each process area. But those could be impacted by system issues, not just individual employee performance issues.
Brian Watkins, Midas
Provider: Raytheon
What services do you outsource, and why?
We needed a way to provide a lot of technical knowledge that was constantly changing for a technician in a Midas shop working a car in the most cost-effective way. We were using instructor-led training, but it became too cost-prohibitive, so we’ve moved to online training for our 1,800 locations in the U.S. and Canada. We keep training for customer service and management in-house mainly for proprietary reasons. We have built up those two areas with very Midas-specific information; the technical part is more of a general thing.
Describe your vetting process.
We started negotiations in 2005 and rolled out in 2006. We just renewed in 2008. At the time, we looked at four different companies. When we did the review process, I also talked with other vendors to see what they had.
What criteria did you use when vetting providers?
1. The breadth of the technical material and expertise in the automotive industry
2. Ease of use
3. Quality of the courseware
4. Software
5. Provide a LMS
In many cases, the products had good and bad things, but what swayed us was technical content. Some had accurate technical knowledge, but we wanted a blended approach with animation in courses.
What types of training programs do you offer your employees?
We currently have 31 one-hour courses available in brakes, electrical/hybrid, steering/suspension, and general maintenance. Raytheon made sure these courses met our needs and did any customization that was necessary. When we started, we had 27 courses available, and we’ve slowly grown that. As a franchisee organization, we are limited in what we can have as learning requirements for each branch.
How was the training program received?
Culturally, we knew it would take some time for everyone to get used to the process. We set a goal in 2006 to have 50,000 courses completed in the first five years. We hit the 100,000 course-completed mark in a little more than three years, so we felt we turned a corner, and it was accepted.
What was your biggest challenge?
Our biggest challenge was ensuring the adoption of it, that employees would go online and try it. In 2006, we promoted it at a major annual convention and demonstrated the features. We knew there would be a big culture shift—there was a resistance to online. If we did a formal study, it would have changed the way we did a few things. We have dealers that are part of a committee that we speak to quite regularly, but it’s a small sampling. If we had done more data with more actual users, we would have found out some things that would have possibly avoided some of the changes we had to make six, eight months down the road.
What are your metrics to measure return on investment and learning success?
We picked three different criteria to use to measure training: brake sales, total sales, and customer satisfaction through a survey. We looked at shops that completed training versus those that hadn’t to see if there was a difference in customer satisfaction and sales. In every case, shops that had completed the training had higher brake sales, higher custom satisfaction, and higher overall sales.
What’s the most favorable aspect of your outsourcing contract?
The relationship with our provider. There is no way to understand all the challenges and pitfalls. We make sure we have constant updates, monthly calls, and a point person for questions.
Nick Howe, Hitachi Data Systems
Provider: NIIT
What type of approach do you have to outsourcing?
We tend to take a boutique approach. We tend to go with best practices in different areas. Rather than the single monolithic outsourcer, we manage multiple vendors to give us the flexibility we need.
What services do you outsource to NIIT?
Two things primarily: content development and content delivery.
Describe your vetting process.
We’ve been working with NIIT for more than eight years, but we continually look at other providers and not necessarily at contract renewal time. I try to take a more evergreen approach and follow what’s going on in the marketplace—like market maturity and new entrants, issues around coverage. We use NIIT globally, and our requirements are changing. It’s a strategic partnership so we both have value invested in it so it would take a lot to change.
What criteria did you use when renewing your contract?
1. Price
2. The relationship
3. Flexibility
Price is always an issue. For us the two big things are the relationship—who we are working with across the table and their attitude. And flexibility. We live in a very dynamic world, and business is going to change. We don’t want to resort to the contract every time we change, so it’s very worthwhile to us.
What types of training programs do you offer your employees?
We deliver content across the full gamut. On the development side, we use NIIT for technical web-based content, and synchronous and asynchronous instructor delivery.
What are your metrics to measure return on investment and learning success?
On the content development, we do a lot of upfront design work so that the measure is delivery on time and on budget to the appropriate quality. On the delivery side, it gets more defined in the learning space. We do use level one metrics for every single class we teach, and we hold the instructors accountable on the standard of delivery based on feedback from the students. We also hold NIIT accountable in terms of skill sets they have in being able to train, not just on content they are teaching, but they have knowledge around the subject.
Any advice for future buyers?
The golden rule is to be very clear about what you are trying to accomplish. Often the reason why you think you are outsourcing is generally not the reason why you should be outsourcing. Never outsource a problem because it tends to become a very expensive problem. Do your due diligence, find a company that you are very comfortable with that has excellent references. Go into it on the basis that as soon as you’ve written the contract, you are going to put it in a drawer and never touch it again. If you can work on that basis, you stand a chance of it being a success. If you can have an agreement where you both are investing for success, those relationships tend to work.
