State of Learning BPO market NelsonHall Webinar 13 11-21

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NelsonHallGlobal Learning BPO WebinarNovember 21, 2013

The State of Learning Business Process Outsourcing

Gary BragarHR Outsourcing Research Director

gary.bragar@nelson-hall.com 2

Latest NelsonHall HRO Research Published

Recently published market analysis and associated vendor profiles in 2013:

– Targeting Multi-Process HRO

– Targeting Payroll BPO

– Targeting Benefits Administration

– Targeting Learning BPO

– NEAT for Payroll and Benefits Administration

Next Research to be Published in 2013– Targeting RPO and NEAT for Learning & RPO

The State of Learning Business Process Outsourcing (LBPO) Agenda

What is LBPO & Size of the Market

Why Companies are Outsourcing LBPO

Benefits Obtained by Buyers

LBPO Inhibitors, vendor selection criteria & Vendor Challenges

Critical Success Factors

Learning BPO Trends, Social Learning & the Future State of Learning

What Do We Mean By Learning Services?

Learning Services constitutes the management of a single learning process by a third party vendor within a short-term (typically less than a year) project arrangement.

Learning Service arrangements are common within content design and development, but also occur within delivery and technology In technology contracts, vendors offer hosted

LMS/LCMS solutions to client organizations, sometimes including helpdesk support for that technology.

What Do We Mean By Learning BPO?

Learning BPO constitutes the management of core learning administration services by a third party alongside one or more of the other critical learning functions for contracts that are a minimum 1 year length

Full LBPO includes management of all aspects of learning, i.e. admin., content, delivery, technology. Selective LBPO includes a combination of admin. and one or two other learning function process areas e.g. technology and delivery

Learning BPO can encompass a company’s employees (Enterprise) or its customers and/or channel partners (EE)

Global Learning BPO Market to Reach $4.5bn

2012 2013 2014 2015 2016 2017

Global Learning Market Size ($m)

$3,335$3,520

$3,750$3,995

$4,250$4,530

gary.bragar@nelson-hall.com

Providers Interviewed Include

U.S. Based LBPO Providers Interviewed

Accenture Aon Hewitt Aptara Cognizant Expertus GP Strategies Corp IBM Global Services

Intrepid Learning Solutions

KnowledgeAdvisors* Raytheon Professional

Services TrainingFolks Xerox

*KnowledgeAdvisors is not an LBPO provider, interviewed for learning analytics

U.K. Based LBPO Providers Interviewed

Capita

KnowledgePool

NorthgateArinso

Asia Pacific Based LBPO Providers Interviewed

Australia Seertech Solutions Talent2

India Genpact Infosys HCL Mahindra Satyam Neeyamo NIIT

Learning BPO Specialist Providers

Aptara Cognizant Expertus GP Strategies Intrepid Learning

Solutions KnowledgePool

NIIT QA Raytheon Professional

Services Seertech Solutions TrainingFolks

MPHRO Providers with LBPO Capability as Standalone Service

Accenture Aon Hewitt Capita Genpact HCL IBM Global Services

Infosys Mahindra Satyam Neeyamo NorthgateArinso Talent2 Xerox

Client LBPO Drivers

1. Cost effectiveness and efficiency2. Talent development to improve workforce

capability and performance: War for talent a driving factor

3. Client reinvestment in learning; But they no longer have the capability internally

4. Improved business results Improved productivity and faster speed to market

5. Increased levels of innovation, including: Technology, new ideas and process improvement

LBPO accelerates speed of learning, increases client satisfaction, reduces costs & improves business results Provider Examples Benefits

Raytheon Professional Services

For a fortune 500 client’s finance organization, objectives were to increase knowledge and skills, increase use of key performance development tools & transform culture

+170% employees trained & $cost sav. of 5% per student

IBM For a beverage company needing to be SOX compliant, training 1,500 employees in 1 month in English & French

Training time reduced by 75%

NIIT For a major U.S. Insurance company revamped its product line by developing customized training & improving business performance in 3 months

57% agents increased quotes,

53% incr premiums

Accenture For a multinational consumer good co. increased sales via development of a training campaign to address slow sales growth, market share & brand penetration in China

$50m increase in sales

Talent2 For a metals and mining client’s IT learning group, developed standard templates, updated and validated 2,000 course materials to be common

19% less “how to: calls to the helpdesk

Inhibitors for Learning Outsourcing

1. Resistance to change Lack of buy-in from business CLO’s want to build empire

2. Learning fragmented across the business No champion and decision maker

responsible for overall budget3. Lack of/difficulty building business case 4. Invested in learning internally

Currently satisfied, no burning platform

Top LBPO Vendor Selection Criteria

1. Expertise, proven capability and experience, with referenceable clients

2. Value proposition; better quality of services at a lower price, paying on consumption of services

3. Best cultural fit and partnership

4. Breadth of services, including access to talent domains beyond learning

5. Global capability incl. delivery & transformation

6. Domain expertise / technology capability

Key Vendor Challenges

Providing quantifiable results and references in clients own industry

Ability to help clients lower cost while improving service at the same time

Present global learning solutions

Present innovative technological solutions

Client utilization of analytics

How Can We Make it Work?

Critical Success Factors for Learning BPO

1. Obtain client buy-in Using demonstrated cost & ROI results

With client references & retention rates

2. Continuously develop technological capability and provide change management

3. Be innovative, proactively introduce new ideas, srvs.

4. Ability to partner and/or acquire for service delivery & technology, including global delivery capability

5. Reduce client fear/resistance to change with data

Learning BPO Trends

Services Client’s Are Buying

E-learning accounts for 55% of learning delivery, a 7% increase since 2010

Full learning BPO has begun to increase but selective LBPO accelerates led by content development and learning strategy Content development to convert ILT to e-learning and

VLT to expedite learning deployment and increase speed to competence; while at the same time decreasing delivery of ILT to reduce costs

Strategy/consulting, incl. to strengthen development of talent and implementation of social learning

The Advent of Social Learning

Social learning does not = social media Conner and Bingham “social learning is

people becoming more informed, gaining a wider perspective, and being able to make better decisions by engaging with others. Learning happens with and through other people, as a matter of participating in a community, not just by acquiring knowledge”

Types of Social Learning

Formal = virtual instructor-led training (VLT), that is collaborative, including via: Text chat, whiteboard, break out rooms, polling

questions, surveys, video, application sharing, etc.

Informal, including: Discussion forums and learning communities, for

experienced employees and for onboarding of new hires and mentoring

Wiki’s and Blogs using social interfaces, etc.

What Types of Social Learning Are Being Used

Collaborative VLT LBPO vendors own technology

Including web 2.0 portals and the use of discussion forums and learning communities, which may also be built by the client’s internal IT organization

Commercial technology examples Saba Centra, Cornerstone Connect

Wiki’s and blogs used for social interaction

Top Drivers for Social Learning

1. Speed to competence

2. Demographic shift / how new employees want to learn

3. Improved talent management/engagement

4. A more cost effective way of learning

5. Learning enablement 90% of learning takes place outside of the

classroom

Do Clients Have a Formal Social Learning Strategy?

Only 15% of companies have a formal learning strategy. Of those that do not:

1/3 not even begun to address it, 20% are beginning to address it

35% in early stages of exploration, experimentation & implementation

Of those with a strategy or in early stages 30% outsourced an aspect to an LBPO provider of which 15% are

managing social learning pilots

Providers are helping clients including with: Consulting on use and an engaging user experience

Technology selection, implementation & management

Provision of VLT & a few monitoring performance & effectiveness

Future State of Learning BPO

• Growth sectors include energy, healthcare, financial services, retail and manufacturing

• Selective LBPO contracts outpace full LBPO led by content development (though full LBPO increasing)

• Client learning spend increases for job skill training and professional development

• Learning is an integrated and integral component of talent management

• Client’s budget for social learning

Future State of Learning BPO

• E-learning continues to exceed ILT, including VLT for dispersed workforces ILT reduces to 40% market by 2015, then stabilizes M-learning increases including for content development

• M&A and partnering continue to strengthen delivery capability and geographic expansion

• Extended enterprise learning increases as client’s seek same benefits for their customers & suppliers

• Offshore delivery continues growth as client’s increase their investment in learning, but at lower costs

Questions?gary.bragar@nelson-hall.com

http://www.nelson-hall.com/service-line-programs/hr-outsourcing/market-analyses/

State of Learning BPO market NelsonHall Webinar 13 11-21

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Transcript of State of Learning BPO market NelsonHall Webinar 13 11-21

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