Learning BPO Market Morphing by M&As, Partnerships and Organics to Meet Evolving Client Needs

Per the findings from NelsonHall’s recently published “Targeting Learning BPO” report, we saw only a modest growth rate of 2.5 percent in this HRO segment in 2009 – 2010, but predict a global compound average annual growth rate of 8.4 percent through our 2014 forecast period. So what’s driving this growth from the buy-side, and how are providers responding?

Buyers’ top driver for learning BPO (LBPO) remains reducing the cost of the learning function, followed by increasing the effectiveness and improving the quality of learning for employees. Other drivers include gaining a better return on the learning investment, right-time/right-level access to specialist trainers, obtaining a well-defined process from a provider with the ability to deliver higher quality, aligning learning with strategic objectives, contract flexibility and utilizing cutting-edge technologies for learning services delivery.

To meet these buyer needs, providers must step up their game in a range of areas including the ability to manage a global network of delivery suppliers, and providing access to the technologies required to effectively deliver and manage all aspects of the learning function via learning management systems, Web 2.0., virtual instructor-led training, e-learning, m-learning, virtual world technologies, gaming and learning analytics. Providers also need to have global learning capabilities across all four learning towers: Learning Administration, Content Development, Learning Delivery and Technology.

LBPO providers are taking a variety of paths to address these evolving, and in cases daunting, buyer requirements. Some, including Raytheon Professional Services, Expertus, Edvantage Group and RWD, are growing organically, with new service offerings including new technology, content and geographic delivery capabilities. Acquisitions and partnerships are also occurring.

2010 acquisitions in the LBPO space include:

• Kenexa’s acquisition of The Centre for High Performance Development to strengthen leadership develop and management training
• Talent2’s purchase of Origin HR and Sugar International to expand vocational training capabilities
• General Physics’ acquisition of Marton House to strengthen e-learning content development in the U.K., and its purchase of PerformTech to strengthen learning services for the U.S. government

 And 2010 LBPO partnerships include:

• NIIT and SENA to provide learning services in Colombia
• Edvantage Group and Mediapharm to offer a pharma online portal

Bottom line is, for the LBPO market to grow and prosper, it is all about meeting client’s learning needs: delivering what they need, where they need it, when they need it and how they need it. Organic is great, but not always feasible, and not necessarily always the best option for the involved parties. Thus, I beleive we will continue to see more acquisitions, and even more partnerships, in the LBPO space in the next 12 months.

Gary Bragar, Lead HRO Analyst, NelsonHall

The Buzz About Learning 2.0 Portals

Since their inception, learning portals have become a pretty ubiquitous tool leveraged by organizations to enable learners to find out about available training and purchase or gain access to the content. In fact, according to a 2009 survey from Training Industry, Inc., 93 percent of organizations were using learning portals. But the survey also found that nearly 60 percent planned to either launch a new portal or upgrade their existing portals.

Enter Learning 2.0 portals, which have leap-frogged ahead of their predecessors in terms of capabilities and benefits available to organizations and individual users. Using Bersin & Associates’ definition, a Learning 2.0 portal:

 • Leverages global training content in many forms

• Changes worker expectation of when training information is available

• Harnesses the power of collaborative learning (Web 2.0) to share knowledge among peers

• Creates role-based context around the flood of learning content

• Supports the talent management strategy

• Frees you from the limitations of the enterprise LMS

I’d add to that list of benefits that Learning 2.0 portals enable organizations to aggregate learning content from different enterprise learning systems, and, in some cases, rate or grade the delivered learning.

So, do Learning 2.0 portals really deliver on their value proposition? You betcha.

A corporate user – read: non-vendor/non-hype – description of a Learning 2.0 portal, published in the eLearning Weekly blog, said, “We implemented a learning portal at work several months back, and it has turned out to be one of the best things I could recommend to an organization for improving access to learning materials. In the past, I’ve worked at organizations where we would tell learners, ‘Look in the LMS’ to find materials and information. I’ve realized that a learning portal creates a self-service environment for users that can’t be beat. They can go, search, find what they need, and move on. It’s a Google-like experience, for what has generally become an information-on-demand culture.”

And EMC Corporation – which had an existing Learning Management System (LMS) and wanted to make it easier for its employees to research available learning and register for courses but didn’t have the time or budget to upgrade the LMS – implemented a learning portal and obtained a 50 percent increase in portal visits, 55 percent increase in self-service registration and a 15 percent reduction in support costs.

I believe usage of Learning 2.0 portals will exponentially increase for several reasons:

• As M&A activity will continue in nearly all industries, combining the capabilities of both companies’ learning systems in one portal, as well as offering employees a single self-service place to go to learn about and gain a deeper understanding of the new company would be extremely valuable (critical note: under no circumstances am I suggesting here that a learning portal should take the place of a comprehensive change management communications program in an M&A situation!)

• Employee self-service is an ever-growing trend as organizations implement it to reduce costs, improve employee satisfaction and deliver the Web 2.0-type capabilities millennials in the workforce openly and adamantly expect, as do their Gen X counterparts to a large extent

• As I’ve said numerous times in various blogs, as the recession recedes, organizations will again place more emphasis on investing in their people, and learning portals will make it easier for them to do so

So a word to HRO service providers: if you don’t yet offer a Learning 2.0 portal, you may want to strongly consider doing so…the value proposition is there.

And buyers: if you’ve implemented a Learning 2.0 portal, I would love to hear your thoughts and experiences!

Gary Bragar, Lead HRO Analyst, NelsonHall