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

Learning 2.0 Portals – From Buzz to Abundant Value to Increasing Innovation

In blogs earlier this year, I wrote about “The Buzz About Learning 2.0 Portals” and “The Abundant Value of Learning 2.0 Portals.” We’re now seeing providers building increasingly innovative components and capabilities into their learning portals, which can exponentially increase their value and usage.

For example, just yesterday Expertus announced it was recently awarded a virtual instructor-led training (ILT) contract by a large global software provider. Expertus will develop a virtual ILT program to train the client’s sales force on new products, and to educate technical sales architects. Delivered over the ExpertusOne social learning platform, components of the program include hosted live events around the world, live chat with international subject matter experts, hands-on labs, virtual classrooms, online proctors and technical support. And the client’s anticipated cost savings – through elimination of worldwide travel and events expenses – is up to $5 million. While these types of portals of course require a financial investment, such potential hefty cost savings provide justification.

Other examples:

• OCLC, a nonprofit, membership-based computer library service and research organization needed to bring together library staff and organizations around the world, and provide a venue that would allow them to engage in discussions, participate in groups, share content and engage in collaborative learning development. The solution it selected was Plateau’s Talent Gateway platform, which integrates social tools, content management, Plateau learning management, customer management and virtual meeting spaces. It’s enabling OCLC members to connect with colleagues across the library community using social tools, create custom content, join in conversations, create ad-hoc communities and learn relevant skills.

• Liberty Mutual is using Cornerstone OnDemand’s Cornerstone Connect to facilitate informal learning as part of the company’s front line management training program. Participants take part in an in-person, weeklong program, supported by supplemental online courses via Cornerstone’s learning management system. Using Cornerstone Connect, Liberty Mutual’s team has created a management community to maximize and extend the benefits of the training program. Components of the Cornerstone Connect platform include rich user profiles, status updates, live feed views, communities of practice, discussion boards, blogs, wikis, podcasts, rating and sharing of content, knowledge management, tag clouds and RSS feeds.

One of the common, and critical, capabilities across all these platforms – as well as those already offered or under development by other providers – is engagement. In an isolated e-learning environment, it’s all too easy for the mind to wander (“Did I remember to send that memo?” “Hum, I wonder if there’s any cake in the break room?”) and equally challenging to feel a sense of connection (“Is anyone else unclear about that point the instructor just made?” “Who can I ask, other than my boss?”) Social media capabilities such as discussion boards and live chats with peers and subject matter experts can significantly enhance engagement in, and the resulting value of, e-learning.

Expect to see an increase in uptake of Learning 2.0 portals that enable engagement via social media capabilities. The rapid deployment, learning enhancement and cost savings value prop is über compelling.

Gary Bragar, Lead HRO Analyst, NelsonHall

The Abundant Value Proposition of Learning 2.0 Portals

In my February 11 blog on “The Buzz about Learning 2.0 Portals,” I referenced research conducted by Expertus and Training Industry, Inc. which found that within the next two years, 45 percent of survey respondents plan to upgrade their existing learning portal and 14 percent plan to launch a new learning portal. And based on the results of a Learning BPO research study I recently launched, this comes as no surprise as the value of learning portals is becoming increasingly clear.

Learning 2.0 portals have a lot of functionality and can deliver significant benefits to the end-user company and its employees. Here is just a sampling of what I found to be noteworthy capabilities per a recent demo of Expertus’ customizable, web-based, social learning platform:

• The ability to consolidate learning information from what may be multiple legacy systems into one portal to view:

«   All mandatory company training programs along with due dates, a brief description and time required, and a click-of-a-button launch of a selected training program

«   Recommended learning and ratings by peers who have already taken programs. Imagine the value of this, for example, to a salesperson who has to quickly learn about a new product for an upcoming meeting with a prospect

«   The latest blog on topics related to specific interest areas or job functions

•  The ability to obtain insights from and ask questions of peers via a chat feature within the portal

•  The ability to access subject matter experts 24 x 7 – via the portal – for assistance when new learning programs are launched and a question arises. Imagine…no more needing to determine who to email or call and then waiting for a response, or getting caught in an IVR menu jungle

•  The ability to link training to talent management and create career paths and development plans, etc.

Need tangible proof of the value of learning 2.0 portals? One Expertus client achieved in four months a 388 percent increase in course registration volume, a 178 percent increase in new courses offered, and an increase of 123 percent for new learner registrations.

Of course there are many learning 2.0 portal providers in today’s marketplace, including Norway-based Edvantage Group which just yesterday announced a contract to provide a learning portal for MOT. MOT is an educational organization working with young people in Norway and South Africa to improve school environments via social learning methods such as peer-to-peer communication, exercises, stories, role playing and dialogues with other young people. 

A word of advice here to buyers. If/when you decide to implement a learning 2.0 portal, don’t pick a provider based solely on its technology offering, as technology is only as good as it is used. You’ll want a provider that can teach you how to or manage for you: 1) putting all the different learning environments, curricula and social networking functionality into the portal; 2) ensuring that content is continually updated; and 3) communicating the value of the portal throughout the enterprise, and conducting virtual learning demonstrations on how to use and best leverage the portal.

You’ll also want to make decisions on other portal-based aspects such as whether you want to provide all employees with unlimited access to learning or add in certain restrictions, whether all courses will be free or some will be fee-based, etc. A savvy learning provider can guide you through these types of decisions and build them into the system for you, as required.

Have you implemented a learning 2.0 portal? If so, I’d very much like to hear comments on your experiences, what worked well, what didn’t, what challenges you encountered, how the portal has been received by your employee base, the value you’ve achieved to date, etc.

Gary Bragar, Lead HRO Analyst, NelsonHall

Preparing to Learn Again in 2010

The headline of an article in yesterday’s USA Today read, “Economy is growing, but job market remains soft’”. While this isn’t happy news for those still out of work, it bodes well and is a bellwether for companies – and those employed by companies – that place a premium on developing the skills of their existing staff, as well as for providers of outsourced learning services.

As economic fears begin to ease, albeit modestly, I predict buyer demand for outsourced learning will heat up for several key reasons:

• Organizations know they must invest in developing existing talent they want to retain – for example, as I wrote about in a blog last year, approximately 50 percent of employed Americans plan to look for new opportunities when the economy begins to turn around, and dissatisfaction with their current jobs and lack of clear career path opportunities are contributing factors

• Although job growth is slow to come, unemployment has stabilized, and monthly job reductions are nowhere as severe as a year ago and will return to growth. As a result, organizations must be prepared to train new hires

• Training student hours, budgets and staffs were all cut during the downturn. As companies prepare to return training to the forefront, they are unlikely to return to the previous levels of spend and staff in the near term due to continued uncertainty. Learning outsourcing can help bridge the gap

The outsourced learning vendor community is providing indicators of preparation for growth. For example, on December 30, 2009, Sagard Capital Partners, L.P. completed a $20 million investment in General Physics (GP) Strategies, a global learning provider, signaling not only confidence in GP Strategies as a company but also a resurgence in learning services as organizations begin to again invest in their people. And on January 4, 2010, GP Strategies acquired PerformTech, Inc., an eLearning provider of custom training solutions, including content development to U.S. government agencies. As eLearning accounts for more than 50 percent of all learning today given organizations’ need to control costs, this was a highly strategic acquisition for GP Strategies. An indicator of the strength of the eLearning market comes from Edvantage Group, an eLearning provider based in Norway, which recently announced it surpassed one million course completions in 2009.

Based on the inherent benefits to buyers, and increased capabilities and retooled pricing models of providers, I believe we will see solid growth in outsourced learning through 2013. And those buyers and providers making the investment now will be thankful they did…and so will their employees.

Gary Bragar, Lead HRO Analyst, NelsonHall