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You are here : Executive Essentials : Top 10 Strategies for Training Outsourcing

TOP 10 STRATEGIES FOR TRAINING OUTSOURCING 
Training Outsourcing is a rapidly growing business strategy...not a trend! More and more, corporate executives are recognizing the value of using business process outsourcing companies to perform non-core activities that are important to the value generation of the company.

Like other approaches to streamlining supply chain relationships, training outsourcing provides many financial benefits to both parties. In addition, it helps management focus on its core business by reducing non-value added distractions, it increases sales to customers outside the current distribution channels, and it provides greater scalability of overhead costs.

But training outsourcing relationships must be structured properly. There are many documented failures because fundamental strategies were not followed. This document provides the Top 10 Successful Strategies for getting started with outsourcing your training function.
1. Talk to the Experts
Corporate executives are always interested in reducing the risk of failure and increasing the probability of success. Outsourcing is not an informal agreement between two companies. It is too risky and complicated to initiate without soliciting advice from those who have experienced similar relationships and those who focus on the industry. There are professionals in the training outsourcing industry who specialize in working with companies of all sizes to lead them through the process. They are your insurance policy against mistakes that can cost your company significant time and money.

Get to know the business facilitators who are recognized as experts in training outsourcing, learn about those who have worked to establish BPO agreements, understand what has made partnerships successful and why some arrangements have failed. Do your homework and remember that outsourcing any business function is all about risk mitigation.
2. Understand Your Business Drivers
Now that you know about the industry, make sure you understand your organization! What are the business drivers for your company? Are you in a growth mode? Are you trying to reduce costs because revenues are flat? Are your customers having problems adopting your products? Do you need to reach more customers by expanding your reach? Do you need to improve the efficiency of your internal staff?

These and many more questions will influence your decisions to outsource and more importantly, who you should consider for outsourcing. Outsourcing is a long-term relationship that requires the right partners to achieve success.
3. Appoint a Champion
The process of outsourcing requires strong leadership and attention to detail. The most successful engagements have an appointed, central leader with decision-making authority. It is essential that the ‘Champion’ understands the process, the risks associated with success and failure, the structure of the contracting agreement, and support roles needed to make the relationship work.
4. Create a Plan
All successful projects have clear vision and defined objectives and responsibilities. Speed in transition is essential because the longer the process, the more expensive the engagement. Create a solid project plan, identify responsible parties and, hold team members accountable. Remember that not all participants in the process have the same vested interest. Some may not be motivated to drive the process. This is where a well conceived plan helps keep things moving and on track.
5. Build Your Team
Cross functional expertise reduces the risks and increases the probability of success. A project team made up of seasoned professionals who understand your business is essential. Aside from your project champion, your team should consist of a senior member of your training staff who knows your business as well as the industry; a finance or cost accounting professional who can build a financial model to evaluate the short and long term implications of a deal, a procurement or supply management professional who has experience in negotiations and contract documentation, a human resource professional to deal with the needs of personnel, and legal counsel for final contract review.
6. Commit to a Partnership
Outsourcing is different from a supplier/buyer relationship. The terms of the agreement are different. In an outsourcing partnership, you share access to valuable proprietary information. Both parties are mutually responsible for success. Success is only achieved by partnering with an outsourcing services company. This is no place for an adversarial relationship. Outsourcing is not about how to get as much out of the partner as you can. It is all about forming an agreement where both companies are rewarded from a mutually beneficial relationship. Corporate cultures and executives who do not fully adhere to this philosophy should not consider outsourcing. Controlling and manipulating strategies have short lives in outsourcing. If both companies are not profitable, then the relationship will not last. And remember, the greatest cost in outsourcing is the cost of changing partners.
7. Value Your People
Outsourcing is a services business. Services are performed by people. High quality, low-cost processes are best performed by motivated employees who buy into the plan. Although fixed assets are sometimes a part of an outsourced deal, people are always a major component. Recognize that success in an outsourced business relationship comes from people who trust each other with information allowing employees to be creative.
8. Measure Results
Knowing the return on your investment is fundamental. Create a partnership that clearly defines the business requirements, articulates service level metrics, rewards parties for successes above standards, and holds parties accountable for failure to meet targets. Subjective measures create ambiguity and puts undue stress on the relationship. Maximize the ‘carrots’ that make your partner tick and minimize the ‘sticks’ that penalize poor performance.
9. Expect the Unexpected
No one has a pristine clear crystal ball. The future is unknown and as much as we think that something cannot happen, “Murphy” proves us wrong and, it does happen. When creating the contractual terms of a relationship, make certain that contingencies are in place to deal with occurrences that seem unlikely or impossible. As much as you want to plan for a long term relationship, the end of the relationship is inevitable. Be sure there are exit clauses such as ‘termination for cause’, ‘termination for convenience’, and ‘repatriation strategies'. Include terms that deal with volumes hitting levels you never imagined – both high and low. Do your best to plan for scenarios that involve 100% of the probabilities.
10. Mitigate Your Risk
Many experts believe that outsourcing training is all about mitigating risks – for all parties. The company who wishes to outsource their non-core activities is looking to reduce the risks of not performing at an acceptable level. The supplier of services uses pricing strategies to mitigate the risk of service volumes not hitting planned levels. All parties involved are planning for success but using financial models to reduce or hedge their risks.


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