Learning Services

Get lean. Get aligned. Get going. Xerox Point of View Paper September 2009

Get lean. Get aligned. Get going. Do you know what you spend to deliver training? It might shock you. If you do know, are the benefits your company reaps worth the investment? Does your CEO think so? Whether you lead training, human resources, operations, sales or finance, odds are your training delivery costs are difficult to justify. For the average corporation, training represents just 0.5 to 1% of revenues, according to industry analyst firm Training Industry, Inc.1 Nearly 50% of the typical training budget is spent on delivery and administration.2

Nearly 50% of the typical training budget is spent on delivery and administration.

It’s true. Training delivery can be complex and expensive. But how can you tell if the cost you’re paying is too high?

Research by ASTD and the Institute for Corporate Productivity (i4CP) revealed that nearly seven out of ten training executives were examining budgets as part of company-wide cost management initiatives. All were seeking ways to become more efficient at delivering training. More than half had restricted travel for learners and cut investments in seminars and workshops.3

The cost of inefficiency There are clear indicators of excessive training delivery costs. Low utilization of instructors and classrooms, low class fill rates, and high administrative overhead are among the ‘red flags’ that you may be spending too much.

Travel restrictions work in the short-term. But what can you do to create lasting value? How can you strategically reduce delivery costs and boost performance? Consider two growing trends:

What can you do if you recognize the signs? First, understand what inefficiency costs you. In the past, few companies had a firm grasp on the costs of training delivery, from recruiting and on-boarding instructors to facilities management and materials fulfillment. But the recession is a game-changer.

Increased use of technology-enabled learning Despite the increasing array of technologies available, most training is still instructor-led and classroom- based. Instead, look at increasing the proportion of training you deliver via technology: virtual classrooms, self-paced e-learning, simulations and newer collaborative or “social” learning technologies. ASTD and i4CP report 38% of organizations are actively shifting toward greater use of e-learning and virtual delivery and nearly 60% believe they should do more. Outsourced training delivery Evaluate potential cost savings from outsourcing training delivery. According to a study by Training Industry and Expertus in 2008, 29% of organizations are likely to outsource some or all of their training delivery.4 Further, Bersin & Associates report that the use of external instructors increased from 42% to 69% for large businesses between 2007 and 2008.5 Both trends reflect a broader and increasingly urgent question as to how well the learning function supports business goals.

Get lean. Get aligned. Get going.

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How do you begin to tackle these challenges?

Key training delivery challenges organizations face

Many organizations want to improve efficiency but are unsure where to begin. There are initial steps you can take either on your own or with an experienced learning services partner:

Interviews conducted by Xerox in 2008 suggest business alignment is indeed a concern. Learning executives at leading global companies raised six key challenges endemic to executing their global training requirements:

Assess the current state or your organization. An accurate“scorecard” benchmarked against industry best practice will reveal problems you may not have considered.

• Efficiency Low utilization wastes money, as do redundant expenditures created by decentralized delivery models. • Scalability Training organizations cannot scale to meet fluctuating demand. • Global capacity Training organizations are strained to meet the challenges of entering new markets. • Operations accurate Forecasting and budgeting is difficult. Many struggle to understand internal and external demands. • Technology Most want to use more technology-enabled learning, but the shift to technology-enabled learning requires expertise, support and management.

Model the business impact. After determining your organization’s strengths and weaknesses, model the financial impact of potential changes.

• Strategic alignment Many have no enterprise learning strategy, nor have they assessed their training functions to define baseline performance and identify areas for improvement.

ASTD and i4CP report 38% of organizations are actively shifting toward greater use of e-learning and virtual delivery and nearly 60% believe they should do more.

Develop a plan. After figuring out what’s not working and why it matters, focus on identifying how to close performance gaps, reduce costs, and improve quality. A willingness to look at what isn’t working and to consider alternative training execution models is essential to becoming a leaner, higher performing training organization. In this environment, who can afford to be anything other?

Get lean. Get aligned. Get going.

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What does a lean, high-performance learning organization look like? Business aligned

Scalable

• Establish clear enterprise learning governance model

• Scale delivery up or down to meet demand

• Select learning programs according to organizational priorities and investment capacity • Forecast and allocate resources accordingly

Get lean. Get aligned. Get going.

• Optimize your mix of internal and external instructors to meet agility, expertise and cost requirements • Put plans and partnerships in place to expand operations into growth areas. (e.g., new regions or countries)

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Technologyempowered • Ensure technology delivery mix reflects best practice for your industry, company size, learner population, and business focus • Use technology to automate processes that support learning administration

Endnotes 1. H arward, Doug. “Top 10 Market Predictions for 2009: Are YOU ready for the New Training Industry?” http://www.trainingindustry.com/articles/2009-predictions.aspx. January 27, 2009. 2. O’Leonard, Karen. The Corporate Learning Factbook 2008 – Statistics, Benchmarks and Analysis of the U.S. Corporate Training Market. Bersin & Associates Industry Report v.1.0, January 2008. 3. ASTD/i4CP. Organizational Learning in Tough Economic Times: Challenges and Opportunities. Draft Manuscript, March 2009. 4. Training Industry, Inc. and Expertus, Inc. Training Delivery: Optimizing Costs. March 2008. 5. Bersin & Associates. The Corporate Learning Factbook 2009: Benchmarks, Trends and Analysis of the U.S. Corporate Training Market. January 2009.

About the author Sam Herring is CEO and Co-Founder of Intrepid Learning Inc. and leads the company’s consulting, marketing and major account management operations. A member of ASTD’s Board of Directors (Chair-Elect for 2011), Sam is recognized as a “who’s who” training industry thought leader by TrainingIndustry.com. He frequently speaks at major industry events on designing effective corporate learning strategies, trends in learning technology, and best practices in vendor selection and outsourcing.

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