ig mergers are in vogue again. In terms of dollar volume, 2005 was the biggest
year for worldwide corporate merger activity since 2000. All those newly supersized
companies inevitably develop extra-large training and development needs. And those
needs are driving change in the training and development outsourcing field.
"When people are doing lots of acquisitions, it creates a lot of people who need
to be trained," says Jack Kramer, vice president of global alliances at SumTotal
Systems Inc., a provider of learning and business performance services. "They need
to be taught who the new company is, what the values are."
Helping indoctrinate new employees is just one item on a growing list of tasks
that expanding organizations often ask vendors to provide. Bigger companies seek
assistance not just in delivering services, but also in coordinating and tracking
far-flung training networks.
With increased size comes more complexity. As a result, big organizations in
need of training help are more often shopping for vendors with long track records
and demonstrable results.
"Our customers are requiring a lot more sophistication and experience," Kramer
says. When pitching training and development services to large organizations, Kramer
says, "companies want to see where you have done this 10 or 15 times before."
Given those demands, it’s no surprise that merger mania is also sweeping the
outsourced learning sector. The most recent major deals took place in 2005, marked
by Saba’s $60 million takeover of Centra Software and SumTotal Systems’ acquisition
of Pathlore Software for $48 million. Also in 2005, Oracle finally closed its controversial
$10 billion takeover of PeopleSoft. Both enterprise resource planning systems included
learning management capabilities.
The human resources outsourcing group at Hewitt Associates reports that companies
frequently seek two levels of outsourced learning services: training programs and
management of the vendors that provide those programs. Many companies still haven’t
centralized vendor management and sourcing. In some companies, managers at different
levels and locations all have the authority to order up a training program. That
can lead to duplication.
Will Hipwell, vice president of marketing at GeoLearning Inc., a learning services
management company, says organizations are moving toward a clearinghouse approach
to outsourced training services.
Customers, he says, "want to centralize everything." That means hiring a vendor
to manage a range of learning resources, from webcasts to instructor-led training
to knowledge bases to mentors. With that arrangement, a client feels that "whatever
I need, I can go to one place and figure out how to get it," Hipwell says.
Workforce Management, May 22, 2006, p. 28
-- Subscribe Now!
= Member Only
