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Random despatches from places where L&D meets software and systems

How to decide: outsource or DIY?

Ms RF, who works in the automotive industry, asks “We need to put together a short series of e-learning modules for people in our dealerships but we haven’t yet made the decision whether to try to build these in-house or whether to outsource. What advice do you have for me, and, if we go for the outsourcing option, how should we best evaluate candidate suppliers?”

Some organisations that I’m familiar with have been round the in versus out thing a few times with seemingly no general conclusions as to what constitutes best practice. Both your questions are complex and the goodness of any suggestions very much depends on your specific needs and situation. Take a look at the following table and see if it stirs any feelings either way:

 

Outsourcing

In-house

Pros

·   Greater skills and experience

·   Can adapt / re-use their software assets

·   Can better leverage their software / equipment, etc.

·   Probably better at adapting to “scope creep”

·   Will probably get it done quicker

·   If you haven’t got the right people, you can hire them

·   Fewer conflicting priorities

·   Your subject matter expertise is in-house; less noise in communicating what you want and need

·   Arguably more control over the project

 

Cons

·   Costs can soon rack up in the absence of a really tight brief

·   Your project is only one among many

·   You may not get exactly what you want unless you constantly manage the relationship

·   High set up costs: all your assets have to be created from scratch; new software / equipment may be needed

·   Need capabilities probably not core to your organisation

·   Steep learning curve

If this doesn’t help, then do please try to talk to some counterparts in similar but non-competing organisations. Make friends of the people who have similar job titles to your own, if possible find people who have done both and get them to be upfront about the relativities between the two. If and when you decide to go out-house, then a good way to proceed is to evaluate potential suppliers against a set of weighted criteria you should agree with your other stakeholders well in advance. Different criteria seem to have had more or less influence over the years as the industry has matured. See what you think of the following “6P” partner checklist.

In olden days (i.e. 10 years+ !), buyers were most interested in seeing a vendor’s Products. This was probably because quality was arguably more variable in those days, people didn’t always know what they wanted anyway and also because, frankly, a small number of folks simply didn’t know what else to evaluate. Product questions are still good ones to weigh up, though, and could include:

  • Products
  • Will the guys on the floor in your dealerships like the supplier’s work and get the benefit?
  • Are you impressed with the nature and scope of the supplier’s content offerings?
  • Are they sufficiently exciting, engaging and effective?
  • Are they usable?
  • Can they supply their content in different ways, to work in their own LMS, with yours or with a 3rd party LMS?
  • Can they demonstrate they can deliver to your infrastructure?

More sophisticated purchasers also wanted to triangulate their own perceptions and expectations against those of others, so the PR dimension came into play:

  • PR
  • Do the suppliers have compelling case studies?
  • Have you verified them with the relevant client organisation?
  • How good are the customer references you’ve taken up?
  • Have the different suppliers proven ROLI with any of their clients?

As it began to dawn on people that e-learning presented quite significant levels of risk and competition deepened, purchasers placed more importance on Payments criteria.

  • Payments
  • What kinds of revenue are they doing and are they profitable?
  • What do you think about their pricing structure?
  • Will they give you a fixed price (and if not, why not?)
  • Are their on-top variable costs clear and reasonable?

On really big projects, clients often got consultants in to manage the tendering process for them, which very often resulted in huge RFI documents, not all of which predicted a quality outcome. Nowadays, the focus seems to be shifting more towards Process and Pservice (sorry!), so consider asking:

  • Process
  • How will they communicate with you throughout?
  • Do they have a clear project management process?
  • How have they handled different kinds of problem in the past?
  • How will they deal with slippage?
  • Pservice
  • How will they support you and your end-users going forwards?
  • Do they offer maintenance packages / SLA's?
  • How do they expect to develop the relationship beyond the current project?

Above all, outsourcing e-learning needs to be a partnership, in which the People bounce ideas off one another, complement one another’s strengths and compensate for one another’s weaknesses. Very often the quality of the finished product is largely predicted by that of the relationship – and understanding – between the parties.

  • People
  • Are you being "consulted with" or are you being sold to?
  • Do they have sufficient breadth and depth of skills to do a great job?
  • Are they genuinely interested in the educational process?
  • Do they think "bigger picture?"
  • Are they up for partnering with you through thick and thin?
  • Can they help you build an organisation where learning and performance are seen as the lifeblood of the company?

A big question you need to consider is, are they going to be there for you if the proverbial hits the fan? When you come to think about it, it’s a bit like going to the GP. Would you rather talk to someone who asked you loads of insightful questions, treated you as an individual and seemed committed to ensuring your long-term wellbeing or be sold a quick fix cure? The time when e-learning was doled out like so many aspirins has long since had its day.


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