Learning BPO Vendor
Landscape ~~~
Market Assessment November 2008
LEARNING SERVICES VENDOR LANDSCAPE NelsonHall
2008 by NelsonHall. i November 2008
About NelsonHall
NelsonHall provides buy-side and sell-side organizations with deeper research and analyses in front office, mid-office and back office BPO than any other research firm in the world. The company’s subscription-based model provides subscribers with robust market analyses, case studies, vendor assessments, contract analyses, market reports and access to a content-rich BPO contracts database. The firm covers a wide range of industries including financial services, government and utilities sectors, and tracks worldwide and regional BPO activity. NelsonHall’s home page is www.nelson-hall.com.
The company tracks business services activity. In particular, NelsonHall focuses on the following business services and process areas:
Front-office customer management services
Middle office industry-specific processing services such as policy administration and claims processing services
Back office support services such as HR services, finance & accounting and procurement services.
NelsonHall provides information about business process outsourcing to its clients in a variety of forms, including within:
NelsonHall’s BPO & Outsourcing subscription service, to assist organizations in identifying the most promising areas of BPO activity
Workshops, to assist organizations in identifying the most appropriate areas of BPO for their organization
Custom assessments, to assist buy-side organizations in benchmarking individual processes and to assist vendors in successfully taking BPO concepts to market.
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2008 by NelsonHall. ii November 2008
Abstract
The purpose of this study is to analyze the vendor landscape for learning BPO services globally.
NelsonHall’s Learning BPO vendor landscape report is designed for:
Executives in purchasing organizations seeking an understanding of learning BPO offered and vendor capabilities in this area
Consultants advising purchasing organizations in service and vendor selection
Marketing, sales and business managers developing strategies to target segments of the learning BPO market.
The geographic scope of the study is Asia Pacific, North America, and Europe.
Copyright © 2006 by NelsonHall. All rights reserved. Printed in the United Kingdom. No part of the publication may be reproduced or distributed in any form, or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.
The information provided in this report shall be used only by the employees of and within the current corporate structure of NelsonHall’s clients, and will not be disclosed to any other organization or person including parent, subsidiary, or affiliated organization without prior written consent of NelsonHall.
NelsonHall exercises its best efforts in preparation of the information provided in this report and believe the information contained herein to be accurate. However, NelsonHall shall have no liability for any loss or expense that may result from incompleteness or inaccuracy of the information provided.
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Glossary
ASTD = American Society for Training and Development
CBT = Computer Based Training
CSAT = Customer Satisfaction
CSR = Customer Service Representative
CDH = Consumer Directed Healthcare
DCCS = Delta College Corporate Services (learning services vendor)
EE = Extended Enterprise (channel partners, resellers, customers)
ILT = Instructor Led Training
IPR = Intellectual Property Rights
LBPO = Learning Business Process Outsourcing
LCMS = Learning Content Management System
LMS = Learning Management System
KAdvisors = KnowledgeAdvisors (learning services vendor)
KPool = KnowledgePool (learning services vendor)
MPHRS = Multi-Process Human Resource Services
RPS = Raytheon Professional Services (learning services vendor)
SMB = Small & Medium Businesses
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Table of Contents
About NelsonHall i
Abstract ii
Glossary iii
Table of Contents iv
Vendor Analysis 1
Vendor Positioning 1 Vendor Market Shares 14
Learning BPO Vendor Profiles 18
Accenture Learning Services 18 Affiliated Computer Services 26 Convergys Employee Care 35 Fidelity Talent Management Services 41 General Physics Corporation 44 Genpact 53 GeoLearning 58 Hewitt Associates 62 IBM Global Services 68 Intrepid Learning Solutions 75 KnowledgePool 81 The Learning Factor 85 Logica 90 NIIT Ltd (including Element K) 95
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Talent 2 Learning Services 104 Raytheon Professional Services 112 RWD Technologies, LLC 120 Xpertise 127
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Chapter
1
Vendor Analysis
A Vendor Positioning
Learning Services provision remains focused on the three traditional segments:
Project-based services
Selective learning BPO services
Full scope learning BPO services
Definitions of these services are still valid from the first release of this report in May 2007:
Project-based; focusing on the shorter-term (less than 1 year) project based services within the learning function, typically within content design and development and often within eLearning.
These relationships are typically focused on a particular training need, sometimes within a very specific domain or geography. For example, a 6 month project to train a Nordic sales force in a new product before its launch within the region
Selective Learning BPO; focusing on the provision of services to supplement an existing learning function within an organization.
Selective BPO arrangements include learning administration services, sometimes for the specific projects alone, and also typically include management of one or two other learning processes, e.g. technology or delivery.
These contracts are selective arrangements approximately 1-3 years in length and are managed through master service agreements which cover the basic terms of the contract, with specific project terms determined as needs arise.
Full Learning BPO; focusing on the operational management of the entire learning function for an organization; providing multiple learning processes to the client organization either in one or multiple regions.
These arrangements typically include the management of all four principal processes within learning; administration, technology, content and delivery within a longer term (3-10 year) contract.
Contracts may also include other HR functions, and are often managed through more complex pricing arrangements involving gainshare, and transactional pricing.
Exhibit I-1 shows vendor positioning by learning service offering for those vendors most active within the marketplace; with some vendors clearly spanning more than one market segment.
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Exhibit I-1 Learning Services Vendor Positioning by Service Segment
Learning Services Segment
Major Players Significant Players
Project-Based GeoLearning LionBridge Parity Training SumTotal Systems
Expertus NIIT KnowledgeAdvisors KnowledgePlanet PPI Learning Synergy Training
Selective BPO ACS CGS Expertus Global Knowledge Element K NIIT Innovatia KnoweldgePool PMI
CaliberPoint Convergys DCCS Fidelity Genpact Global Learning Alliance Hewitt Mzinga Skillsoft
Full Learning BPO Accenture Convergys GPC IBM RPS RWD Technologies Xpertise
ACS Capita DCCS LogicaCMG KnowledgePool Intrepid The Learning Factor Talent2
Within this market segmentation, vendor targeting has not changed significantly since this report was released in June 2007, with the majority of vendors focused on the provision of learning for larger organizations.
Localized vendors, such as Talent2, Capita and DCCS continue to be exceptions to this, targeting organizations with c. 1,000+ employees. For example:
Capita targets organizations with 4,000+ employees within the U.K. Previously, the organization targeted organizations with 2,000+ employees, but the company has found it difficult to generate businesses cases with organizations of this size, so has increased its target focus
DCCS targets organizations with 2,000 – 20,000 employees within the U.S.
Talent2 targets organizations with 1,000+ employees in A.P.
The Learning Factor sweet spot is organizations with 2,000 – 30,000 employees in A.P.
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Exhibit I-2 provides details of vendor positioning by company size. Exhibit I-2
Learning Services Vendor Positioning by Company Size
Vendor Principal Target Market Segment
<5,000 5,000 – 20,000 >20,000
Acccenture FLBPO --- Medium High
ACS FLBPO --- Medium to High High
CGS, Inc FLBPO Low High Medium
CLS FLBPO --- Medium to High High
DCCS FLBPO Medium to High High ---
GP Corporation FLBPO --- Medium High
IBM Global Services FLBPO --- --- High
Intrepid FLBPO --- Medium to High High
Logica FLBPO Low Medium High
RPS FLBPO --- --- High
RWD Technologies FLBPO --- Medium to High High
Talent2 FLBPO Medium High Medium
The Learning Factor FLBPO High High Medium
Xpertise FLBPO --- Medium to High High
Caliberpoint SLBPO --- Medium High
Capita SLBPO; C / D Medium High Low
Element K SLBPO; C / T --- High High
Expertus SLBPO; T --- High High
Fidelity SLBPO; T, MP --- --- High
Genpact SLBPO; C --- Medium to High High
GLA SLBPO Medium to High High Medium
Hewitt SLBPO; T, MP --- Medium to High High
Innovatia SLBPO; C --- Medium High
KnowledgePool SLBPO --- High Medium
Mzinga SLBPO; T Medium Medium High
NIIT SLBPO; C / D --- Medium High
Parity Training SLBPO; D --- Medium to High High
GeoLearning T --- Medium to High High
KnowledgeAdvisors T Low Medium to High High
SABA T Medium High High
SumTotal Systems T --- Medium to High High Key; FLBPO = Full LBPO, SLBPO = Selective LBPO, D=Delivery, C=Content, T=Technology, MP = Multi-Process
Note: All SLBPO arrangements include administration.
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Significant developments for the vendors offering LBPO services since the release of the report 18 months ago include:
Re-evaluation of project-based revenues; some vendors previously targeting growth only within the selective and full service LBPO segments, and letting project work take a back-seat, in the short-to-medium term, are looking to project-based revenues to “shore-up” revenue streams due to the tough market conditions
Re-bundling of learning within the wider HR outsourcing portfolio; interestingly, 80% of the vendors that provide standalone learning BPO alongside other HRO services have re-organized market-facing business units so that learning is now part of the wider multi-process HR outsourcing offering. NelsonHall perceives that this is due to:
Contracts within the marketplace in HRO being “scoped down” into standalone learning, so organizations with a more integrated approach are more likely to be “in the running” for these contracts
Organizations within multi-process HRO positioning themselves as “higher value” talent management providers, incorporating HR services both within consulting and outsourcing to better manage human capital. As such, talent development, in the form of learning BPO, needs to be a key component within any integrated offering
Aspiration to develop integrated workforce analytics, providing a wider view of an organization, and relating analytics to business outcomes. This requires effective integration of process and technology across process areas, and pulling learning back into the wider multi-process offering enables a more holistic approach to analytics
Development of integrated technology offerings to ultimately offer the single view of the employee record to HR managers, with content integrated from multiple HR processes, such as learning activities, compensation, performance goals, benefits, and succession plans.
There are still barriers to this; not least within HR itself as “ownership” of the employee record is a contentious point within most organizations. Integration of LBPO within the multi-process offer should enable easier technology integration, though the technology, or the cultural shift, is still not there yet.
Emphasis on development of web 2.0 technologies within learning, encompassing social networking, and the encouragement of more informal learning (through mentoring and coaching). This is being done alongside an increasing utilization of virtual classroom delivery, and the continued development and enhancement of blended learning delivery models.
All vendors within the learning BPO marketplace understand the importance of utilizing new technologies, such as community development, wikis and blogs within learning to:
Develop and encourage informal knowledge networks within organizations, including opportunities to develop communities of practice, and subject matter expertise with coaching becoming a more integral part of organization’s learning modes
Create wikis within organizations as a more significant source of learning for employees, and giving employees ownership of these as means to encourage both the wiki and the employee’s development
Develop secure discussion forums within organizations for the active exchange of ideas, and lessons learned within the working environment
Develop learning style to better engage with the younger workforce as individuals from the “gaming” generation enter the workforce. IBM estimates
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that c. 81% of the business population who are under 34 years old are already gamers.
Development of robust supplier management offerings; primarily to address the increasingly requirement for cost reduction within the learning function. Organizations are looking to specialist LBPO providers to improve supplier rationalization, leveraging their existing supplier relationships, and utilizing procurement skillsets to improve contract negotiations, and supplier performance within the learning sphere. This follows the trend within RPO relationships for vendors to be tasked with more effective management of recruitment agencies for their clients
Evaluation (and entry) into extended enterprise learning BPO space; in order to maximize organization revenues, sales and marketing functions within organizations are exploring outsourced learning within the extended enterprise. Approximately a quarters of revenues in LBPO is sourced from the extended enterprise, with those vendors not generating revenues here are expected to develop offerings over the short-to-medium term.
This trend is apparent despite the courtship of organizations for extended enterprise training being with a different part of an organization; relationships originate from the sales and marketing function.
In addition, internal training functions within an organization can be highly resistant to “handing off” such training to an LBPO partner, with the biggest inhibitor to such extended enterprise contracts actually the internal competition.
Though integration of the learning function with the wider talent management imperatives within organizations is still important, this is considered by all full learning BPO organizations to be part of learning BPO “DNA” and no-longer a differentiator. However, learning management systems are enhancing their technology offerings to include both wider talent management platforms, for example performance and compensation management technologies, as well as collaboration modules. For example, GeoLearning, SABA and SumTotal all have capabilities outside the originally defined learning content management system in the latest releases of their products.
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Exhibit I-3 lists the strengths and weaknesses of individual learning services vendors. Exhibit I-3
Learning Services Vendor Strengths & Weaknesses
Vendor Strengths Weaknesses
Accenture New integrated human capital talent management approach Transformational approach Business outcome HRO approach European and Asian client base Analytics capabilities Workforce specific offerings Focus on innovation, e.g. patents pending
70% of revenues generated from the telecoms and financial services sectors Perception as high cost in marketplace Consultative approach can be off-putting for some organizations
ACS Strong North American capabilities Buck consulting and human capital management capabilities Strategic sourcing capabilities Proprietary technology Focus on both employee and customer learning BPO High profile Hertz contract win CFO University
Less business in full LBPO due to Intellinex heritage Difficulties in penetrating Europe
CaliberPoint Brand in India attracts strong candidates Cost reduction capabilities, c. 30% related to labor arbitrage alone Experience within Oracle and LMS/LCMS KnowHow knowledge repository for knowledge management
No experience in managing multi-tower learning BPO contracts Only 10% of revenues from learning administration within learning practice, the rest is infrastructure related No European language capabilities outside English
Capita Strong U.K. Brand Financial strength can assist company in penetrating growing LBPO marketplace Commitment of Capita to HR BPO developing proposition Vendor management capabilities Public and financial services sector experience
No presence outside U.K. Focus more on content / delivery with only 15 - 20% of business involving administration Retail business a distraction; and has much slower growth than LBPO Public sector mentality
CGS, Inc. Virtual classroom capabilities IT domain expertise Extended enterprise capabilities Presence in the IT sector Relationship with SABA
Low brand recognition in LBPO Not seen as a BPO provider; they are an IT-focused organization No experience outside IT domain No presence within Europe, but looking to expand here, and do deliver in the region
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Vendor Strengths Weaknesses
CLS eLearning capabilities from DigitalThink Presence in U.S. Customer analytics capabilities assisting in developing workforce analytics Offshore presence, and options in Philippines for delivery Presence in healthcare sector
Primary focus on customer service agent training No European capabilities, and company has generally struggled to expand within Europe HR management business unit currently struggling for profitability
DCCS Automotive sector presence U.S. Brand Global delivery capabilities, particularly within Asia Mid-market focus, fewer players here Partnering capabilities with MPHR providers leveraging DCCS delivery structure
Reliance on automotive sector No plans to enter European LBPO space No offshore presence, and no plans to develop Still ILT focused, need to adapt in future for blended delivery No supplier management offerings
Expertus Robust technology platform Offshore capabilities, focused on India currently, but with plans to expand both in country and possibly externally in future Extended enterprise focus (60% of total revenues) North American presence Ambitious growth plans, c. 60% to 2008/09
Technology led BPO offering; often not the best “sell” in the BPO space where companies look for operational capabilities Focus on providing training administration offshore perhaps still too soon for the marketplace Only 20% of delivery managed through eLearning
Fidelity Brand recognition of Fidelity within the financial services sector Ability to leverage learning & development capabilities (c. 600 employees) in Fidelity Strong technology offerings, well integrated with other HR process areas Development of midmarket proposition including learning administration
Limited experience in learning administration (only one client currently) Lack of penetration outside U.S. No extended enterprise experience
Genpact GE client base, with strength in FS, manufacturing and healthcare Content design and development capabilities Analytics emphasis, particularly; heritage from GE Offshore presence (90% total FTEs) Plans to expand to Dalian eLearning capabilities (80% courses delivered through this mode) Willingness to incorporate onsite personnel in solutions
Limited full LBPO capabilities Limited onshore presence for onsite requirements within learning BPO, e.g. instructional designers Limited European experience, and struggling to expand in this region overall in BPO, and specifically in learning Emphasis on per FTE pricing Talent management still not an emphasis for the company, and no wider HRO play Limited blended delivery
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Vendor Strengths Weaknesses
GeoLearning Robust technology platform Willingness to partner for access to other learning processes and technologies Industry specific tech offerings Expansion of offering to include collaboration technology and performance management GeoMaestro offering for middle market organizations partnering and development of “best-in-class” technology within offering, e.g. SuccessFactors, Metrics that Matter
Technology focus, not focused on developing full LBPO offer
Global Learning Alliance
European focus Supplier management skills Partnership network IT domain expertise Analytics offering Works with current LBPO providers to enable European presence Breadth of industry experience; Pharma 35%, Food Manu 25%, Services 20%, Other 20%
No presence in U.S., or a location in the U.K., though the company has clients here Not full service LBPO Perception as IT trainer, looking to expand portfolio and change this; 35% is already non-IT Little eLearning, 95% ILT
GP Corporation Focus on standalone LBPO Extensive client list (see profile) North American presence Operational focus Manufacturing and utilities experience Retail experience through Via acquisition Domain expertise in Sales through Sandy Measurement and reporting capabilities Acquisitive nature to potentially assist with growth in Europe Emphasis on blended learning, and collaborative working Collaborative experience within the extended enterprise; e.g. windowsmobile training for mobile phone retailers
Bundling of learning in MPHR can eliminate them as vendor within target marketplace No European revenues, though addressing this potentially through acquisition Lack of traction within telecoms and public sector Perceived limited soft skill domain expertise
Hewitt Global MPHR offering Integrated approach to learning and talent management Offshore presence, including management of reporting metrics Learning consultancy capabilities through Hewitt consulting practice
Only focused on providing learning within MPHR relationships No experience outside learning admin and technology offerings, with no plans to expand service offerings Limited experience of managing large learning programs
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Vendor Strengths Weaknesses
IBM Global Services Global brand Focus on talent management and integrated analytics offerings Ability to leverage own internal education capabilities Global network of content development locations Emphasis on new learning modes, mLearning, virtual worlds Emphasis on next generation learning for Gen Y Success in MPHR potentially breeds success in LBPO Learning Select offering
Failure to penetrate extended enterprise learning marketplace Potential over emphasis on technology offerings within the service
Innovatia Focus on virtual classroom delivery eLearning capabilities Focus on the extended enterprise Presence in Canada (headquarters here) and United States Expansion into public sector defense industry Technology domain expertise
Focused only on tech training Limited experience in employee training (c. 10% of revenues) Reliance on telecoms and technology sectors (c. 98% of total revenues) Lack of own offshore admin presence, but this is under review Extended collaboration tools such as blogs and wikis “in production” Only 20% delivery through ILT
Intrepid Learning Solutions
Vocal, reference-able clients, e.g. Boeing, Microsoft Focus on development of innovative learning solutions as part of LBPO offer, e.g. “bite-size learning”, job-aids, etc. Strong brand in the mid-market U.S. Increased targeting effort in financial services; economic conditions mean more not less outsourcing? Learning consulting and research practice integration with LBPO offerings Refocus on project-based revenues to complement longer term LBPO revenues Development of offshore presence through a partner SumTotal partnership
No published recent full LBPO contract wins Limited experience of managing global full LBPO arrangements due to shorter term project heritage Lack of visible talent management strategy Limited European presence, but the company is looking to expand here Nearly 90% of revenues from manufacturing and high technology sector
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Vendor Strengths Weaknesses
KnowledgePool U.K. Capabilities Supplier management capabilities Training administration specialists Linkage of learning to performance management Level 4 analytics capabilities, emphasizing business outcomes Development of learning strategy consultancy Consultative learner care approach Gainshare pricing model
No presence outside the U.K.; though company is looking to expand now No offshore capabilities, though this only likely to be an issue in the medium rather than short term Limited client base, reliant on these clients renewing if growth stutters Technology-centric offering No experience of learning delivery beyond administration tower Technology through partners so less ultimate control of development Possible acquisition target for orgs looking to enter LBPO in Europe?
The Learning Factor Established Asia Pacific brand Presence in financial services sector Offering organization around “centers of excellence” in specific learning services Collaborate network approach Janison LMS specific to A.P. region
80% of revenues from financial services and IT sector; over reliance? Lack of eLearning experience Lack of brand knowledge outside local markets
Logica European, particularly beyond U.K., capabilities Training center network in Germany and France; allowing targeting for localized contracts Public sector / defense experience eLearning contracts, particularly relating to DELCs Partnering capabilities, in both delivery and content dev’t Modular pricing mLearning capabilities through other Logica business units Potential to leverage HRO capabilities in Manila
No North American presence No published contracts in recent years Perception as a less well established BPO player IT-focused, often won through ITO contract base (50% of contracts from Logica ITO clients) No other HR capabilities, beyond payroll, for targeting MPHR contracts
QA - Xpertise Strategic focus to develop LBPO business Demonstrable cost reduction successes (see profile) Delivery heritage IT domain expertise Supplier management capabilities Partnering capabilities Experience in professional services sector
Unrest caused by recent merger with QA-IQ Perception as an IT training organization, particularly following QA-IQ acquisition No presence outside the U.K. No offshore capabilities No wider HRO capabilities, though perhaps partnering with MPHRO providers is an option in the U.K?
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Vendor Strengths Weaknesses
NIIT Content development capabilities, particularly in eLearning Experience in education sector in India could be translated to other locations Extensive global delivery presence, particularly within emerging markets (see profile) Extensive content library through Element K Partnership opportunities as delivery / content providers for LBPO and MPHR providers Assessment services Breadth of industry experience Critical mistake analysis methodology
Perception as a low cost provider despite ability to provide higher value services, such as analytics, delivery, etc. Market perception as a delivery / content provider, not a full service provider Limited experience of managing full service LBPO relationships, typically project or selective BPO contracts won
Mzinga Excellent community-based capabilities, including community moderation Forefront of “next generation” learning development KnowledgePlanet heritage technologies Midmarket focus SAAS model alongside LBPO eLearning experience Partnering capabilities for content Expanded tech to include talent management modules, e.g. performance, compensation, etc. Healthcare industry experience
Technology focus Limited multi-tower LBPO experience Project-based heritage No administration capabilities offshore, though the company are exploring this Need to grow brand recognition in LBPO space
Parity Training Delivery capabilities Partnering capabilities with LBPO and MPHR providers, particularly those looking to expand in Europe IT domain expertise Shift in targeting focus from FS due to tough conditions; expect more from utilities, telecoms, central government
Potential disruption caused by un-successful acquisition by Xpertise (now QA-Xpertise) Perception as a delivery organization, and LBPO remains of limited focus for the company Possible acquisition target for LBPO providers looking at Europe? Contract with HBOS; may require re-scaling / re-negotiation
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Vendor Strengths Weaknesses
PMI Creation of new entity, essential.genius, to focus on development of LBPO support for PMI delivery organization Strong consultancy capabilities Performance management domain expertise 50% business generated from organizations outside the U.K. (E.U. 50%, U.K. 25%, U.S. 15%, RoW 10%) essential.surveys platform
Perception as delivery-focused, though trying to address with creation of new entity Potential acquisition target? Community technology solution not in current release, expected in future releases Not NelsonHall “true” LBPO as only provides admin services for its own courses
RPS Focus on full learning BPO Vocal client examples, with tangible results Experience within extended enterprise Catapult and Catalyst methodologies for identification of informal networks and enabling global content Experience of managing longer term, global learning programs Analytics and performance management capabilities through consulting practice Experience in emerging markets, e.g. Russia Technical training capabilities, particularly within manufacturing sector
Perception of reliance on manufacturing sector Difficulty in getting HR to accept experience within extended enterprise deals is valid within employee-focused contracts Slow to penetrate European marketplace Limited offshore presence, and mainly through partnerships Low profile leadership domain expertise; typically thought of as technical training specialists
RWD Technologies Industry specific offerings In-house delivery capabilities Ability to integrate offering with human performance consulting capability Proprietary technology Midmarket technology offerings Focus on emerging market targeting, e.g. in Middle East in particular
Perception as a technology and tech training provider Focus on North America No offshore presence
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Vendor Strengths Weaknesses
Talent2 Experience in Asia Pacific Breadth of Asian language capabilities One of the few LOCAL providers that also offers services outside LBPO, e.g. RPO, HR Administration Focus on mLearning due to penetration of mobile devices in AP Middle Eastern targeting Emphasis on “just-in-time” learning Nearshore in Kuala Lumpur Strong A.P. brands in client list, e.g. Biliton, Telstra, etc.
Limited brand knowledge outside Asia Pacific Limited experience in eLearning due to AP market dynamics Southrock technology not as well known as other LMS No offshore capabilities for penetration into markets outside AP
SumTotal Systems Leading provider of learning software Extension of software suite to include talent management modules Inclusion of community module within software suite Partnerships with most major LBPO and MPHR providers
Limited presence and brand recognition outside North America
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B Vendor Market Shares
Exhibit I-4 shows estimated global learning BPO service revenues and market shares for identified vendors. Exhibit I-4
Estimated Global Learning BPO Revenues: 2007
Company Estimated Revs ($m) Estimated Share (%)
Acccenture 250 11.4
IBM Global Services 235 10.7
GP Physics Corporation 210 9.6
Raytheon 200 9.1
RWD Technologies 105 4.8
Convergys EC 90 4.1
ACS 85 3.9
KnowledgePool 49 2.2
LogicaCMG 36 1.6
CGS 36 1.6
NIIT 35 1.6
Talent2 23 1.0
Xpertise 20 0.9
Hewitt 20 0.9
Parity Training 13 0.6
Intrepid Learning Solutions 13 0.6
Capita 13 0.6
expertus 8 0.4
Delta College Corporate Services 6 0.3
Innovatia 6 0.3
Sub-Total 1,447 66.1
Total 2,197 100
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Exhibits I-5 to I-7 show by geography estimated learning BPO revenues and market shares for identified vendors. Exhibit I-5
Estimated North American Learning BPO Revenues: 2006
Company Estimated Revs ($m) Estimated Share (%)
IBM Global Services 200 12.2
GP Physics Corporation 187 11.4
Raytheon 180 11.0
Acccenture 100 6.1
RWD Technologies 95 5.8
Convergys EC 90 5.5
ACS 72 4.4
CGS 32 2.0
NIIT 23 1.4
Hewitt 19 1.2
Intrepid Learning Solutions 13 0.8
expertus 7 0.4
Delta College Corporate Services 6 0.4
Innovatia 6 0.3
Mzinga 5 0.3
GenPact 3 0.2
The Learning Factor 2 0.1
CaliberPoint 1 0.1
GLA 1 0.04
Sub-total 1,041 80
Total 1,640 100
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Exhibit I-6 Estimated European Learning BPO Revenues: 2006
Company Estimated Revs ($m) Estimated Share (%)
Accenture 125 27.4
KnowledgePool 49 10.7
Logica 36 7.9
IBM Global Services 35 7.7
Raytheon 20 4.4
Xpertise 20 4.3
GP Physics Corporation 16 3.4
Capita 13 2.8
Parity Training 13 2.8
ACS 13 2.8
RWD Technologies 11 2.3
NIIT 6 1.3
CGS 3 0.6
PMI 2 0.3
GLA 1 0.3
expertus 1 0.2
Hewitt 1 0.2
CaliberPoint 1 0.2
The Learning Factor 0.4 0.1
Genpact 0.4 0.1
Sub-total 365 80
Total 457 100
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Exhibit I-7 Estimated U.K. Learning BPO Revenues: 2006
Company Estimated Revs ($m) Estimated Share (%)
Accenture 50 17.2%
KnowledgePool 49 16.9%
IBM Global Services 29 10.0%
Logica 23 7.9%
Xpertise 20 6.8%
Raytheon 16 5.5%
Capita 13 4.5%
Parity Training 13 4.5%
GP Physics Corporation 13 4.3%
ACS 9 2.9%
NIIT 6 2.1%
RWD Technologies 5 1.8%
CaliberPoint 1 0.3%
Hewitt 1 0.2%
GLA 1 0.2%
Subtotal 248 85.4
Total 290 100
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Chapter
2
Learning BPO Vendor Profiles
A Accenture Learning Services
Accenture has significant BPO capabilities including:
Back office (finance and accounting, HR and procurement services)
Middle office: e.g. banking, insurance and capital markets-specific services
Front office: contact center operations.
Cross-Industry BPO service offerings include:
Customer management services, through Accenture Customer Contact Services
Finance and accounting through Accenture Finance Solutions
Human resources, through Accenture Human Capital Services (AHCS). This group was formed in April 2008 and integrates Accenture’s HR consulting, HR services, and learning services business segments.
Accenture perceives that there is less value in positioning the company’s learning services business as a standalone unit, particularly with the increased interest in an integrated talent management strategy, which encompasses:
Recruiting
Learning services
Performance management
Succession planning
Compensation management.
Middle market back-office services, following the acquisition of Savista, through Accenture BPO Services
Procurement, through Accenture Procurement Solutions.
NelsonHall estimates overall BPO revenues for Accenture in FY 2007 were $2.13Bn.
Within Accenture Human Capital Services, NelsonHall estimates the company generated c. $580m in HRO revenues in FY2007. this includes:
$325m from multi-process HR outsourcing
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$250m from learning BPO services.
AHCS estimates the company has 8,000 employees focused on talent management including:
3,000+ employees within talent and organizational performance consulting
3,500+ employees within multi-process HRO
1,500+ employees within learning BPO.
The following report focuses on the LBPO services offered to organizations within Accenture Human Capital Services.
AHCS offers learning BPO across all four learning process areas through the company’s “Comprehensive Learning Outsourcing” services.
These are provided through seven key components:
“Business Interlock”; aligning the learning strategy with a company’s objectives
Content Sourcing; developing and buying in content based on learning requirements within an organization
Content Exchange; development and creation of a central repository for content and knowledge objects
Delivery Services; planning, management and delivery of training across multiple channels
Learning Administration; learning management and administrative services
Learning Operations; management of the complete learning process, including service control, service integration and continuous improvement
“Managing Learning as a Business”; management of the learning function to enable effective monitoring and measurement. This service includes:
Governance; implementation of a governance structure within the learning organization to help understand an organizations business sufficiently to enable learning outcomes to affect business results
“Upside value creation”; determine value objectives, utilizing financial measures such as shareholder value, book or market value, employee or customer value, etc., that are the most closely linked to learning investment
Efficiency planning and management; utilization of best-cost management techniques to drive business results with the most efficient use of resources.
NelsonHall estimates Accenture’s global learning BPO revenues to be c. $250m in FY 2007.
Revenues by geography in FY 2007 were estimated to be:
United States - $100m
Europe - $125m, including $50m within the U.K.
Rest of the World - $25m, with the majority of this is Australia.
AHCS continues to focus on developing the company’s full LBPO offering, rather than developing the project-based portfolio which was the company’s mainstay prior to 2006. The launch of Accenture Human Capital Services, has integrated the LBPO business into the comprehensive HRO offering within the company.
The key focus within Accenture’s LBPO business is to position the service as an integral part of an organization’s talent management strategy.
The company achieves this through:
Within learning administration:
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Establishing a foundation for practically applying talent management, e.g. design of a new service delivery model, and common standardized processes to drive compliance
Implementation of appropriate blended solutions, to reduce costs
Introduce learning technologies to increase automation, there-by reducing manual administration tasks for learning and line managers
Increase focus on learning being “run as a business”, with greater emphasis on metrics and business outcomes
Within high-touch learning services, such as curriculum design, content design and development:
Enable effective talent management by integrating learning with other HR processes, for example linking learning to competency models for an organization including the ability to incorporate individual annual learning plans which are reviewed every 90 days to make sure individuals are on target
Improve curriculum effectiveness
Manage quality of learning through appropriate measurement of that learning to the business
Optimize learning activities by aligning the learning function to specific business outcomes, such as employee engagement and workforce productivity (through Accenture Business Interlock methodologies).
During the course of Accenture’s LBPO relationships, the company focuses on:
In Year One (aiming to achieve 20% of total cost savings); Learning administration and vendor management incorporating:
Vendor and curriculum rationalization
Platform unification
Point of contact unification
Instructor management and scheduling unification
Content migration, rather than content development.
In Years Two-Three (aiming to gain a maximum of a further 20% of total cost savings); Transformation of the learning function, including development of blended learning delivery, introduction of “just-in-time” learning (as its required on the job) and learning “nuggets” (short learning pieces posted to employees as they are relevant), and access to the internet for provision of the learning function.
In Years Four+; Innovation within the learning function, including managing services across clients to realize economies of scale benefits, utilizing analytics to insure the right learning is delivered to the right people at the right time, and continuing to develop and innovate within the learning environment.
AHCS offers blended learning delivery environments, and NelsonHall estimates that c. 60% of delivery (as at Nov 2008) within the company’s client base is done online. This increases significantly within knowledge-based industries such as high technology, where online learning can rise to 70 – 80% of total learning managed.
Key statistics within Accenture LBPO include:
Services delivered in 143 countries
Approximately 1m learning services users
Learning Management System available in 9 languages
Approximately 500 classrooms worldwide
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Approximately 120 global instructors teaching 17,000+ course titles, plus access to other instructors through the company’s provider network
AHCS Learning expects developments within its offering to include:
Greater flexibility within content management for organizations; Accenture is working with SumTotal to enable content to be defined to the object level, in order to assist organizations in developing content more quickly and effectively
Increasing focus on developing collaborative environments, both within an organization’s learning structure, and in the implementation of a new outsourced learning environment. For example, for subject matter experts, Accenture has created a collaborative tool to allow instructional designers and SMEs to work jointly on documents and projects, and use blogs to work collaboratively. This has resulted in productivity on specific projects increasing
Development of effective scheduling capabilities / technology, that is “more than” just a basic scheduling tool but will enable “intelligent” scheduling, for example:
Who is the best instructor for this event?
What’s the best location for this event?
What information in the LMS is relevant to this event, e.g. Who attended? What was the enrollment ratio? What is the certification status of those attending? Etc.
Have the relevant pre-course materials been sent out? If not, the system should be able to either communicate with those who organize this, or send out the details electronically itself
Invest in the development of mobile learning to address the workforce requirement for “just-in-time” learning services, e.g. access to job aids, or course assessments.
AHCS Learning has focused considerable investment on the development of innovative approaches to learning, with c. 70 patents awarded for learning solutions. These patents are in the areas of performance simulation, virtual coach and goal-based learning.
In virtual coaching, Accenture has patents for:
Creating chat rooms with multiple roles for multiple participants
Interactive simulations utilizing a remote knowledge base.
In the business simulation arena patents include:
Goal based system tailored to the characteristics of a particular user
Goal based educational system with support for dynamic tailored feedback
Simulation system for a simulation engine with a help website and process engine
A dynamic toolbar in a tutorial system
AHCS has a developed a structured approach to innovation and will continue to grow its intellectual property portfolio. For example, Accenture has a U.S. patent pending for a new approach for measuring the business impact and effectiveness of learning.
The majority of AHCS Learning clients are utilizing Accenture’s proprietary LMS, which is based on SumTotal System.
However, Accenture does work with other platforms if required, though the company estimates that less than 10% of its current client base already had an LMS on contract signature.
Accenture utilizes a number of software providers for learning analytics tools:
Business Objects
Knowledge Advisors
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Zeroed-In Technology.
Accenture Learning has c. 1,500 employees across the globe, located within 8 delivery centers.
Exhibit II-1 provides details of Accenture Learning Services delivery centers. Exhibit II-1
Accenture Learning Services Delivery Centers: Nov 2008
Location Content Development Call Center Services
North America
Chicago √ √
Denver √ √
San Antonio √
Europe
Budapest √
Warsaw √
Yarnfield √ √
Asia Pacific
Bangalore √ √
Oceania
Brisbane √ Source: AHCS
NelsonHall estimates that c. 10% of the company’s employees within learning are located offshore.
Accenture Learning Services targets organizations through the Accenture Operating Groups.
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Exhibit II-2 provides details of these. Exhibit II-2
Accenture Operating Groups and Industry Segments
Comms & High Tech
Financial Services
Products
Resources
Government
Communications
Banking Automotive Chemicals Government
Electronics & High Tech
Capital Markets
Industrial Equipment
Energy
Media & Entertainment
Insurance Health & Life Sciences
Natural Resources (forest products, metals & mining)
Consumer Goods & Services
Utilities
Retail
Transportation & Travel Services
Source: Accenture
Estimated AHCS Learning industry revenues are:
Telecoms – 40%
Financial Services – 30%
Product (see earlier for definition) 25%
Others – 5%.
Geographically, AHCS Learning is targeting all regions, but in particular:
North America
Europe; United Kingdom, Ireland, Nordics and Germany
Asia; China.
AHCS Learning clients have, on average, 15,000 – 40,000 employees, though the company also serves organizations with c. 100,000 employees.
However, as AHCS Learning provides services for channel partners as well as employees, the number of learners can exceed the number of corporate employees. NelsonHall estimates that c. 40% of AHCS Learning business is focused on the extended enterprise.
Accenture Learning Services key longstanding client is Avaya, who awarded Accenture a learning BPO contract in October 2001, prior to the formation of Accenture Learning Services. The company included the provision of learning services to Avaya, and Accenture took over responsibility for Avaya University, including the development and delivery of web-based courses to customers, associates and Business Partners.
Approximately 200 personnel transferred to Accenture, implying contract revenues of approximately $20m per annum. This was one of the first examples of the transfer of learning services to a third-party. This approach has since become increasingly common, as high-tech companies have faced pressure for cost reduction in the
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delivery of support services. Accenture is providing white-labeled development of eLearning course material to a number of technology companies, e.g. Citrix.
Workforce-specific learning outsourcing offerings include:
Customer education for the hardware and software industry
Customer education for dealer networks
IT workforce enablement
Sales force effectiveness
Supply chain effectiveness
Other clients of Accenture Learning Services include:
Accenture itself: responsible for the creation of an eLearning infrastructure
Banco Galicia
Bank of Ireland, contract announced December 2005
BP’s Mid-Continent business unit: a contract from August 2000, for generation of Quick Hit solutions from field engineers, and longer-term solutions based on Action Learning Events
BellSouth: support in implementing a simulation training program for customer services representatives
BT, a separately announced contract to the multi-process extension in August 2005. This learning services contract was announced in July 2005, for a 5-year period, with a total contract value of £70m. Services provided within the contract include technical & safety training, and design, development and delivery of sales force and management training programs
DuPont: development of a 40-hour eLearning program for finance personnel with computer-and theatre-based performance simulation. Ultimately, over 4 years 1,450 personnel will undergo the program
Ford: design, build and management of a Web-based eLearning solution to deliver technical education to suppliers
Siemens: development of ACE (‘Achieving Finance and Control Excellence’), a 48-hour simulation exercise for 10,000 finance and business personnel globally, using a combination of technology and group-based simulation activities
Sprint: an eLearning program for Sprint’s finance and marketing personnel
Sun Microsystems: a Learning Services contract, announced September 2003, to provide instructor-led training developed with Java technologies and using the Solaris operating system. In use at Sun’s facilities and authorized Accenture training centers to Sun's customers in the U.S. and 11 countries in Europe. Sun will continue to focus on internal Sun technical training, instructor development and customer training on advanced courses
Telstra: a full LBPO contract, announced in November 2005, to design and build Telstra’s learning academy. Training covered employees within various areas including:
Field technicians
Network operations
Construction
Engineering
IT
Product management
Billing and procurement employees.
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The Telstra learning academy now supports c.19,000 employees and was launched in August 2006.
ACHS Learning focuses on “results driven learning”; and emphasizes the capabilities that the company can bring within analytics and aligning learning to business outcomes.
Exhibit II-3 provides details of three contracts where performance improvements were achieved following an outsourcing arrangement with Accenture. Exhibit II-3
Accenture Learning Services Results: May 2007
Client Industry Performance Improvements
Financial services 20% increase in cross-selling
13% increase in overall customer call quality
6% reduction in average call center handle time
33% reduction in time to proficiency for new hires.
300% more training delivered in a 12-month period at 25% less cost
70% reduction in compliance training time while increasing retention
Financial services 9% increase in sales conversion rates
9% increase in compliance
3% increase in value per sale
23% increase in employee confidence
Telecoms 35% increase in IP telephony sales in six months in Caribbean/Latin America region for those that completed new learning program
13% increase in sales funnel and 6% increase in close rates resulting from Sales Certification Program in measured control groups
Accelerated time to proficiency by up to 60% in some cases, returning 35,000 workdays to the company and business partners
Source: AHCS
AHCS learning contracts within learning are typically 5 years in length.
Pricing within ACHS learning is quoted on a per transaction or a per learner basis.
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B Affiliated Computer Services
Affiliated Computer Services (ACS) is an IT services and business process outsourcing provider, headquartered in Dallas, Texas. The company offers BPO services across all process areas; front, middle and back office. Traditionally, the organization has used acquisitions to grow its BPO businesses, and learning BPO is a prime example of this strategy. In FY2007, ACS’ BPO revenues were $4,322m.
In December 2002, the company signed its first multi-process HR outsourcing client, Motorola. ACS had expanded capabilities within this business to include benefits administration services through the acquisition of Mellon HR in May 2005.
Following this acquisition, the company perceived that Learning Services was likely to become a more critical process within multi-process HRO contracts. Therefore, ACS began looking for a potential target to augment its existing multi-process HR BPO capabilities.
In May 2006, the company entered the learning BPO space with the acquisition of Intellinex. Intellinex began life as the internal training organization within Ernst & Young, but was spun out of E&Y in 2000.
At the time of the acquisition, Intellinex had 300 personnel, with most located in offices in Cleveland, Ohio and Irving, Texas. Principal assets and capabilities that the acquisition brought to ACS included:
Content development and content management capabilities
More than 50,000 hours of learning content and curriculums
Range of learning managed services, including learning administration capabilities
Learning technology platform
Client base of 200 corporate clients and government agencies in North America and Europe, including Cisco Systems, Canon USA, Ernst & Young, and Turner Construction.
Since this acquisition, ACS has integrated the Intellinex capabilities into its HR BPO practice, but has also remained committed to selling standalone learning BPO. The company believes standalone learning BPO is still critical to the growth of its HR BPO revenues.
Following the acquisition, ACS now offers learning services through its ACS Learning Services (ACSL) business.
NelsonHall estimates that revenues from this business in FY2007 were c. $108m. From this total revenue base, NelsonHall perceives c. $85m is focused on delivery of selective and full learning BPO services, including those within the company’s multi-process HRO relationships.
Geographically, these revenues are estimated to be:
$72m from North American headquartered organizations
$13m from European organizations, of which $9m is generated within the U.K.
Learning Services offered by ACSL include:
Learning Strategy and Assessment Services; providing a learning consulting service, often as part of a wider learning BPO arrangement, to enable organizations to implement and develop a learning strategy suited to their business requirements. Services include gap analysis, change management and learning system design, including designing competency frameworks
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Strategic Sourcing Services; offering a learning vendor management service to organizations, including planning, transfer and management of contracts and services
Content and Curriculum Services; development and maintenance of content as required for organizations. Services include strategic diagnostic assessments, and the utilization of ACSL’s IDEAL instructional development methodology to develop content that is designed to meet performance goals. ACS has access to a specialized content library for finance professionals; CFO University
Content services are managed utilizing ACSL’s learning content management system.
Client content solutions within ACSL are increasingly including simulations and web 2.0 solutions such as:
Peer-to-peer networking
Podcasts
Collaboration and social networking tools
Virtual worlds or 3DI
Web services
Blogs and wikis.
Learning Administration Services; administration of learning function, including:
Logistics management
Vendor management
Learner care (learner call center services, communications, testing, etc.)
Compliance services.
Learning Technology Services; the company can administer all major LMS systems, and in addition has its own proprietary LMS from the Intellinex acquisition.
In addition, ACS learning services has a specifically branded service, ACS Finance Learning and Development Practice solution, which is designed for CFOs, controllers and finance executives to develop and manage employees involved within the finance function.
NelsonHall estimates that FY2007 revenues split were:
Content services, including strategy consulting – 63%
Technology services – 20%
Administration services, including vendor management - 17%.
ACSL offers learning services within the wider HR outsourcing framework, specifically as an important part of the organization’s talent management offering.
Exhibit II-4 illustrates the company’s integrated approach to talent management.
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Exhibit II-4 Integrated Talent Management Offering: Nov 2008
SOURCE: ACSL
Note: all details in red are the services provided by ACSL, other services are provided though Human Capital Services or Buck Consulting.
NelsonHall estimates that c. $20m (c. 23%) of FY2007 revenues were generated from clients involved in wider HR outsource, or human capital services contracts.
ACSL offers services both to employees and a company’s extended enterprise. NelsonHall estimates that c. 85% of the company’s FY2007 revenues were generated from providing learning services to employees.
Exhibit II-5 provides details of ACSL’s learning advisory and assessment services. Exhibit II-5
Learning Advisory and Assessment Services: Nov 2008
Source: ACSL
These services are critical to the development of a learning BPO relationship, and ACS Learning tends to bring learning strategy capabilities to the table in the early stages of a pursuit to frame requirements for the potential client.
Gap Analysis Plan for Change
Learning System Design
Learning System
Implementation
Current state
Learning effectiveness evaluation
Measurement needs
Business case
GovernanceChange
managementRoad-map for
execution, inc.PeopleProcessContentTechMeasure
Learning operations
Learning culture change
Performance solutions, inc.
Competencies Certifications Learning maps Curriculum
Design Technology
Solutions
ILTWeb Virtual Blended Performance
Support
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Increasingly, ACSL has seen interest within the company’s strategic sourcing services in its learning product portfolio. Exhibit II-6 provides details of this offering. Exhibit II-6
Strategic Sourcing Service Offering: Nov 2008
PLAN TRANSFER MANAGE
Assess current situation Define service level agreements and metrics
Acquire provider products / services
Define business, operational and legal requirements
Negotiate and assign contracts
Implement provider products / services
Prepare transformation and management plan
Support change management
Maintain provider products / services
Source: ACSL
ACSL has noticed an increase in interest within its strategic sourcing offering over the last 12-18 months, potentially due to the potential cost savings that can be achieved through adopting a rigorous vendor rationalization program. The company estimates that savings can be c. 15-20%.
Exhibit II-7 provides details of the company’s learning administration service offerings. Exhibit II-7
Learning Administration Services: Nov 2008
Source: ACSL
Within the company’s Learning Technology Service offering, the company provides learning managed support services including:
Hosted Infrastructure Management
Solution Management
Project Management.
LMS Facilities Materials
Fulfilment Instructors Registration
Instructions Materials Contract Performance
Communications Q&A Consultation Testing Tracking
Regulatory Certification Awards Tracking
Logistics Management
Vendor Management Learner Care Compliance
Repository, inc. Storage and archiving, version control, and case management
Governance
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Exbihit II-8 provides further details of these managed learning technology services. Exhibit II-8
Managed Support Services: Nov 2008
Managed Services
Complete Hosting Infrastructure• Production / Staging Environments
(Three Tiered Server Infrastructure, Network Hardware, Data Storage, and Internet Connectivity)
• Dedicated (Customer) T-1 Circuits
Comprehensive Platform Support Services• ASP Contract Services for Hosting
Infrastructure (Includes Server, Application, Database and Network Management)
• Global Content Distribution Network
• Platform Security (Access and Data)
• Technology and Data Integration• Scheduled Upgrade Service
Hosting Infrastructure
Project Management Service
• Scope of Service – Focus on Design and Implementation of Changes to Production Solution
• Measurement – Solution Quality Performance Matrix, and Customer Satisfaction Rating
• Tools – SLAs, Standard SOW
Functions
• Dedicated Program Manager
• Manage Customer requirements Definition and Solution Integration
• Co-Develop Project Scope, Deliverables, Timelines and Budgets
• Coordinate Resource Requirements
• Status Reporting
ProjectManagement
Solution Management Service• Scope of Service – Focus on
Production Solution Operations and Support
• Measurement – Issue Response and Resolution Matrix, and Customer Satisfaction Rating
• Tools – SLAs, Operations ScorecardFunctions• Dedicated Single Point of Customer
Contact• Help Desk Support Service• Troubleshooting Service• Solution Documentation• eCommerce Service• Platform Capacity Planning• Customer Care and Reporting
Solution Management
Source: ACSL
Core ACSL technology is offered to all clients:
Software applications; LMS / LCMS in SOA architecture environment
ACS Technology Suite; LCMS modules, including performance management, and integrated components, and the ACS ASP platform enabling the hosting and managed services
In addition to these core technology services, the company offers customized LMS extensions including:
Sophisticated Entitlement
Learning Maps
Certification
Continuing Professional Education (CPE)
Enhanced search
Customer specific site access
Customer managed pages
E-Commerce
Managed Learning Features
Analytics Dashboard
Administration; bulk registration, course and event management, and registration and wait list
Scheduling calendar
Reporting; pre-built / ad hoc, and customized
Systems integration capabilities
Content integration capabilities
Performance Management
Learning Mandates
For further details of some of these modules, please see later in this summary.
Despite the comprehensive technology services the company provides, ACSL is not positioning itself as a technology company. Therefore NelsonHall estimates that less than 10% of clients are only provided with a LMS / LCMS hosting solution, contributing a very small proportion of overall revenues within ACSL.
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ACSL offers blended service delivery covering:
Instructor led courses
Virtual courses & presentations
Web-based courses
CD ROM courses
Performance support tools/ job aids
Assessment of learning effectiveness
Pre and Post testing
Multiple levels of measurement
Train-the-trainer support
NelsonHall estimates that c. 60% of the company’s content delivery is eLearning based, as at October 2008, with over 80% of courses provided within a blended environment. The company expects this mix to remain the same in the short-to-medium term.
ACSL has c. 480 personnel providing learning services to clients. The principal locations for learning delivery are:
United States; Cleveland, Denver, Dallas, and Tempe
Europe; Barcelona, London
Mexico; Monterey
India; Pune
Jamaica; Montego Bay.
The company has:
250 personnel involved in strategy and content development
80 personnel involved in technology
130 personnel involved in learning administration
Nelson Hall estimates that approximately 25% of the workforce is located outside the United States.
The company is exploring further utilization of nearshore and offshore resources. ACSL expects to leverage the existing ACS global sourcing infrastructure. Processes for potential offshore delivery include level 1 learner care, and a wider range of services within content development.
ACS has its own proprietary LMS technology, based on SumTotal but highly developed, from the Intellinex acquisition.
Technology assets within the company include:
LMS
LCMS
Learning Administration System; a proprietary tool designed to assist ACS keep track of all learning administration tasks, and link them back into the LMS. Tracking covers:
Classrooms
Printing
Learners
Logistics (which can be managed offline)
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Information Manager; stores information and knowledge as “learning objects” to link into the LCMS to enable users to browse and search learning resources
Collaboration Center; an online collaboration tool for learners, experts, mentors, coaches and peers
Performance Management; solution designed to assist organizations in determining skills within an organization, and the skills needs for that organization in reaching business goals. The solution tracks skills at an employee level, and compares skills to an organizations “skills inventory” to determine skill gaps within a company
Entitlement/E-Commerce; tool to enable companies to extend the LCMS capabilities to channel partners, customers, resellers, vendors or employees. These groups can then be provided with specific, targeted content
Reporting.
ACSL utilizes a number of partners for provision of off-the-shelf content including:
Micromash (Thomson)
Skillsoft.
The company is looking to extend its partnership network as it expands into further geographies, and requires content coverage within these locations, e.g. Mexico.
The company also has other partnerships to assist in providing a comprehensive LBPO offering including:
Analytics; KnowledgeAdvisors
Collaboration; Q2 Learning
Delivery and management of training materials globally; Gilmore Global
ILT Delivery organizations, Training Associates, for access to instructors as required around the world
Mobile Learning; Intuition
Tuition Management; CAEL
Simulations; Regis
Virtual Worlds (Protosphere, Forterra and Second Life); ACS is currently exploring the uses of virtual worlds within the training environment, but have not yet released any specific applications within this area. However, the company is expected to do so in Q4 2008.
Developments within ACSL offerings are expected to focus on:
Collaboration technology; ACSL has a partnership with Q2 Learning specifically designed to advance collaborative tools within their learning BPO relationships as clients demand. Expected focus is on improving the ability to track / capture peer-to-peer learning. ACSL perceives that the next generation of employees are using collaborative tools anyway to share knowledge, and that information needs to be managed more effectively. This is particularly important where there is the potential for social networking to occur outside secure company networks, in applications such as Facebook.
Industry specific services; particularly within content development in financial services, and pharmaceuticals. The company has already developed some domain specific content capabilities including within finance, and sales and marketing. The company expects to develop these further by industry, perhaps into financial services F&A, and pharmaceutical sales and marketing content, both of which are highly specialized for their industries
Mobile Learning (m-Learning); through one of it’s partnerships, ACSL is enabling the company to explore mobile learning. Possible applications include pre- and
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post-course work for managers and executives, reminders for learning events/plans, etc., as well as writing regulatory compliance training courses for use on mobile devices, so employees can get access to compliance training on the move.
ACSL targets organizations with 3,000+ learners, both among employees and the extended enterprise. Most client organization have 10,000+ learners.
Industries the company targets include:
Professional services
Financial services
Manufacturing
Technology / Electronics
Consumer products
Pharmaceuticals
Construction.
Historically, these are the industries the company has had most success in. Though, in addition, ACSL expects to target more strongly in the medium term the telecoms and insurance sector where the company perceives an increasing interest in learning BPO.
A partial list of ACSL’s current clients include:
Multi-process HRO BPO; ACSL is providing Learning BPO services in connection with broader HRO contracts for 8 ACS HRO clients.
Full Learning BPO; Ernst & Young, Hertz
Partial Learning BPO services, including managed learning technology and learning administration; Canon, Cisco, Oce, Turner, Kraft, University of Miami, Radio Shack
Custom project content based services; Bank of America, Navistar, Toyota Financial Services, Siemens, Johnson Controls
Further details on some of these relationships include:
Hertz; a 5-year learning BPO contract awarded in July 2008 covering curriculum redesign, curriculum management, content development, content delivery, learning administration, technology services and vendor management services. The contact covers c. 40,000 Hertz employees located within North America and Europe
GlaxoSmilthKline; awarded in June 2007 covering 140,000 employees including covering learner logistics (administration), vendor management, and learning contact center operations
American Express; covering 66,000 employees in 59 countries providing LMS, training administration, vendor management, Level 1 evaluations and reporting, product fulfillment, web-based learning, testing and administration, and learning activity reports
BP; 3-year learning BPO contract covering content, staffing, consulting and strategic sourcing
Delta; multi-process HRO contract awarded in February 2005 covering 60,000 employees providing LMS, training administration, vendor management, tuition reimbursement, content development (88hrs/yr),and ITL conversion (100hrs in the first year). ACSL claims that learning BPO contributed $40m in savings to the contract within its first year.
GM; multi-process HRO contract awarded in November 2003 covering 60,000 European employees providing LMS, learning administration, measurement,
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evaluation and reporting services. Results achieved included a 15% reduction in learning costs in the first year
Goodyear; multi-process HRO contract awarded in February 2004 covering 85,000 employees worldwide providing LMS, LCMS, training administration vendor management, event travel services, measurement, evaluation and reporting, and training consulting services. Results achieved following the deal include a 300% cost reduction associated with provision of online course libraries, and a 10% cost reduction associated within the implementation of the LMS
Navistar; 3-year learning services contract covering consulting, finance learning, and content development
Major Financial Services Company; 3-year learning BPO contract awarded in June 2008 covering strategic sourcing, tuition reimbursement, administration, and content development.
Other clients for learning services within the company, where further details on services being provided are confidential, include:
ACE
Citigroup
NetApp
Philips
Pfizer
Radioshack
Toyota
Zurich Financial Services
U.S. Government organization
European-based global pharmaceutical company
European-based global manufacturing company.
Pricing within ACSL varies depending on the services provided and includes:
Professional services, a fixed price
Technology services, a per user model
Content, utilizing a rate card depending on difference levels of activity
Multi-scope / multi-year arrangements; based on a fixed cost associated with implementation, and transformation fees. In some cases, there may also be a per transaction element to the pricing.
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C Convergys Employee Care
Convergys Human Resource Management (HRM) is a business segment within the customer management services and software organization, Convergys.
Convergys developed a multi-process HR outsourcing offering through management of contact center intensive HR processes. These services were originally branded “employee care services”. However, in Q2 2008, the company rebranded the services as Human Resources Management, to reflect the company’s wider service portfolio.
Convergys HRM emphasizes the company’s ability to maximize organization’s relationships with their employees and customers. Relationship management, as defined by Convergys is,
“The enterprise-wide practice of optimizing how an organization interacts with its customers and employees to drive more value from those relationships”
Through the company’s heritage, Convergys perceives that a key differentiator its capability to understand the synergies between the employee and the customer; keep the employees satisfied and customers are happy; resulting in bottom line improvement within an organization.
HRM perceives that learning often drives the relationship an organization has with its employees through:
Helping employees understand organization values
Giving access to continuous professional development so that employees can feel “valued” by employers
Instilling loyalty by developing longer term training plans and goals, which align to an individual’s career aspirations, as well as organizational goals.
In addition, Convergys HRM perceives that customer relationships are also driven by employees and their ability to manage interactions with those customers to yield the best value and the highest satisfaction ratings.
With those principles in mind, Convergys Relationship Management branding aims to:
Achieve better customer experiences
Achieve superior talent management, through:
Managing the global workforce in a holistic manner
Drawing on the corporate pool of skills & strengths as required
Focusing on HR activities on consultative activities, such as developing best practice processes, harmonizing workstreams across HR functions (integrated talent), leveraging infrastructure and technology for portfolio management and benchmarking, measuring, monitoring, and then improving HR processes.
Provide effective workforce environments
Manage operational costs and efficiencies.
The acquisition of DigitalThink in March 2004 established learning BPO capabilities within Convergys HRM.
At the time of the acquisition, DigitalThink services included:
Learning consulting services
Learning simulations
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Custom online course development
Technology platform from on-demand course delivery.
These technology and content development capabilities have now been integrated with HRM learning administration and employee contact center capabilities to enable a more comprehensive learning BPO offering within the company.
Learning BPO services are now offered through Convergys Learning Solutions (“CLS”). Convergys considers CLS integral to this value proposition, alongside talent management.
In FY2007, NelsonHall estimates overall HRM revenues were c. $255m, with approximately $90m of this attributed to Learning BPO.
All of these revenues are thought to be generated by U.S–headquartered companies.
CLS provides services in all four learning process areas. NelsonHall estimates that revenues from these services in FY 2007 were:
Delivery services– 25%
Content development – 25%
Technology services – 30%
Administration services – 20%.
Learning BPO service offerings from CLS include:
Learning alignment and governance services
Content development and sourcing
Learning delivery
Learning Administration and operations
Learning reporting and analytics
Agent Performance Learning
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Exhibit II-9 provides further details of the first five of these services. Exhibit II-9
Learning BPO Offering: Nov 2008
Source: CLS
Since this report was written 18 months ago, the company has designed a new service offering; Agent Performance Learning. This is a specific learning program targeted at development of contact center agents, with a view to reduce the time to competency for employees within a call center environment.
The service encompasses:
Curriculum transformation, involving the assessment of existing curricula both around new hires and continuing professional development. Principles within this offering include:
Focusing on tasks agents undertake, and not specific topics; providing training to the agents when they need it
Developing “real” floor skills, such as the ability to manage difficult customer situations
Engaging employees with real role-play scenarios
Utilization of performance assessments
Performance-based learning delivery, including:
More frequent training events, including implementation of virtual classroom technologies where appropriate. This is particularly important with the emergence of the home-based agent. Virtual classrooms can be utilized to cost-effectively train these employees
Training aligned to triggers; e.g. software bug detected, all CSAs required to take this training associated with this once its identified
Capturing and deploying best practices
Point of need and time of need training focus
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Learning operations services, including:
Learning system managed services
Learning system administration
Content maintenance / management
Communications support
Workshare; learning content development.
As at October 2008, CLS has a number of clients utilizing its learning analytics services, however, none of these clients are provided with level 4 services.
Analytics provision continues to be an area of focus for the company, but take-up has not been as fast as the company expected when the services initially launched, approximately 2 years ago. CLS is looking to integrate outcomes based SLAs to assist the transition to level 2/3 learning analytics, with level 4 analytics expected as the offering matures.
Key statistics within the company’s Learning BPO business include:
330,000 learners supported
5.7m enrolments
7m course hours delivered
2,000 custom course hours developed
Claim to typically reduce costs by 30% within engagements.
CLS utilizes a number of different technologies within its learning BPO arrangements including:
Assessment and survey design: QuestionMark
Just in time learning; Knowlagent (proprietary solution), which “pushes” learning to agents as its required
LMS; SAP LS, SABA, Mzinga (Knowledge Planet), Plateau, and SumTotal. SAP LS is the CLS preferred platform, but for customers with Peoplesoft HRIS, the company will use one of the other suppliers
Asynchronous learning; a proprietary software platform from DigitalThink, Convergys L5, Knowlagent Star Trainer and Continuous Training and Communications for Learning Delivery within the call center
Synchronous learning; Centra (through SABA), Intrawise, Webex, Adobe Connect
Business intelligence; Cognos, Business Objects.
CLS’ has chosen SAP as its preferred LMS platform as the company perceives that the integration of data across the ERP platform enables more effective talent management for its clients.
The company has not yet explored the use of virtual worlds in the learning environment.
In addition, the company has partnerships with the following organizations:
Local Universities, for classroom delivery
SkillSoft, for off-the-shelf content, and Knowlagent for contact center off-the-shelf content. The company has numerous specialized suppliers per customer requirements.
Xerox, for materials fulfillment.
CLS has c. 900 employees involved in the delivery of learning BPO services:
Administration and technical services are provided from sites in the US (Jacksonville and Cincinnati) and India (Bangalore and Hyderabad)
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Additional global support capability can be deployed from Convergys HRM centers in Hungary, Spain, Canada, India, China, Malaysia, and Brazil
Content development and maintenance is a centralized business services function for CLS and occurs within centers in Hyderabad and Bangalore.
Instructional design, learning strategy, and learning consulting services is deployed from offices and remote locations within the US, Canada, India and EMEA
eLearning centers are based in San Francisco and Cincinatti.
CLS provides learning administration, learning content and development, learning content and learning report from offshore locations in Hyderabad, and Bangalore. Convergys has been utilizing offshore locations for content development for c. 6 years.
Within learning BPO, CLS targets:
Customer care clients
HR BPO clients (for increase in scope)
Organizations with c. 500+ agents (learners) within the customer care environment.
In addition, the company is targeting organizations with specific strategies and characteristics:
Focusing on talent management and providing integrated learning services
Requirements to manage, audit, and control learning events due to the legal and regulatory environment in which they operate
Focusing on centralization of the learning function; looking to deploy a significant portion of their learning as a shared services.
These organizations typically fall into the following industries:
Financial Services; e.g. offering compliance and cross- sell / up-sell training
Government; e.g. regulatory understanding
Healthcare; e.g. regulatory, and sales readiness training on product launches
Retail; e.g. training to manage customer loyalty, and reduce churn, cross-sell, up-sell
Telecoms, e.g. complex regulatory environment
Manufacturing
Energy.
In addition, the company expects to expand in the high technology industry in the future.
Current clients within the learning business include:
Financial Services; Bank of America, Boston Scientific, CDW, Deutsche Bank, Fifth Third Bank, JPMorganChase, Marsh, Morgan Stanley
Healthcare; American College of Emergency Physicians, Cigna, GlaxoSmithKline, McKesson, Novartis, Pfizer
Manufacturing; Circuit City, DuPont, Mazda, Honda, Ingersoll Rand, Honeywell
High Technology; Cisco Systems, HP, Microsoft, and Solectron
Retail & Hospitality; Circuit City, Hyatt Hotels, Jo Ann Stores, SAKS, Toys R’ Us.
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Exhibit II-10 provides further details of some of these contracts.
Exhibit II-10 Example LBPO Clients: 2007-2008
Client Name No. of Employees
Alignment & Gov
Content Delivery Admin & Ops
Business Services Co.
15,000 √ √ √ √
Electronics Retailer
40,000 √ √ √
Basic Materials Manufacturer
60,000 √ √ √
State Government
219,000 √
Manufacturer 58,000 √
Medical Devices Manufacturer
25,000 √ √ √ √
Software vendor
6,000 √ √ √ √
State Government
46,000 √ √ √
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D Fidelity Talent Management Services
In October 2004 Fidelity Employer Services Company (FESCO) reorganized to meet the demand for integrated HR and benefits administration services. The company created two business units:
Fidelity Human Resources Services (FHRS)
Fidelity Institutional Retirement Services
Fidelity HR Services offers a range of HR management, payroll, talent acquisition & management, benefits administration, and strategic consulting to large, mid and small companies. These services are provided to c. 21m employees.
As at December 31st, 2007, HR Services had c. 11,000 personnel (excluding those based in Europe and India).
Within HRO, FHRS generated c. $1,375m of revenues in FY2007 (Dec). Of this:
$1,175m is estimated to be sourced from benefits administration services
$220m is estimated to be generated through multi-process HRO.
This report focuses on the talent management and learning BPO services offered to organizations through the company’s multi-process HRO capabilities.
FHRS positions learning BPO within its talent management service offering which encompasses:
Recruiting and staffing
Compensation management
Learning and development
Performance management
Talent planning
Services offered within LBPO in the learning and development areas include:
LMS technology administration; LMS deployment, integration, content hosting, virtual learning
Course / curriculum management
Resource management; course bookings, etc.
Vendor rationalization
Venue management
Fidelity views LMS technology administration as the standard learning service offered to organizations. All the other processes are offered (to organizations as extended administration services.
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As at Nov 2008, FHRS provides technology administration services for one client (in the financial services sector). In June 2009, the company is expecting to extend its services to include expanded learning administration for this client.
FHRS provides:
Management of SABA LMS
Course title management, but not development
Support for the 2,000+ administrators of the application.
Following the expansion in 2009, FHRS will provide all extended administration services to the organization.
In the medium term, the company expects to go to market with a wider proposition in learning BPO. However, initially organizations are more comfortable with outsourcing administrative tasks rather than content development, which some companies, particularly within the financial services sector, find “too close to their hearts”. With this in mind, FHRS is likely to position itself as an administrative provider, possibly offering content services as clients become more comfortable with the LBPO model.
NelsonHall perceives that FHRS will leverage the c. 600 learning and development employees located within the Fidelity business to first penetrate the financial services sector in the U.S. with a wider LBPO proposition.
FHRS expects to be able to manage c. 90-100% of known centralized learning administration within an organization. Potentially, skill-sets such as executive education may be kept in-house as these are considered too intrinsic to an organization’s intellectual property. In addition, business units, for example an insurance business unit within a financial services company, may be given mandates to manage some training processes (within content development and delivery) specific to their business requirements.
Historically, FHRS has offered LBPO services to employees rather than the extended enterprise. This has been principally due to technology limitations; it is complex to house user authentication for learning environments outside the LMS.
However, by the end of 2009, FHRS is aiming to have the technology to allow end user sign on from any location. This will enable the company to expand its targeting to include extended enterprise clients. In the medium term, NelsonHall expects the company to be targeting 20% of revenues sourced from the EE.
Technology utilized within learning varies depending on requirements. But FHRS has worked with:
SABA
Centra, for virtual classrooms.
FHRS has c. 1,250 delivery personnel involved in HR outsourcing processes. Learning BPO specialists are embedded within this number, but NelsonHall estimates the company will have c. 15-20 people involved in the management of the company’s two contracts within the area by end 2009.
Learning services FTEs are located within Rayleigh. In addition, the company has limited offshore resources providing processing services for:
Back office support, e.g. reporting and analytics
Technology administration, e.g. patching, uploading batch content.
In the medium-to-long term, as the LBPO business develops, NelsonHall perceives that the company may evaluate the use of offshore resources for providing extended administration services, including tier one call center activity. FHRS has an established Indian presence both through its parent company, and its benefits administration outsourcing business.
FHRS is targeting organizations for LBPO services with:
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Organizations with 20,000+ employees; the company does have HRO clients with smaller numbers of employees (7,000 – 10,000) but tends to focus on this sweetspot more aggressively and is opportunistic below this threshold
Existing multi-process HRO and benefits administration clients. The company has:
Nine MPHRO clients
Thirty-Five health and welfare and total benefits outsourcing clients
Large base of single service benefits administration clients within the large, mid and small marketplace; a proportion of which may be interested in LBPO.
U.S. headquartered, but multi-national organizations, with business particularly within Europe (concentrations of employees in Ireland, France, U.K., Spain, etc.)
No specific industry focus, though the company has strengths from its multi-process outsourcing and benefits administration outsourcing customer base within:
Consumer Goods
Financial Services (and the influence of FHRS’ parent organization)
Manufacturing
Pharmaceuticals
Publishing
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E General Physics Corporation
General Physics Corporation (GPC) is headquartered in Elkridge, Maryland and offers training, engineering and consulting services to organizations worldwide. The company is a subsidiary of GP Strategies.
GPC is organized into three business segments, following the acquisition of Sandy in January 2007:
Process, Energy and Government; offering engineering consulting, design, and evaluation services involving the management of facilities, the environment, processes and systems, staff augmentation, curriculum design and development, training and technical services to federal and state governmental agencies, large government contractors, petroleum and chemical refining companies, and electric power utilities
Manufacturing and Business Process Outsourcing; offering training, curriculum design and development, staff augmentation, eLearning services, system hosting, integration, help-desk support, learning BPO, and consulting and technical services to large companies
Sandy Training and Marketing; providing custom product sales training around new product features and designs and customer relationship management strategy consulting.
This report focuses on the learning BPO services provided by GPC.
GPC’s learning BPO business was established in 1986, following the signature of a training administration contract with General Motors. Since 2000, the company has offered significant learning technology services to organizations, including LMS / LCMS hosting services and administration of LMS already implemented within the company’s clients.
In FY 2007 (year ended Dec 31st), overall revenues for the company were $261m. NelsonHall estimates that the company had LBPO revenues of c. $208m, with all of these revenues generated from companies headquartered in the United States. However, the company expects this to change as a key strategy of the organization is to develop business in Europe, in particular within the U.K.
In addition, the company has c. $120m revenues (FY2007) brokered in learning services on behalf of its clients.
Within LBPO, NelsonHall expects organic
Companies that help to increase GPC’s global delivery footprint. In particular, NelsonHall expects the company to strongly consider acquisitions of companies with a presence in Europe, and ideally Asia Pacific as well. Both territories are strong growth targets for the organization in the short-to-medium term
growth rates in FY 2008 within GPC to be c. 10%.
GPC has historically been acquisitive, and NelsonHall expects this to continue. Potential targets for acquisitions include:
Companies that help to improve GPC’s capabilities within selected skill-sets, for example specific eLearning capabilities or training delivery services.
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Exhibit II-11 provides details of GPC’s acquisitions relevant to the LBPO business since 2006. Exhibit II-11
GPC Acquisitions: since Jan 2006
Date Deal Value Company Acquired Comment
Oct 2007 $1.8m cash $3.3m in potential additional payments
Via training, LLC U.S. eLearning sales training company with particularly strong business in the Retail sector
June 2007 $3.3m cash $1.8m additional depended on Earnings
Smallpiece Enterprises Ltd
U.K. technical and management training service provider
Jan 2007 $.4.4m cash $8.0m additional over 2yrs depending on revenue targets
Sandy Corporation U.S. custom sales training and print-based and electronic publications, mainly in automotive industry
Feb 2006 $1.3m Peters Management Consultancy
Financial services / banking consultancy specialist
Source: GP Corporation
NelsonHall estimates that revenues generated across the four key processes within learning BPO are split as follows:
Administration / Technology – 70%
Content development – 20%
Delivery – 10%.
The company expects its content and delivery revenues to increase over the next 2-3 years, particularly as clients of GPC’s services tend to utilize the company for a wider scope of services, as their relationships develop. Typically organizations start with administration, then move to utilizing the company’s technology services, and finally content and delivery services.
NelsonHall estimates, the company will have c. 40% of revenues generated from delivery and content services by end 2009.
Learning BPO Services offered include:
Vision and Assessment
Learning Management System Administration
Learning Content Strategies
Learning Administration / Logistics Services.
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Exhibit II-12 provides further details of GPC’s learning BPO services. Exhibit II-12
General Physics Corporation LBPO Services: Nov 2008
Source: GPC
Though typically the company offers services across all these areas; some organizations opt to bundle specific services depending on requirements. Therefore LBPO service subsets that company offers include:
Standalone tuition reimbursement
LMS administration alongside supplier management.
For example of these types of contract, please review the client list located later in this profile.
Since the company acquired Via, GPC has been expanded its offerings set to include those appropriate for the retail sector. This includes:
Management of learning within a dispersed workforce, e.g. kiosk internet access for accessing content
Focusing on brand advocacy training. A customer’s first point of contact with a retail organization is the employee selling them goods. Therefore, it is critical for retailers to get employees “excited” about the organization and its products. To do this, learning priorities need to be focused on helping employees understand the company’s brand and its values; enabling employees to effectively demonstrate these to the customer.
GPC offers learning BPO services to employees and the extended enterprise. NelsonHall estimates that c. 80% of the company’s BPO services are focused on providing services to employees, with the remaining 20% of revenues generated primarily from the training of partners, particularly within the high technology industry.
NelsonHall expects the company’s revenues generated from the extended enterprise to at least double within the medium term; particularly as organizations look to train their customers to generate more direct revenues. For example, organizations are increasingly aware in this downturn that the individuals that directly affect their revenues, e.g. retail assistants selling their products, are not under their direct control.
LMS integration Data migration Hosting services
IT infrastructure assessment Change readiness analysis Business process mapping LMS selection
Learning Management System Administration
Process mapping Quality standards Financial & measurement systems E-Learning readiness assessment
Enterprise assessment Corporate goal alignment Strategic planning Learning enterprise design Corporate university structure
Vision and Assessment
Student Management Student records Certification management Personal development administration Quality records HR system interface LMS data entryRegistrar Services Course registration Catalogs Student accounts Call center operations Online registration State and federal funding record keeping
Analysis Front-end analysis Task analysis Competency mapping Establish learning objectivesDesign Delivery method selection; ILT, eLearning, tech-
based, satellite distance learning Design of the learning events
Components
Learning Event Planning and Logistics Instructor scheduling Facilities logistics and management Courseware fulfilment Marketing-including websites and catalogs Process documentation LMS data entry EvaluationVendor and Program Management Contracting and payments Vendor selection Performance measurement Cost management Communication and planning
Learning Administration / Logistics
Design cont. Evaluation existing off-the-shelf content Determine whether need to make or buy contentSelect and create content Aggregate eLearning content Develop training content (all media) Perform pilot conducts and revise instructional
materials Validate content from third party providers
Learning Content Strategies
Service
LMS integration Data migration Hosting services
IT infrastructure assessment Change readiness analysis Business process mapping LMS selection
Learning Management System Administration
Process mapping Quality standards Financial & measurement systems E-Learning readiness assessment
Enterprise assessment Corporate goal alignment Strategic planning Learning enterprise design Corporate university structure
Vision and Assessment
Student Management Student records Certification management Personal development administration Quality records HR system interface LMS data entryRegistrar Services Course registration Catalogs Student accounts Call center operations Online registration State and federal funding record keeping
Analysis Front-end analysis Task analysis Competency mapping Establish learning objectivesDesign Delivery method selection; ILT, eLearning, tech-
based, satellite distance learning Design of the learning events
Components
Learning Event Planning and Logistics Instructor scheduling Facilities logistics and management Courseware fulfilment Marketing-including websites and catalogs Process documentation LMS data entry EvaluationVendor and Program Management Contracting and payments Vendor selection Performance measurement Cost management Communication and planning
Learning Administration / Logistics
Design cont. Evaluation existing off-the-shelf content Determine whether need to make or buy contentSelect and create content Aggregate eLearning content Develop training content (all media) Perform pilot conducts and revise instructional
materials Validate content from third party providers
Learning Content Strategies
Service
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Company investment in training resellers in understanding products better, would be expected to have a positive impact on direct sales and product returns.
GPC’s courses are delivered within blended environments. In FY2006, NelsonHall estimated that c. 65% of courses were ILT-based, this has fallen to 55-60% in FY2007. NelsonHall expects this shift to continue, potentially falling to c. 40% of delivered courses in the next 2-3 years. This is due to the company’s increased migration of appropriate courses to eLearning, and potentially virtual classrooms, as travel costs and the cost of creating eLearning courses continues to fall. Overall, the company estimates that c. 95 – 100% of the company’s courses are delivered through blended environments.
Blended solutions, which the company claims to have been offering since 1982, include:
Self-study Workbooks With Audio Cassettes
ILT With Video
ILT With Computer Based Training (since 1990)
ILT With Web Based Training (since 1999); GPC estimates the company typically produces 300 hours of custom web-based training courses per year for its clients
Simulations.
GPC is technology agnostic, and works with the majority of the main LMS / LCMS software including:
EEDO
GeoLearning
KnowledgePlanet
OutStart
Plateau
SABA
SumTotal.
GPC either hosts the application for its clients, or will administer a system already implemented by the client. NelsonHall estimates that c. 75% of GPC’s clients own their LMS / LCMS, the remaining utilize GPC’s own technology infrastructure.
GPC does have technology solutions within the business, however, these are not sold as standalone software solutions, but are embedded within GPC’s LBPO services. Proprietary technology includes:
Content distribution; to push content through to dispersed workforces, e.g. within the Retail sector
LMS, based on Oracle, but customized for GPC’s requirements; utilized if appropriate
Administration solution for management of back-office administrative processes
Though the company is technology agnostic, GPC has observed significant development within the technology arena in the last 12 months. These include:
Integration of performance management solutions with LMS to align technology to organization’s talent management programs
Integration of informal learning into organization’s learning environments. For example:
Wikis created, initially to be populated by SMEs, but then for entire corporates, or community groups. These are developed into managed knowledge repositories. Development of these collaborate knowledge bases
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can be critical in capturing knowledge before individual specialists within an organization retire
Discussion forums created around specific topic areas. These discussions can then be mined for pertinent information which GPC can release into the learning environment as FAQs on that topic.
In addition to utilizing licensed LMS / LCMS, GPC has a proprietary web-based training content development methodology, Ready2Role, which also includes the Ready2Role Content Development System, an open architecture database.
Key functionality of Ready2Role includes:
View and print project management reports
Upload media files
Preview content and interactions
Publish courseware
Structure courses
Develop and import narration scripts
Establish look, feel and elements within all pages.
As is typical within LBPO, GPC utilizes training partners in delivery of its services. In addition, GPC has a number of partnerships with smaller offshore content development providers to access specialized capabilities as required. The company has worked with c. 1,000 learning vendors in its learning services relationships to date (Nov 2008).
As at Nov 2008, GPC has c. 1,600 employees worldwide involved within learning services.
NelsonHall expects significant growth within GPC’s Asia Pacific operations, principally within India; and Singapore. These locations will support both offshore relationships, and clients from the Asia Pacific region. As at Nov 2008, the company is expecting to have c. 50 FTEs based in India by the end of FY2008.
GPC is currently delivering some technology and administrative processes from offshore locations. Processes managed from India include:
Course set-up in LMS
LMS administration, such as password resets
Tuition reimbursement claim processing.
NelsonHall does expect the company to continue to expand its use of offshore resources, potentially including adding further locations for first line contact center enquiry support, e.g. Philippines, where U.S. accents are more commonplace.
GPC is targeting organizations:
Located within:
North America
Europe (in particular the U.K., and Switzerland)
Asia Pacific
With 10, 000+ employees.
GPC is targeting across industry sectors. However, the company has seen greatest interest in the last 12 months from:
Energy / Utilities; these industries are struggling to attract new talent into learning functions, as graduates tend to want to enter more “glamorous” sectors, such as financial services and high technology. Organizations look to an outsourcer to provide skills they cannot find. In addition, the knowledge within organizations is
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in danger of being lost, as the workforce within this sector tends to be older, and therefore nearer to retirement. Organizations are looking to outsourcers to capture tacit knowledge within an organization for the next generation of workers
Financial Services; sector is struggling in the current hard economic client. In the past, financial services sector companies, stopped offering training. Now, organizations realize that this isn’t the way to manage effectively within an economic downturn, as a less well-trained workforce results affects the bottom line. Therefore, instead of cutting training out completely, organizations within the sector are looking to control learning costs better, aiming to insure spend is focused on what is required within the business to succeed in difficult times
Healthcare; as healthcare costs increase, organizations are looking to control and manage learning spend more efficiently
Retail; due to the company’s purchase, in October 2007, of Via Training; a company focused on the provision of eLearning capabilities within the Retail sector. Companies within the Retail sector experience high turnover as it is not a “career” industry; outsourcing can reduce learning function turnover. In addition, retail organizations are highly dispersed, so difficult to engage in training. Outsourcers are challenged to make learning more accessible, and appropriate for the retail environment (see offerings section)
Learning BPO clients include:
AIT
Cigna; awarded in December 2007 and covering learning technology (SumTotal), administration, vendor management, performance management and learning delivery and content design and development. GPC estimates that the company is managing 100% of Cigna’s known learning administration. Approximately, 100 FTEs were transferred from Cigna to GPC under the terms of the contract
Cisco
CN Rail
Daimlerchyrsler Corporation
Ford Motor Company
General Motors Corporation
IBM
Motorola: announced in November 2005 providing vendor management and content development to the company
Perot Systems
Texas Instruments
United Technologies
U.S. Army
Workforce Development, State of Ohio.
Pricing with GPC varies including:
Per participant
Fixed price (particularly within content and delivery)
Variable pricing, where companies are charged a fixed price each time a course is taken by an employee
Per transaction, e.g. 1,000 entered for a course the organization is charged “X”, and 2,000 the organization is charged “Y”.
Exhibit II-13 overleaf provides further details of some of the compay’s LBPO clients.
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Exhibit II-13 General Physics Corporation LBPO Services: May 2007
Client Industry Learners Geographies Languages Initial contract start (current duration)
Services (all delivery services include element of admin)
High technology 15,000 U.S., Eur, AP Eng, Jap, Mandarin
2003 (3) LMS Admin, Leaner Admin, Strategy, Delivery, Supplier Man
Manufacturing 1,000 U.S. Eng 2002 (3) Learner Admin, Delivery
Manufacturing 50,000 U.S. Eng 2006 (2) Tuition Reimbursement
High Technology 4,500 U.S. Eng 2006 (3) Tuition Reimbursement
Healthcare 26,000 U.S. Eur Eng 2007 (5) Tech Services, LMS Admin, Learner Admin, Content Development, Delivery, Supplier Management
High Technology 45,000 U.S. Eur, AP Eng, French 2003 (3) LMS Admin, Learner Admin, Content Development, Supplier Management,
Manufacturing 5,000 U.S. Eng 2006 (3) Tuition Reimbursement
Manufacturing 26,000 Global Eng 2004 (3) LMS Admin, Content Development, Course Delivery
Manufacturing 11,000 U.S., Canada Eng 2007 (1) Delivery
Life Sciences 44,000 U.S., U.K. Eng 2000 (4) Tech Services, LMS Admin, Learner Admin, LCMS Admin, Content Development
Manufacturing 9,000 U.S. Eng 1999 (3) Content Development, Delivery, Tuition Reimbursement
Manufacturing 284,000 U.S. Eng 1984 Delivery
Professional Services 9,000 U.S. Eng 2007 (3) Tuition Reimbursement
Life Sciences 60,000 U.S. Eng 2006 (3) LMS Admin, Learner Admin,
High Technology 3,500 U.S., Eur, AP Eng 2003 (3) LMS Admin, Learner Admin, Content Development, Supplier Management
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Client Industry Learners Geographies Languages Initial contract start (current duration)
Services (all delivery services include element of admin)
Telecoms 52,000 U.S. Eng 2005 (3) Tuition Reimbursement
Manufacturing 7,300 U.S., Canada Eng 2006 (3) Leaner Admin, Content Development, Supplier Management
High Technology 4,500 U.S. Eng 2006 (3) LMS Admin, Learner Admin, Supplier Management
Government 35,000 U.S. Eng 2000 (3) Tuition Reimbursement
High Technology 19,900 U.S., Eur Eng, French 2002 (3) Tech Services, LMS Admin, Learner Admin, , Strategy, Content Development, Supplier Management
Manufacturing 37,000 U.S., Eur Eng 2005 (3) LMS Admin, Learner Admin
Retail 7,600 U.S. Eng 2007 (1) Tuition Reimbursement
Financial Services 2,500 U.S., Eur Eng 2002 (3) LMS Admin, Leaner Admin
Government 35,000 U.S. Eng 2000 (3) Tuition Reimbursement
Manufacturing 17,000 U.S. Eng 2007 (1) Tuition Reimbursement
Manufacturing 220,000 Global Eng 2000 (3) LMS Admin, Learner Admin
High Technology 10,000 U.S. Eng 2007 (1) Tuition Reimbursement
Government 20,000 U.S. Eng 1990 (5) Tech Services, LMS Admin, Learner Admin, Strategy, Content Development, Delivery
High Technology 10,000 Global Eng, Mandarin
2005 (3) Tech Services, LMS Admin, Strategy, Content Development
Professional Services 9,000 U.S. Eng 2007 (3) Tech Services, LMS Admin, Learner Admin, Content Development, Delivery, Supplier Management
High Technology 5,000 U.S. Eng 2005 (3) LMS Admin, Delivery, Supplier Management
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Client Industry Learners Geographies Languages Initial contract start (current duration)
Services (all delivery services include element of admin)
Professional Services 140,000 U.S. Eng 2008 (3) LMS Admin, Supplier Management
Manufacturing 27,000 U.S, Eur, AP Eng, Mandarin
2007 (3) LMS Admin,
Healthcare 41,00 U.S. Eng 2008 LMS Admin, Learner AdminSupplier Management
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F Genpact
Genpact, formerly known as GE Capital International Services (Gecis), was established in 1997 from some of the support functions at General Electric (GE).
In August 2007, Genpact completed its IPO and began trading on the New York Stock Exchange.
Current ownership for Genpact comprises:
General Atlantic and Oak Hill (via a 50/50jv GICo) 51.8%
GE 23%
Wachovia 6.7%
Public shareholders 17.1%
Employees 1.2%.
Since 2005 the focus has been on securing business from clients other than GE; this involved necessary expansion of management and business development operations in 2005 and of service delivery centers in 2005 and 2006.
As at August 2007, Genpact had 35 clients that are not GE businesses (this does include some GE spin offs).
Revenues for Genpact in FY2007 were $823m. Genpact offers both BPO and IT services to organizations. Revenues by business segment in FY2007 (December year end) where:
Business Process Services (majority of Genpact’s core BPO service offerings) - $621m
IT Services (includes Learning BPO services) - $201m.
For Learning services, NelsonHall estimates the company’s revenues are c. $11m. NelsonHall estimates that growth to FY08 will be c. 30%.
In FY07, revenue estimates for the four key learning service areas are:
Content development – 60%
Learning administration – 20%
Learning needs analysis – 10%
Other services – 10%.
Genpact Learning BPO revenues, as defined by NelsonHall, are estimated to be 30% of total learning services revenues within the company.
Learning services are offered via the company’s Media and Learning Solutions business within the company’s IT services portfolio. This is because the services are aligned to the company’s content design and development business unit; Content Solutions.
Genpact’s learning services are focused on addressing three key learning requirements. The learning requirements are focused on:
Strategic; offering assistance through learning consulting in determining the learning goals of an organization, to advise on the structure a learning organization should take to achieve those objectives
Tactical; offering assistance in making learning more effective for an organization, providing learners with a better learning experience, including management of suppliers, content design and development, and managing the mix of delivery
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channels to insure learners are given access to the most appropriate forms of delivery for that learning requirement
Transactional; offering training and technology administration services to organizations (see exhibit x for further details).
In order to address these three learning requirements, Genpact offers:
Learning needs assessment
Content design and development
Learning delivery
Learning evaluation and measurement.
Exhibit II-14 provides more details on the services provided within these offerings. Exhibit II-14
Learning BPO Offering: Nov 2008
Source: Genpact
Exhibit x provides further details of Genpact’s services within learning administration.
The company’s offerings are provided on a modular basis, with organizations typically outsourcing 1-2 processes to Genpact.
Genpact’s LBPO services are focused on provision for the employee marketplace. By revenue:
80% of services are provided for the enterprise
20% for the extended enterprise.
Genpact emphasize the company’s analytics capabilities within the LBPO offering; utilizing the Kirkpatrick evaluation model to help align business and training goals. The company states that all their LBPO clients are provided with their evaluation and measurement analytics services.
Measurement analytics used within the LBPO practice include:
Training Administration, Assessment and Certifications
Administering LMS, inc. setting up course and curriculum, learning paths, resolving customer queries, reporting and vendor management (see later)
Managing tests and evaluations, inc. creating and managing tests, managing response options, and importing and exporting tests
Training Delivery Delivery strategy across multiple media Planning for resources/train the trainer Planning for venues, logistics, third-party
vendors Execution
Training Delivery
Program Design Business process design, inc. defining
training processes and identifying partners/vendors
Curriculum design, inc. designing learning outcomes, entry/exit levels and learning modes
Systems design, inc. content and delivery architecture
Learning Strategy Business strategic analysis, inc.
establishing learning challenges against business goals
Learning needs analysis; identify existing performance gaps
Reporting out solution recommendations
Learning Needs Assessment
Performance measurement Assessing user performance before and
after training
Content Development Analysis and Design:
Development of re-useable content delivery architecture
Designing micro- and macro-level course strategies
Development of modular content structures
Development: Content authoring Media development Integration and testing
Components
Tracking post training productivity Determining ROI from training from vis-à-vis
set goals
Evaluation and Measurement
Contextualization Translation Localization Blended media strategy
Content Design and Development
Service
Training Administration, Assessment and Certifications
Administering LMS, inc. setting up course and curriculum, learning paths, resolving customer queries, reporting and vendor management (see later)
Managing tests and evaluations, inc. creating and managing tests, managing response options, and importing and exporting tests
Training Delivery Delivery strategy across multiple media Planning for resources/train the trainer Planning for venues, logistics, third-party
vendors Execution
Training Delivery
Program Design Business process design, inc. defining
training processes and identifying partners/vendors
Curriculum design, inc. designing learning outcomes, entry/exit levels and learning modes
Systems design, inc. content and delivery architecture
Learning Strategy Business strategic analysis, inc.
establishing learning challenges against business goals
Learning needs analysis; identify existing performance gaps
Reporting out solution recommendations
Learning Needs Assessment
Performance measurement Assessing user performance before and
after training
Content Development Analysis and Design:
Development of re-useable content delivery architecture
Designing micro- and macro-level course strategies
Development of modular content structures
Development: Content authoring Media development Integration and testing
Components
Tracking post training productivity Determining ROI from training from vis-à-vis
set goals
Evaluation and Measurement
Contextualization Translation Localization Blended media strategy
Content Design and Development
Service
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Content development, assessment and certification; engagement and project level communication plans, technical specification and test plans, escalation plans, schedule adherence, quality (both internal and customer defects)
Training delivery; trainee feedback by participants on the trainer, trainee feedback on logistics and administration, training timetable adherence, and training best practices scorecard
Learning administration; query handling turnaround time (TAT), defects identified through sample review.
Exhibit II-15 provides further details of Genpact’s learning administration services. Exhibit II-15
Genpact Learning Administration Services: Nov 2008
LBPO Sub-Process Service Components
LMS Administration Facilitating LMS implementation LMS set-up and upgrades UAT for LMS upgrades Course integration Course testing Technical support
Training Administration Curriculum and course set-up Event recording End learner helpdesk support Structure path learning plans Translation of online modules into other languages
Reporting Reposts on needs analysis, compliance, coverage, usage and attendance Usage tracking for reporting and compliance needs Publish custom reports for learners / business units Feedback / Survey analysis for trainers
Vendor Management and Logistics
Co-ordinate / order pre-course assignments and materials if required Co-ordinate with finance team for internal billing of training Logistical support, such as booking venues, food, gifts, prizes, etc. Payment of vendors for training support
Source: Genpact
The majority (85%) of Genpact’s courses are delivered through eLearning. NelsonHall estimates that approximately 5% are managed within blended learning environments. The company is still expecting this percentage to rise as more courses are converted from ILT to eLearning-based.
In addition, Genpact is expecting to provide more online-based courses for the mobile workforce through PDAs, and potentially mobile phones. “Just-in-time” training, such as job aids, and quick reference guides are thought to be particularly appropriate for this delivery mode.
Genpact’s value proposition to organizations in LBPO is focused on:
Enhancing speed and effectiveness in the design and development of content and training delivery. This aims to enable organizations to clearly show business benefits of learning, and improve the speed to which training is developed, delivered and utilized by employees. Methods for achieving include:
Centralized modular curriculum design across businesses
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Re-useable components within curriculum design to reduce time-to-market across business segments and geographies
Streamlining and centralizing back office administration learning activities, reducing repetition and error rates
Consolidating learning delivery content and design across geographies. Genpact’s approach includes:
Single point of accountability for content design and development
Reusability of learning across businesses
Localization of content and delivery for emerging markets
Optimizing use of learning delivery media across organization, aiming to insure that appropriate delivery methodology is used both for the required skill-sets and the audience
Consolidation of vendor management
Optimizing learning spend. Organizations cannot reduce costs associated with the training function if they cannot measure those costs, and the training effectiveness properly. In order to enable better visibility of learning costs, Genpact:
Offers metrics to measure ROI and post-training learning employee performance
Utilizes pre-defined learned processes with appropriate tollgates to track learning expenditure / investments.
Genpact estimates that typically learning spend is split:
Personnel; including developers, trainers, administrators, etc. – 33%
Outside content and materials – 26%
Occupancy infrastructure – 18%
Technology support – 1%
Other costs – 22%.
Standardizing processes; utilizing Six Sigma and Lean principles.
In future, the company is expecting to leverage the capabilities within Genpact’s procurement practice to offer a vendor management service within LBPO.
Genpact is technology agnostic. LMS platforms the company has worked within include:
SumTotal
Plateau
Oracle
SABA.
If organizations have not implemented an LMS, Genpact would expect to conduct a needs assessment to determine which LMS is appropriate for the organization’s learning strategy.
Genpact has c. 315 employees focused on learning services delivery. These FTEs are located within:
Gurgaon – 250
Hyderabad – 50
United States – 15 onsite at client locations to provide project management services.
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Approximately, 20 of these employees are involved within training administration services.
The company expects to leverage the Genpact footprint to expand its LBPO delivery network in the short-to-medium term. The company is exploring:
China; to offer Japanese and Korean language skills
Philippines; to offer voice services and further Asian language capabilities
Romania; to offer German, Spanish and Dutch language skills.
Genpact targets companies within learning BPO as the wider organization. Key industries within the company are therefore:
Financial services (largest revenue proportion)
Healthcare and pharmaceuticals
Business to consumer
Manufacturing
Telecommunications
Energy.
In addition, the company targets organizations with:
High attrition rates
High technology adoption.
Geographically, the company is targeting:
North America (80% of current revenues)
Europe (10%); including U.K., France and Romania
Asia Pacific (10%); including India
Genpact LBPO will focus on the markets it already has relationships, but it expects to expand into new markets in the short-to-medium term including:
Germany
China.
Initially, the company expects to develop content development relationships within these new geographies, but the offering will be an end-to-end LBPO service.
Genpact LBPO operates a number of pricing models including:
Time & materials basis within project work
Per FTE
Per learner hour
Within training administration, a combination of the above models depending on the scope of the relationship.
Contracts are typically between 1 – 2 years in duration initially.
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G GeoLearning
Note: GeoLearning is a technology administration provider within learning services, and does not fall into NelsonHall’s Learning BPO definition. This profile is provided for added information as some LBPO providers use GeoLearning technology
GeoLearning is a U.S.-based learning technology services company headquartered in Des Moines in Iowa.
The company offers the following learning services:
General consulting services, including learning organizational assessment
Hosting and implementation services for the company’s own LMS and LCMS GeoMaestro suite of solutions
Technology administration services, including the administration of LMS and LCMS, and the provision of a 24/7 helpdesk service for the company’s technology
Content development services, including development of online courses
Training delivery, including the delivery of classroom-based courses
Technology vendor management; including sourcing and integrating appropriate technology for an organization’s learning requirements. For example, if an organization requires performance management software to be integrated with the LMS, GeoLearning can recommend and leverage buying power to access the required applications.
NelsonHall estimates that FY2007 learning services revenues for GeoLearning are c. $50m. NelsonHall expects the company to experience growth in the region of 20-25% to FY2008 in both overall learning services, and technology administration.
Technology administrative services (as defined above) accounted for c. 25% of total revenues for GeoLearning in FY2007.
NelsonHall estimates that GeoLearning revenues by product line for FY2007 were:
Licensing, hosting and support – 78.7%
System set-up and training – 11.5%
Services and other – 9.8%
Typically, organizations would be provided with 3 to 4 of the 6 processes GeoLearning offers. All organizations utilize the company’s GeoMaestro technology.
The company does not expect the mix of business to alter significantly over the short-to-medium term, however content development services is an area where growth is likely to be strongest. GeoLearning perceives that as organizations work with the company to develop successful content over a period of time; more learning content is likely to be entrusted to the company.
Approximately 20% of the company’s current services are provided to organization’s extended enterprise to assist in driving revenue for that organization. For example, a large electronic consumer good manufacturer is rolling out online training in its personnel mobile devices to retail outlets in the U.S. to try and reduce the return rates for those devices.
In future, GeoLearning is targeting a growth in business from the extended enterprise segment. This is due to the downturn in the U.S. economy. Training of customers, which can drive revenue increases, is likely to be given a larger share of a training budget, than employee training which is perceived to have no direct revenue impact. NelsonHall expects that revenues from the extended enterprise could reach c. 40% within 2-3 years in the company.
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GeoLearning offers technology administration services, but as administration services are focused on the technology solution involved in managing learning rather than the learning function itself (Learning Technology Administration); NelsonHall does not include GeoLearning within the definition of Learning BPO.
The majority (c. 90%) of courses managed for organizations by GeoLearning is online-based. However, of the total population of courses within the LMS technology utilized by GeoLearning clients, only 30% is eLearning. GeoLearning does perceive that there is a shift towards eLearning, and blended learning environments. This is due to:
Lower cost of developing eLearning courses. Organizations can spend c. $50,000 on a 2 hour classroom course OR $50,000 on a single individual to write a number of eLearning courses
Ease of accessing software tools for changing basic materials, such as powerpoint presentations, into online courses and developing eLearning courses, e.g. Articulate and Raptivity
Increase in usage of online informal learning networks, such as those provided within GeoEngage. These informal learning pathways can now be tracked within an LMS to aid a company’s understanding of their use and effectiveness. For example, GeoEngage is utilized by a large IT company’s employees to share knowledge about its own solutions to assist the company in servicing its customers better.
GeoLearning provides various technology solutions for its clients within its learning suite:
GeoMaestro; the underlying learning management system designed to enable organizations to assess, measure and deliver learning
GeoLCMS; utilizing DominKnow to help to author content to GeoLearning clients
GeoAnalytics; powered by KnoweldgeAdvisor to enable companies to measure the effectiveness of training within their organization
GeoTalent; utilizing Success Factors to enable linkage between performance management and learning within an organization
GeoConnect; enabling collaboration through Webex capbilities
GeoEngage; through use of Q2Learning, enabling organizations to utilize a collaborative, community-based learning environment.
Development around GeoLearning’s technology is likely to focus on:
Release of a talent management module in the short-term to include ability to integrate learning with performance management, and competency management. Any new module is likely to include functionality such as:
Ability to perform skills gap assessments, and skill health checks
Ability to recommend training courses to address skill gaps.
“Just in time training”, where the technology enables easier management and creation of learning bytes, which pop up on desktops as and when organizations require them. For example, a pop-up to provide advice on how to handle difficult calls in a call centre environment following a customer service representative’s experience of this situation.
In addition to the technology partners, GeoLearning utilizes its learning suite. The company also provides content though a number of organizations, depending on the skills requirements of organizations. Partners include:
Bankers Training Consulting Company (now part of BAI); learning solution, including online learning for the financial services sector
CoreMedia Training Solutions; a safety training organization
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Corpedia Education; ethics and compliance training solutions
Drug Free Business Solutions; drug and alcohol training for the workplace, such as providing courses on the effects of alcohol and its misuse, details on drugs abuse and help in preventing problems and preparing for treatment
Element K; eLearning in a number of topics, such as technology, sales, general business, financial services, six sigma, writing skills and compliance
InfoSec University; information security
Intellexis; financial training and business learning solutions
Learn2.com; specialized in Microsoft office and Windows software training
Skillsoft (inc. Netg); wide range of content including business skills, compliance, desktop skills, and access to books24/7 solution providing digital access to technical and engineering references online
xebec; general business, including soft skills.
GeoLearning has c. 235 employees managing learning services, with c. 50 involved in technology administration services. Of these employees:
Approximately 30 are located within Iowa
Remaining c. 20 employees are located on client sites to directly assist in the management of delivery, content and technology administration. Typically, arrangements where content development is a significant proportion of services, onsite presence is more likely to be appropriate. This makes it easier to utilize client subject matter insights in the development of courses.
The company does not currently have administrative staff located offshore, and this is not expected to change in the short-to-medium term.
Geographically by revenue, Geolearning clients are headquartered within:
North America - 90%
Europe – 7%
Rest of the World – 3%.
GeoLearning is looking to expand internationally in the short-to-medium term. NelsonHall expects the company to partner, potentially with consulting organizations for technology recommendations, to achieve this. Expansion within Europe is likely to be focused on the U.K. and Germany, though the company is opportunistic.
Targeting for the company’s solutions is widespread and includes:
SMBs of less than 1,000 employees; usually offered services through GeoExpress a learning management system and e-learning delivery platform designed to meet the budget constraints within smaller organizations
Mid market organizations with 2,500 to 10,000 employees; also offered GeoExpress, as well as the wider solutions based for company at the higher end of the mid-market
Enterprise with over 10,000 employees; offered complete solution set as required.
GeoLearning does not target by industry, however the company’s business is strong within:
Healthcare; where the company expects further growth as organizations try to keep healthcare costs down
Financial services
Any organizations with requirements for training the extended enterprise
Business services
Manufacturing
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Retail
Public sector, both state and federal.
Exhibit II-16 provides examples of GeoLearning’s clients. Technology administration is provided for all of these organizations. Exhibit II-16
Example LBPO Clients: Nov 2008
Talent Management
General Business Service Training
EE Training Delivery
Compliance Training
F.B.I. Ace ACT AP
Hbc Adecco Altiris Kaiser Permanente
IntelSat Anixer Dell State of New Jersey, Office of the Attorney General
Medical Staffing Network
Cabela’s Palm PPG
Smurfit-Stone United Technologies
Pratt Whitney Canada
Swedish American
U.S. Dept of Interior
Realogy Wells Fargo
Utica National Insurance Group
Wellmark Blue Cross Blue Shield
Source: GeoLearning
GeoLearning’s retention rate for client in FY07 was 90%+, with the company’s renewal rate running at 104% for the same period. Average contract length was 2%.
The company is keen to insure that they are not reliant on any one client’s revenue stream; no single client accounted for more than 5% of company revenues in FY 2007. For example, the top two clients accounted for just under 8% of total company revenues.
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H Hewitt Associates
Hewitt has c. 23,000 employees across 33 countries and is one of the largest global providers of HR outsourcing and consulting services, with fiscal 2007 net revenues of $3.0Bn and a client list of 3,000+ organizations for consulting services, 300+ for benefits outsourcing, and 32 multi-service clients.
Hewitt generated c. 50% of its FY 2007 revenues from benefits outsourcing, c. 30% from consulting, and c. 20% from multi-process HR BPO.
Exhibit II-17 provides details of Hewitt’s revenue share by process for FY 2006 – 2007. Exhibit II-17
Revenue Share by Service Type: 2006 – 2007
HR Service Type FY07 Revenue Share (%) FY06 Revenue Share (%)
Benefits outsourcing 49.3 51.3
HR BPO 18.0 18.1
Consulting 31.6 29.5
Total 100 100 Source: Hewitt Associates
HR BPO Services offered by Hewitt are split into three tiers of service and include:
Core HR Administration and Technology Services, including workforce management, payroll administration, and benefits administration
Hewitt Talent Modules, including learning and development, tuition reimbursement, performance management, succession planning, compensation administration, total rewards, recruiting administration and candidate sourcing
Hewitt Expanded Services, including mobility services, leave management, supplier management and workforce analytics
Learning BPO services are therefore offered as part of Hewitt’s Talent Module within the company’s multi-process HR outsourcing (MPHRO) offer.
Previously, Hewitt was going to market within MPHRO to include 6-10 HR services, often across the three tiers of service. For example, workforce administration, benefits administration, recruiting, learning & development, talent management and rewards administration.
As at Nov 2008, the company is marketing its offerings within bundles of two to three services. This is because the company perceives that:
Organizations are less willing to take the risk of outsourcing the majority of their HR to one supplier
Outsourcing too many processes means that the HR transformation period of c. 18 – 24 months was impractical
Standardization of 6 – 10 processes meant the change management program required was potentially disruptive
Retained HR organizations within clients were not able to concentrate on becoming a more strategic part of the business as they had to handle so much “noise” from outsourcing contracts.
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Due to the need for longer transformation within the larger service bundling Hewitt strategy, LBPO discussion has tended to begin c. 2 years after an original contract signature. Learning BPO services were rolled out after other processes have been “bedded down.” In future, Hewitt perceives that Learning BPO may now be part of the first phase of outsourcing for organizations adopting Hewitt’s new go-to-market offerings.
Services offered within Learning BPO include:
Learning administration:
Apply, maintain and control the integrity of learning activity structures
Maintain catalog; complete session details and publish in course catalog
Set-up and manage learning courses, class and sessions to established activity standards
Manage rosters
Manage resources (e.g. external instructors, and pre-work)
eLearning support, e.g. support custom and third party course upload and interoperability of the LMS
Learner service center support; in English during standard business hours in North America
Learning technology services; operation and maintenance of the LMS utilizing Hewitt standards (hosted in Lincolnshire, U.S.), integrated learning technologies and activity content links
Hewitt does not offer learning BPO outside the company’s MPHRO offerings. However, the company continues to evaluate whether learning BPO could be offered as a standalone service to organizations. For example, NelsonHall perceives it would be feasible for the company to offer administrative and technology services in learning as an extension of the company’s learning strategy consulting offerings.
However, standalone learning services are not expected to be offered in the short-to-medium term as Hewitt’s overall strategy is to focus on its core competencies.
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Exhibit II-18 provides a detailed breakdown of client vs provider responsibilities within Hewitt’s LBPO offer. Exhibit II-18
Learning BPO Service Responsibilities
Client Learning Team Activities (HR Dept)
Hewitt Learning Admin Team Activities
(Outsourcer)
Client Learner Activities (Employees)
(1) Complete “request class/session” form
(2) Complete class / session details and publish in LMS catalog
(3) View all options of learning types, course details and available classes
(4) Enroll online and receive e-mail confirmation
(5) Monitor enrolment status, cancellations, and priority candidates (LMS). Automate delivery of course pre-requisites, and pre-work
(6) Receive all course details and complete pre-work
(7) Retrieve and print sign-in sheet from LMS
(8) Attend class
(9) Send completed sign-in sheet
(10) Update attendance in LMS
(11) Send evaluations to learners, automated in LMS
(12) Complete evaluation
(13) Access certificate of completion for class via LMS
Source: Hewitt Associates
Hewitt’s offers a standardized (harmonized) solution to organizations, as well as a configurable (non-harmonized) solution in learning BPO.
The configurable options are available to enable organizations to choose learning BPO service solutions based on specific business / learning needs.
For organizations choosing more configurable solutions, there is naturally a price impact on the overall learning BPO service provided by Hewitt
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Exhibit II-19 provides further examples of some of the choices clients are able to make within Hewitt’s learning BPO service portfolio. Exhibit II-19
Learning BPO Service Responsibilities
Process Type Standard Solution Configurable Options
Policies and Practices Standardized Hewitt LMS Custom LMS implementation and hosting
Standard scope of services across organization
Service delivery requirements that vary across businesses
Agreement with client of service delivery levels
Decentralized L&D organizational structure and unique governance model
Operating Model Hybrid support; onshore / offshore model
All onshore support
eLearning support: support custom and third party courseware upload and interoperability with LMS
Testing content for compliance with AICC / SCORM standards
Content hosting at preferred suppliers (Skillsoft)
Self-service reports Custom reports
Technology and Data Host Solution Hosting at SumTotal or alternative location:
- Implement LCMS
- Interface with Virtual Classroom platforms
Convert 3 years or 2.7m records of legacy training data for active employees from single source system
Convert additional years of legacy training data and/or more than one source system
Standard reporting solution Choice of SumTotal reporting tool or data feeds to extract reporting data for use with client reporting solution
Source: Hewitt Associates
Hewitt does not declare revenues by individual process area. However, NelsonHall estimates that c. $20m of Hewitt’s MPHRO revenues are generated through LBPO activities.
Delivery channels for the courses administered by Hewitt vary by client. The company estimates that c. 60% is still delivered through classroom based courses. More simple blended learning environments (e.g. pre-work through online, etc) is becoming the norm with Hewitt’s client base, with c. 50% of courses operating in a blended environment. Within some skill-sets, e.g. leadership, almost all of the courses offered are done so in a blended fashion.
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Hewitt is able to work with a variety of technology services for organizations including:
Docent (for document management)
Knowledge Planet
Oracle Peoplesoft
SuccessFactors; the company’s partner for Succession Planning solutions
SumTotal LMS; preferred partner solution which the bulk of clients utilize (see Exhibit x).
Hewitt has learning BPO employees located within:
Canada: Toronto
Europe: Glasgow and Krakow
India: Gurgaon and Mumbai
United States: Woodlands.
In Q2 2008, Hewitt finished migrating learning call center support voice services to the company’s center in Gurgaon for one learning BPO client. NelsonHall expects the company to monitor the activity within India for this client and then to determine whether migration of learning voice services is strategic to Hewitt’s learning BPO offering.
The company cannot provide the number of shared service employees (employee service agents) that are focused on learning BPO as these services are provided along with other HR processes.
As within MPHRO, Hewitt is targeting organization with c. 15,000+ employees for LBPO.
By geography, the company is predominantly focused on North America, though the company as a whole is increasingly targeting European business. Geographic split for FY07 in learning was:
United States – 95%
Other – 5%, including Canada, Europe and Latin America.
The company does not typically target by industry, but is experiencing a high level of interest in Learning BPO from the financial services sector. The company perceives that this is driven by this industry’s need to reduce costs due to current challenges within the FS business environment.
Companies that are likely to be the most resistant to outsourcing learning are those:
Without strong learning leadership
With a decentralized learning structure
With the attitude that outsourcing will solve all the issues within their learning structure without examining just what they want to gain from the outsourcing relationship as a strategic tool for the business and not a short-term fix for problems in the learning environment.
As a result, Hewitt perceives that companies with shared services for HR and learning already in place are healthy targets for MPHRO and learning BPO. These organizations have strong learning leadership and an awareness of the costs associated with learning, and the potential benefits of outsourcing learning to a third party organization.
Hewitt has 13 clients for Learning Services, of which two are provided with Learning Administration services.
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Exhibit II-20 provides further details of these clients. Exhibit II-20
Learning Services Clients: Nov 2008
Client Name Scope Technology Platform
Enrolment volume
In-scope employees
Air Canada LA PeopleSoft 10,000 22,000
EFH (TXU) LA Aspen 28,000 7,600
Bank of Montreal
TA SumTotal LMS v6.5 70,000 35,000 U.S. & Canada
BP TA SumTotal LMS v6.5 35,000 25,000
Duke Energy TA SumTotal LMS v7.2 635,000 27,000
Hewitt Associates
TA SumTotal LMS v7.1 80,000 24,000 Global
International Paper
TA SumTotal LMS v6.5 145,000 70,000 Global
Marriott International
TA SumTotal LMS v6.5 500,000 155,000 Global
McKesson TA SumTotal LMS v7.2 40,000 28,000
PepsiCo TA SumTotal LMS v7.2 100,000 25,000 Global
Prudential TA Knowledge Planet 20,000 38,000
Sun Microsystems
TA SumTotal LMS v6.5 70,000 32,000 Global
Thomson TA SumTotal LMS v7.2 60,000 28,000 Global
Key: LA = Learning Administration, TA = Technology Administration. In-Scope employees are U.S. unless otherwise stated. Source: Hewitt Associates
Hewitt’s learning BPO services are typically operated using a transaction-based pricing model. Ideally, the company bases costs on the number of enrolments managed by the company, with a price differential agreed between enrolments for eLearning and instructor-led courses.
Average learning services contract lengths are between three to five years.
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I IBM Global Services
Although IGS was a late entrant in the BPO market it has since 2003 developed strong capabilities in its target areas.
IGS refers to Business Transformation Outsourcing (BTO) as well as BPO, reflecting its focus on IT-enablement of operations and on consultancy and systems integration work focused on business transformation.
In 2006, IBM renamed BTO as Managed Business Process Services (MBPS), comprising BTO, BPO and Business Process Services (BPS), also applications on demand: MBPS is categorized in this vendor summary as BPO.
BPO is now organized into the Integrated Operations division (was formerly part of Business Consulting Services) reflecting a focus on global service delivery, consistency and quality of operational delivery and re-usability of assets, among others.
IBM delivers learning BPO through the company’s HR BTO business; previously learning was a separate business within IBM (IBM Learning Services). IBM has integrated the learning business into the wider HR business process outsourcing organization; IBM Business Process Services for Human Resource and Learning (“IBM HRL”), in order to enable the company to offer a more holistic talent management offering. IBM HRL offers services within:
HR administration; covering payroll, benefits, contact center management, travel and relocation expenses, and expatriate services
Talent management (see below)
Employee productivity management; including total absence management (integrated with disability and workers’ compensation) and health/life management (healthcare and disease management).
IBM HRL emphasizes its learning and development services as part of its talent management offering. These services focus on the talent management cycle of an organization including:
Attracting and retaining
Motivating and developing
Connecting and enabling
Deploying and managing.
Offerings designed to enable these talent requirements within organizations include:
Performance management
Workforce management
Collaboration and portals; which is a significant additional since this report was produce in FY 2006, gaining greater emphasis in the company by separating as an individual offering within the talent management dynamic
Learning and development, incorporating learning BPO services.
NelsonHall estimates that revenues for learning BPO in FY 2007, excluding services provided to IBM and relating to IBM products, were c. $235m. This is a reduced estimate from the 2006 version of this report due to information received from IBM sources.
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Revenue estimates by region were:
North America; c. $200m
Europe; c. $35m, including United Kingdom; c. $29m.
NelsonHall estimates revenue growth to FY 2008 within learning BPO to be c. 15%.
LBPO services offered by IBM include:
Development of learning and performance strategy
Learning program design and development, incorporating content management
Learning delivery
Management of learning operations and administration
Performance management and succession planning
Learning application management.
Exhibit II-21 provides further details of IBM HRL’s learning BPO offerings. Exhibit II-21
Learning BPO Services: Nov 2008
Service ComponentsLearning and performance strategy
Strategic alignment Policies and procedures Enterprise governance
Programs / vendor rationalizationCurriculum and vendor rationalizationManage investment priorities
Program design and development
Requirements analysis Strategic alignment Instructional design Evaluation framework Blended solution designContent management Standard tools and methodsContent management
Project management Simulations, pod casts, blogs and wikis Asset management; video library Editing, media and course engineering SME developmentCourse testing/pilot Learning effectiveness reports
Delivery Web based testing and deliveryClassroom logistics Instructor co-ordination Venue management
Mentoring, coachingMaterials management and distributionComplex event co-ordination Vendor co-ordination
Learning operations and administration
Catalog managementCompliance monitoring Scheduling, enrolment, roster, and wait
list management Learner support and case management Transcript management
Analytics and reporting; service levels, activities and financials
Billing, invoicing and chargebacksCurriculum, career paths, and
competency updates Vendor managementCommunications and notifications
Application management
Implementation and configuration Problem resolutionHosting and integration
Technical supportMaintenance, support and updatesChange management
Source: IBM
In addition, the company offers succession planning and performance management services within learning and development including:
Multi-rater assessments
Standardization and calibration
Progress monitoring
Talent pools
Development plans
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Integration between learning, compensation and recruiting.
The company’s full learning services offering is targeted at organizations of c. 20,000+.
In 2008, the company has introduced Learning Select; an offering targeted at organizations looking for a one-to-many learning BPO service offering, which can provide them with fast access to content development, learning technology and learning administration services.
This service is targeted at:
Midmarket organizations; c. 5,000+, though IBM will engage with organizations with less employees if deemed appropriate
Specific business units within larger organizations; potentially with a view to expanding into other business units over time
Asia Pacific, and Europe (North America more opportunistically); including China, Japan, Australia, France and the U.K.
Key features of the offering include:
Access to pre-packed content
Ability to “plug-in” to LMS one-to-many solution based on SABA technology
Gain access to web 2.0 technologies through SABA and IBM capabilities without upfront technology investment, which IBM perceives can be harder within smaller organizations.
Exhibit II-22 provides details of the expected process allocation for these services between IBM and a client. Exhibit II-23
Expected Learning Process Allocation between IBM and a Prospective Client: Nov 2008
Learning Process Est. Retained Effort by Client (%)
Est. Proportion Outsourced to IBM (%)
Development of Strategy 90 10
Management of Business Operations
20 80
Development and Management of Learning Solutions (administration and operations)
20 80
Deployment of Learning Solutions
20 80
Management of Marketing and Sales (for extended enterprise services)
0 100
Management of Applications and Infrastructure
0 100
Integration with Performance and Succession Planning
20 80
Link with Recruitment and Compensation
20 80
Key; Light Grey = Extended services within talent management.
Source: IBM
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In 2008, IBM HRL is emphasizing the need to train the next generation of employees. The company perceives that learning styles will have to adjust to a workforce whose population of under 35s is growing (according to IBM, 81% of the business population under 35-year olds are gamers). Therefore, the company is developing learning in modes that the company perceives target this “next generation of learners”:
Mobile learning
Social networking and community building
Virtual worlds and gaming.
IBM utilizes various applications, both proprietary and licensed in delivery of its learning BPO offerings:
Dynamic Learning Experience (DLE); a proprietary portlet for IBM Lotus Workplace 2.0 that enables organizations to query, assemble, and organize learning content into custom courses
Edvisor; a proprietary solution that helps managers assess skills gaps, and then provides a prescriptive, customized action and development plan to “plug” those gaps
IBM Simpro; an proprietary application simulation program for producing learning interactions. This solution captures images and events such as mouse and keyboard interactions that a trainee uses in an application. Once the program has captured the actions and recorded screen activity, an HTML file is created that can be used for self-tutoring and refresher tutoring
Knowledge Advisors; utilized to enable the company to offer comprehensive learning analytics capabilities to organizations
SABA; utilized by IBM as a learning management system and to provide some analytics capabilities
SuccessFactors; for integration of learning with overall talent management
SumTotal; also utilized by IBM within the company’s engagement as a learning management tool.
Other than the software partnerships IBM utilizes above, the company also has c. 600 delivery partners worldwide to enable worldwide training delivery.
Content partners for the company include:
Coastal
Element K
Harcourt
HBS
Hccs
Intellexis
Ninth House Network
SkillSoft
Thomson/NetG
TRA
Zoologic.
As with all IBM’s BPO services, the company utilizes a four tier, hub & spoke delivery model to deliver its learning BPO services.
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Overall learning activities within each tier include:
Tier 0; ESS and MSS, enabling access to FAQs, policies, registration, cancellation, approval, and other related transactions
Tier 1 (Hortolandia and Manila); CSRs assist learners, managers, instructors via email and phone to solve common problems, utilizing standardized scripted responses in Knowledge Base tools
Tier 2 (Hortolandia and Manila); Learning specialists for operations and technology who solve more complex business and technical problems covering areas such as third party vendor mgt, scheduling and event management, Catalogue mgt., Reporting, Technical support, third party support
Tier 3 (Learning Centers of Excellence); MMC learning SMEs who define strategy, interpret policy, and architect solutions.
Exhibit II-24 provides examples of training administration tasks completed within each tier of activity. Exhibit II-24
Training Administration Activities by Tier: Nov 2008
Source: IBM
IBM’s learning solutions LBPO business has c. 750 employees globally, serving c. 65 countries.
Employees
Self-ServiceTier 0
Generalists
Tier 1 Tier 2
COE/BBHR
Tier 3
MSSView policies and
proceduresEnroll self and/or team in
course Approve training requestsSearch catalogueAdd development activities
to employee/team profileCheck employee progress
against goalsAlign team PDP with
organizational objectives
ESSView policies and
proceduresSearch catalogueCourse registration, waitlist,
requests - actions and statusView registration approval
statusAlign learning activities with
PDPEvaluate training
effectiveness Launch and complete in
web=based training programs Track PDP progress and
completions
COEDevelop learning strategies
strategies with HR CorporateEstablish and approve
annual training plans and costsReview and approve
content design and development initiativesDefine survey criteria Define communication
policy and toolsMonitor fixed and variable
training activitiesApprove vendors
BBHR
Define business specific annual training plan and fundingDefine business unit
learning strategy and policiesApprove business unit
content design &developmentAssign SME’s to support
content development activities
Generalist SSC Answer individual general
inquiries with scripted messagesDistribute training
communications and reportsAdminister enrolments,
cancellations and waitlistsProvide training status and
general reportingMonitor and update
communications and tier 1 escalationsCommunicate catalogue
and new course informationProvide direction on course
selection, prerequisites, certification, etc.
Specialist SSCAnswer complex inquiriesManage curricula and
course catalogueDevelop communication
packagesManage course set up,
logistics and materials managementConfirm instructors and
third party suppliers for deliverySpecial reporting and
analyticsCOE:Consulting &project
management for all course design and developmentScheduling coordinationPMO and business
operations
Specialists
Third partyProvide Tier 2 technical supportManage and support system upgrades and patchesMeet and exceed cascaded service levelsManage projects in accordance with established change
management processes
Service Center Retained HR Org.
Employees
Self-ServiceTier 0
Generalists
Tier 1 Tier 2
COE/BBHR
Tier 3
MSSView policies and
proceduresEnroll self and/or team in
course Approve training requestsSearch catalogueAdd development activities
to employee/team profileCheck employee progress
against goalsAlign team PDP with
organizational objectives
ESSView policies and
proceduresSearch catalogueCourse registration, waitlist,
requests - actions and statusView registration approval
statusAlign learning activities with
PDPEvaluate training
effectiveness Launch and complete in
web=based training programs Track PDP progress and
completions
COEDevelop learning strategies
strategies with HR CorporateEstablish and approve
annual training plans and costsReview and approve
content design and development initiativesDefine survey criteria Define communication
policy and toolsMonitor fixed and variable
training activitiesApprove vendors
BBHR
Define business specific annual training plan and fundingDefine business unit
learning strategy and policiesApprove business unit
content design &developmentAssign SME’s to support
content development activities
Generalist SSC Answer individual general
inquiries with scripted messagesDistribute training
communications and reportsAdminister enrolments,
cancellations and waitlistsProvide training status and
general reportingMonitor and update
communications and tier 1 escalationsCommunicate catalogue
and new course informationProvide direction on course
selection, prerequisites, certification, etc.
Specialist SSCAnswer complex inquiriesManage curricula and
course catalogueDevelop communication
packagesManage course set up,
logistics and materials managementConfirm instructors and
third party suppliers for deliverySpecial reporting and
analyticsCOE:Consulting &project
management for all course design and developmentScheduling coordinationPMO and business
operations
Specialists
Third partyProvide Tier 2 technical supportManage and support system upgrades and patchesMeet and exceed cascaded service levelsManage projects in accordance with established change
management processes
Service Center Retained HR Org.
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Exhibit II-25 provides details of the locations for all IBM’s learning delivery centers globally. Exhibit II-25
IBM Learning Services Delivery Centers: Nov 2008
Location Center of
Excellence Regional Center
Global Hub
Content Develop’t Hosting
North America
Atlanta √ √ √
Boulder √
Fairfax √ √
San Jose √ √
Seattle √
Toronto √
South America
Brazil √ √
Europe
Bari √
Brussels √
Budapest √ √
London √
Madrid √
Paris √
Warwick √ √
Asia Pacific
Bangalore √ √ √
Manila √ √
Shanghai √
Oseania
Sydney √ Source: IBM
NelsonHall estimates that IBM Learning has less than 20% of its total learning employees located offshore.
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Exhibit II-26 provides examples of IBM learning solutions current clients. Exhibit II-26
Example Learning BPO Clients: Nov 2008
Client Industry (Sorted by length of contract) Service Scope
North American insurance Full learning BPO; this includes administration, content development, delivery and technology
American Airlines
Selective LBPO (not the same as the Learning Select offering launched in 2008); this includes administration, content development and delivery
Global telecoms Full
European automotive Select
American telecom Select
U.S. financial services Select
European automotive Full
Rhodia Full
Canadian financial services Select
European financial services Select
Sanyo Electric Co Select
European FSS Select
U.S Army (DLS) Select
U.S. Army (eArmyU) Full
U.S. Pharmaceutical Select
L.A. Government Select Source: IBM
Pricing for IBM Learning BPO is based on a fixed price depending on the number of learners associated with the contract.
The majority of IBM’s contracts within Learning BPO are at least 3 to 5 years, with the company seeing a significant move away from learning out-tasking to organizations wanting to sign longer-term outsourcing arrangements with the company. In future, IBM expects more contracts to reach 7 and 10 year terms.
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J Intrepid Learning Solutions
Intrepid Learning Solutions (ILS) was founded in 1999 and provides enterprise learning services to organizations based in North America. The company is headquartered in Seattle, Washington.
The company began as a research house within the eLearning marketplace, and developed its consulting, and then outsourcing practices following success within this arena.
Services, as at Nov 2008, include:
Learning research; provision of industry thought leadership and analysis within learning services, including studies providing information on benchmarking and best practices, and custom client research
Learning consulting services; provision of learning consulting services for corporations including learning strategy, solutions design process, vendor services, job analysis, curricula design, development of learning solutions, evaluation and measurement, benchmarking, and training program management.
Learning BPO; provision of learning outsourcing services, including learning administration.
This report focuses on services provided within the company’s Learning BPO offering.
As the company is a privately-owned organization, FY2007 revenues are not publicly available.
However, NelsonHall estimates:
Overall company revenues were c. $40m in FY2007
Approximately $17m of FY2007 revenues were generated through learning BPO services
Revenue growth within learning BPO will be c. 25% to FY2008. Intrepid claims to have experienced growth in the range of 27% per annum in this service area since 2006.
Approximately 99% of the company’s FY2007 revenues were generated from North American head-quartered organizations, the remaining was sourced from Switzerland.
The company offers services across all four learning process areas.
NelsonHall estimates that revenues by process in FY2007 were (as for FY 2006):
Content design and development – 40%
Delivery – 40%
Technology – 5%
Administration – 5%
Consulting – 10%.
Since this report was produced in 2006, the company has expanded its focus from targeting pure LBPO relationships, to targeting longer term project based services. The company found that there were not enough comprehensive deals within its target market being tendered for. ILS will continue to offer project-based services to insure that revenues continue to grow at c. 25% to FY 2008/09.
NelsonHall estimates revenues by industry for FY 2007 were:
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Manufacturing – 61% (2 clients)
High Technology – 28% (8 clients)
Banking, Financial Services, and Insurance – 4% (6 clients)
Business Services – 3% (3 clients)
Retail – 1% (4 clients)
Telecoms, Government, Healthcare - <1% (4 clients)
Other – 3% (3 clients).
The company offers learning through nine distinct offerings:
Enterprise Learning Performance Assessment (ELPA); to enable learning alignment with company strategic and business goals. This assessments incorporates both consulting and benchmarking tools and methodologies
Strategy; to enable organizations to determine “how the learning organization best aligns its people, processes, products, and technology platforms with the higher level goals and strategy of the business”
Analysis
Design and Development
Delivery
Technology
Learner Support
Administration and Technical Support
Measurement and Business Impact.
Exhibit II-27 provides further details of these learning BPO offerings. Exhibit II-27
ILS Learning BPO Offerings: Nov 2008
Source: Intrepid Learning Solutions
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Clients are typically provided with services across at least three of these process areas, with NelsonHall estimating that approximately 90-95% of the company’s client base being providing with three of more of these services.
The company estimates that c. 30% of the company’s revenues are generated through project-based services.
The company offers LBPO to extended enterprise organizations, with c. 30% of revenues generated from this user base.
The company offers learning across all delivery modes, estimating that c. 40% of total is delivered through online medium. The company expects this to rise to c. 60% in the next 3-4 years as organizations utilize more online learning modes, particularly virtual classrooms, to reduce the delivery cost of training.
Key delivery statistics for Intrepid within FY2007 include:
Total delivery events: 23,500
Total delivery hours: 152,000
Delivery without incident percentage: 99.48%.
In 2008, the company developed partnerships with OutStart and SumTotal to gain greater influence in the development of the learning management systems offered to its clients. However, the company supports all major learning management systems, and remains technology agnostic.
Intrepid utilizes the company’s own proprietary scheduling system, ISS, with its client base. This is not sold as a standalone solution and is only available to learning administration clients.
Intrepid partners with offshore content development organizations to enable the company to utilize offshore resource as and when required. Intrepid continues to expect to utilize partners for offshore resources, and is not anticipating locating its own employees offshore in the medium-to-long term.
As at Nov 2008, the company had c. 270 employees; a 35% increase from May 2007. Individual clients have dedicated account managers to oversee learning service requirement, but it is typically for other employees, within areas such as content design and development, technology services, administration and delivery, to provide services to 3-4 clients at any one time.
Through the company’s network of delivery partners, ILS has access to c. 10,000 registered instructors, though this number is increasing all the time as the company engages with other partners to add further skills to its network.
The majority of employees are located within the company’s headquarters in Seattle.
Employees by function include:
Program development – 40% of total staff typically at any one time
Learning BPO (as at Nov 2008) – 15 internal to Intrepid and 10 from an un-disclosed partner (NelsonHall speculate that this learning administration provider is one of the Indian-based vendors, potentially NIIT)
NelsonHall expects the company to expand delivery partnerships within Europe, in particularly the U.K.
ILS targets organizations with:
$500m+ revenues
5,000+ employees
Highly distributed workforces
Open to outsourcing, e.g. have outsourced other processes, e.g. IT
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Intrepid continues to approach each opportunity with detailed risk assessments to insure the company has understood motivation and requirements within each learning tender effectively before engagement.
By industry the company is focused on:
Financial services
High technology
Manufacturing
Professional services
Other industries with rapid product / lifecycles and high incidence of mergers & acquisitions.
ILS is experiencing greater interest from the financial services industry in learning BPO services, and expects targeting within this industry to increase as a result.
Interest from financial services is due to:
High level of compliance requirements within the industry
Pressure to reduce learning budgets within the industry due to economic pressures, but without causing retention issues and skills gaps
Focus on increasing revenues within organizations resulting in financial organizations training channel partners to improve sales of the client company’s own financial products and services
Interest is also increasing from the high technology sector as organizations seek to look at alternative ways to keep up with global training requirements of both employees and extended enterprise as new technology products are released.
By geography, the company has historically focused on North America, and is looking to expand in the medium term into Europe; in particular the U.K. and Switzerland, following its 2007/08 success in the country.
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Exhibit II-28 provides details of the company’s current learning BPO clients. Exhibit II-28
Example LBPO Clients: Nov 2008
Start year Client Example Services Results
2007 United LMS Implementation
Learning platforms governance and management
Curriculum design and development
N/A
2004 Microsoft Learning strategy and analysis
New hire orientation
Sales and marketing curriculum design, development, and delivery for U.S. and global audiences
Leadership and management training
N/A
2004 Autodesk Learning and analysis
Strategy curriculum design and development
Workflow solutions
Evaluation, measurement and reporting
Resellers undertaking tech training perform 25% over quota on average
2002 Boeing Learning strategy and analysis
Curriculum design, development and delivery globally
Leadership training
Training project management and logistics
Reduced learning costs by 30% across the company
Reduced cycle time
2000 ASTD Learning and technology strategy
Certified Professional in Learning & Performance (CPLP)
eLearning Courseware Certification (ECC)
Design and development (ILT and Web)
N/A
Source: Intrepid Learning Solutions
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Pricing within Intrepid is based on a number of models, depending on the services provided. Experience includes:
Hourly fee
Fixed fee
Alternate pricing models as the situation requires, including minimum spend.
Average contract lengths within LBPO are between 2 and 5 years.
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K KnowledgePool
KnowledgePool is based in the U.K., and is focused purely on providing learning BPO in the country. The company was founded in the 1960s as in the internal training department for ICL, later Fujitsu. The company became independent in 2002; and is owned by a private equity house, Root Capital.
NelsonHall estimate that learning BPO revenues in FY 2007 were c. $49m; all of which are generated through U.K. headquartered organizations.
Services offered by the company include:
Learning consultancy
Training administration
Catalog of learning interventions, for example self-paced, ILT and eLearning courses
Supplier management.
NelsonHall estimates that revenues by service in FY2007 were:
Learning consultancy – 20%, thought this is typically embedded within a wider administration contract
Learning administration and supplier management – 80%.
The majority of the company’s contracts (98%) are longer term learning BPO arrangements, with the remaining smaller project-based consultancy work.
Exhibit II-29 provides further details of these offerings. Exhibit II-29
LBPO Offerings: Nov 2008
Source: KnowledgePool
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In addition to these administrative services, the company can manage training associates for an organization, including:
Assessing 1,000+ database of training associates to choose associate with suitable skills for training needs, including development of initial and final short-lists of possible associates
Supplying standard terms and conditions for each associate
Managing evaluations for each associate - delivered course
Managing individual payments.
In the company’s early days, the organization perceived that it was gaining traction due to its ability to improve operating costs through better management of suppliers and administrative functions. In the last 12 months, organizations are also expecting KnowledgePool to demonstrate and improve the Return on Investment (RoI) of the learning function utilizing the company’s strategy consultancy, and curricula redesign capabilities. KnowledgePool suggests that this may be due to a maturing of the relationships that the company developed two to three years ago.
The company does not delivery courses itself, but administers those of the suppliers that it manages. Approximately 90 - 95% of administered courses are instructor-led, though the company acknowledges an increase in online learning within its client base. Over the next 12 months, the company expects the percentage of ILT courses of total administered to reduce to c. 85%. Sectors such as professional services, and the financial sector are showing a greater propensity to deliver courses utilizing eLearning, particularly in compliance areas.
Typically, the company aims to administer c. 95 - 100% of total administration required within its client base. However, this percentage is hard to achieve and is largely dependent on whether organizations are operating a centralized delivery model for learning. Achieving this percentage may potentially take 2-3 years after contract signature as learning functions are remodeled.
KnowledgePool maintains a supplier neutral stance to enable the company to work with a wide range of learning delivery organizations as required by clients. The company perceives the value proposition for this is:
Enabling impartial selection, benchmarking and quality management
Allowing consistent terms and conditions across a supplier base
Improving access to discounts (across their total supply base)
Offering consolidated invoicing.
Examples of some of the suppliers that KnowledgePool work with include:
eegos
Global Knowledge
Highlander
Parity
PTP
Q6
QA-IQ (now QA-Xpertise)
tsg.
KnowledgePool partners with Business Training partnership (BTP) to access this company’s Livebooker scheduling software for all arrangements. BTP has c. 5-6 employees; all focused on the development of the solution for the management of learning administration.
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Developments within technology at KnowledgePool are to focus on:
Exploration of next generation learning mLearning, Virtual Worlds, etc. However, the company perceives that clients are not really ready for this; when the “rubber hits the road” clients are really looking to LBPO providers to solve day to day learning issues, reduce costs and rationalize suppliers. KnowledgePool perceives their role as being able to introduce clients to this next generation, and organizations can take the technologies if they are ready for the investment
Improving evaluation capabilities, e.g. three month evaluations after courses have been taken to evaluate longer term impact of training
Highlighting in-house courses within search results in Livebooker. This could potentially reduce cost to serve for organizations as learners are more likely to choose them.
The company does not plan to add talent management software, such as compensation management or succession planning to its portfolio.
As at October 2007, the company had c. 90 employees, with c. 70 focused on the delivery of supplier management and learning administration. Approximately 80% of employees are based within the company’s head office in Bracknell. The remaining 20% are located on client sites.
The company has no immediate plans to develop delivery locations offshore. This is due to:
FTE numbers not making the proposal sufficiently cost effective; the company perceives it can improve operating costs with supplier rationalization and administrative process improvements without labor cost arbitrage
Employee Service requirements within learning being more “consultative”, with voice representatives needing to answer more wide-ranging questions focused around a particular learning requirement, than in some other HR process areas, such as payroll and benefits. For example:
A learner calls an employee service center to get help with presentation skills. The employee agent needs to ask many questions such as What level are you looking for? What courses do you have available? Where do you want to learn?
A departmental head calls the employee service center to find a course to be delivered to their entire department covering a particular soft skill area. Agents would need to answer questions on style of course, type of course, level of complexity, and cost effectiveness.
Targeting in LBPO for the company has historically focused on U.K.-headquartered organizations, and this is not expected to change in the short to medium term. However, within delivery, the company intends to expand its reach into Europe to include other countries such as:
Germany
France
Spain
Benelux
Netherlands.
KnowledgePool is unlikely to get local delivery employees, but expects to develop relevant partnerships to facilitate this expansion.
The company does not really target by industry, however, success has been achieved within:
Government
IT Services
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Financial Services
Telecoms
Transportation.
Current LBPO clients of the company include:
Abbey
British Airways
Fujitsu Services
Home Office
Lloyds TSB
Marks & Spencer
Merrill Lynch
Orange
Post Office
Siemens
Contracts within KnowledgePool are c. 3-4 years on average. Pricing is based on:
Overall management fees, based on a per person per day rate
Per transaction
Gainshare; where KnowledgePool shares the savings achieved on a contract. Approximately 50% of contracts have a gainshare element, with c. 50% of a total contract compensation attributed to this. The remaining is usually priced on a per transaction basis.
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L The Learning Factor
The Learning Factor is an Australian-headquartered provider of managed learning services to multi-national organizations. The company offers its services through branded “centers” of excellence:
Diagnostic and Design Center; the consulting capabilities within the company offering organizations the ability to determine what the current state of their learning function is and what direction it needs to take to add value to the business
Design and Development Center; the content design and development offering within the company
Delivery Center; the management of the delivery of content through the sourcing, recruitment, development, management and deployment of appropriate facilitators for an organization’s needs
Training Operations Center; the administration offering for the learning function
Master Vendor Center; the company’s vendor management offering which incorporates the management of existing and hiring of new vendors to offer learning to an organization, as well as enabling organizations to leverage the buying power and existing relationships that The Learning Factor already has within any specific learning domain
Knowledge Center; offering reporting and analytics around the learning function to increase and organization’s knowledge of how effective learning is, and how it is contributing to the business overall.
Offerings are provided to organizations utilizing a collaborative “network” approach. The Learning Factor partners with c. 600 providers in the training domain to enable the company to access the appropriate provider for any individual client requirement.
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Exhibit II-30 provides further details of the sub-processes within each of these offerings. Exhibit II-30
LBPO Offering: Nov 2008
Source: The Learning Factor
Approximately, 60% of The Learning Factor’s clients are provided with administration services through the training operations center. The company perceives that a typical route for its clients is that organizations are provided with delivery services, and then content, and finally administration services as they become more comfortable with The Learning Factor’s operational capabilities. As a result, The Learning Factor provides delivery services to almost all of its clients.
The company perceives that outsourcing learning can achieve cost savings within the range of 15 – 30% depending on the state of the existing learning function, e.g. higher cost savings if the service is non-centralized, with no clear standards.
NelsonHall estimates FY2007 revenues (FYE December) for the company were $4m (Australian Dollar), with an expected growth rate of c. 25% to FY2008. Revenues by operation center are estimated to be:
Delivery – 40%
Training operations – 30%
Content design and development – 20%
Diagnostic & audit – 5%
Master vendor – 5%.
Knowledge center activity is typically embedded within the other activities.
Estimated revenues by geography for FY2007 were:
Australia – 40%
United States – 40%
United Kingdom – 10%.
Training materials management Facilities management and
venue sourcing Scheduling and wait list
management
Enquiry management Course management; booking
courses, facilitators, pre-post course assessments
Session logistics
Training Operations Center
Supplier quality control; data collection on how learners rate providers Setting up new suppliers; vetting new suppliers, agreeing T&Cs and
signature of contracts Negotiating rates; leveraging buying power across clients Researching venues/courses/trainers; utilizing supplier network and
independent viewpoint
Master Vendor Center
Report provision for business units relating to program review
Tracking of learning and development activity
Training attendance and management reports
Capture and analysis of training evaluations and data
Evaluation form processing
Knowledge Center
Performance needs analysis Learning curricula design Alignment of learning to company culture and goals
Design and Development Center
Leadership and development Business operations and
management Individual performance Sales and customer services
Components
Ethics and compliance Technical training
Delivery Center- Specialization areas
Service
Training materials management Facilities management and
venue sourcing Scheduling and wait list
management
Enquiry management Course management; booking
courses, facilitators, pre-post course assessments
Session logistics
Training Operations Center
Supplier quality control; data collection on how learners rate providers Setting up new suppliers; vetting new suppliers, agreeing T&Cs and
signature of contracts Negotiating rates; leveraging buying power across clients Researching venues/courses/trainers; utilizing supplier network and
independent viewpoint
Master Vendor Center
Report provision for business units relating to program review
Tracking of learning and development activity
Training attendance and management reports
Capture and analysis of training evaluations and data
Evaluation form processing
Knowledge Center
Performance needs analysis Learning curricula design Alignment of learning to company culture and goals
Design and Development Center
Leadership and development Business operations and
management Individual performance Sales and customer services
Components
Ethics and compliance Technical training
Delivery Center- Specialization areas
Service
Learning BPO
LEARNING SERVICES VENDOR LANDSCAPE NelsonHall
2008 by NelsonHall. - 87 - November 2008
Estimated revenues by industry for FY2007 were:
Financial Services – 50%
Information Technology – 30%
Pharmaceutical – 10%
Manufacturing – 10%.
The company expects that the IT sector will provide the greatest growth opportunity, with financial services following behind. The pharmaceutical industry is likely to show the slowest growth as the Learning Factor perceive that these organizations are more protective of their learning functions.
As at Nov 2008, The Learning Factor managed c. 70% of its courses within an ILT environment. The company perceives that this will remain the case for at least the short-to-medium term as clients are utilizing eLearning, not as a basis for course delivery, but as a means to deliver pre-work before entering a classroom environment. Despite this, there is an increase within the company’s client base in the utilization of simple blended solutions, with an estimated 15% of the company’s courses delivered using a blended environment. For example, within leadership courses, executives may be given access to Books 24/7 on a Blackberry to enable them to read a specific chapter of course materials following a classroom event.
In FY 2007, The Learning Factor:
Trained 25,000 students
Delivered 2,400 student days.
The Learning Factor offers technology neutral services to organizations; providing consulting advice on which LMS or eLearning solution is the most appropriate for a client need. However, the majority of The Learning Factor’s clients are using Janison LMS; a learning solutions company based in Australia.
Functionality of this software includes:
Support for course and module creation
Reporting tools focused on a number of learning data points, including course take-up, cancellations, etc.
Ability to manage threaded discussions
Access to embedded components
Access to reusable learning objects
Availability of a desktop portal
Time zone support.
Janison offers access to an LMS platform capable of handling large volumes of transactions; the company’s largest client has c. 250,000 employees.
In addition to LMS technology, The Learning Factor has developed its own GENESIS technology solution designed to automate some of the repetitive processes involved within the learning environment. This technology integrates with existing LMS’ or can be incorporated into a solution to include Janison.
Automatic functionality within the system includes:
Sending of email alerts for managers to authorize training requests
Program joining instruction dispatch
Ability to provide access to pre-work; the requirements for a particular course having already been ascertained and then sent to the relevant participants
Access to eLearning resources
Notifications of changes in learning events / arrangements for participants
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Sending of automatic course reminders; to reduce costs associated with no-shows / cancellations
Sending of evaluation forms following course attendance.
GENESIS also provides access to learning data for authorized managers including:
Number of participant bookings
No-shows
Evaluation feedback
Supplier comparisons
Costs per program.
The Learning Factor’s portal enables participants to refer back to the course details for further information after booking a learning event, e.g. to check the training program date, time and location, or their training history.
The Learning Factor has c. 20 FTEs involved in the delivery of learning BPO. These include:
Brisbane (operations center) – 15
Sydney (sales and marketing) – 5.
The majority of services offered by The Learning Factor are delivered collaboratively through the company’s collaborate network. This network includes offshore providers, for example within content development, which can be utilized as required on client engagements.
The Learning Factor considers the network of providers the company uses to be part of its intellectual property, and therefore as such, further details of these companies are confidential.
Estimated revenues by delivery service location in FY2007 were:
Australia – 45%
Asia Pacific – 40%
North America – 15%.
The Learning Factor is targeting organizations with c. 2,000 – 30,000 employees. Industries the company is focusing on reflects its revenue structure and include:
Financial Services
Information Technology
Pharmaceuticals
Manufacturing.
As at Nov 2008, all Learning BPO is provided for company employees. However, the Learning Factor expects this to change significantly within the medium term, with the company looking to target extended enterprise learners, particularly within the IT sector. For example, revenues over the next three years may reach c. 40% for customers and channel partners.
The majority of the Learning Factor’s client relationships are confidential. However, the company does provide services to a major financial institution in Australia.
Services provided to the client to c. 23,000 participants through 3,000 learning programs include:
Design and Development of over 30 training programs
Provision of national facilitators to deliver programs
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Centralized “Learning Services Contact Centre”, providing a dedicated point of contact for all training requirements through client-specific phone, web and email contacts
Scheduling of training programs and participant wait list management
Internal marketing and promotion of learning services to end users
Participants booking and program joining instruction management
Book external facilitators or learning companies
Organizing participant pre-work
Administration of psychometric tools for learning programs
Venue sourcing and booking of training rooms that meet learning specifications
Booking of additional learning requirements such as TV’s, cameras etc
Sending out training materials including program pre-work
Management reporting to provide visibility of enterprise-wide training spend.
Results of the relationships include:
94%+ client satisfaction rating
Reduction in venue costs of up to 75%
Reduction in facilitator costs of up to 30%
Transactional error rate reductions from 60% to 2%.
Pricing within the Learning Factor is based on a variety of methods including:
Number of employees
Number of training days.
Contract lengths are typically between 3 – 5 years.
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M Logica
Logica is one of the largest indigenous European IT services companies having consolidated a number of regional IT services companies including:
WM Data (Nordics), acquired in October 2006
Unilog SA (France), acquired in January 2006
Edinfor SA (Portugal), initially acquired a 60% controlling interest in April 2005: acquisition of the remaining 40% minority interest in Edinfor from EDP for £42.0m (€55.0m) was completed in March 2008
CMG (Netherlands), merged with Logica in December 2002.
Combined with the company’s original home market in the U.K., these acquisitions form the basis for Logica’s four primary geographic markets: the U.K., the Netherlands, the Nordic region and France.
Logica positions itself as a provider of a full range of services from consulting through implementation and integration to outsourcing.
In January 2008 Logica created a new Outsourcing Services division. The new division, with c. 9,000 employees, became operational in Logica's largest European geographies from Q1 2008 and will be in place across the whole organization by 2009.
Logica offers the following outsourcing services:
Business Process Outsourcing (BPO):
HR administration, payroll services, and learning (inc. learning BPO)
Credit management
Document handling
Managed learning
Vertical-specific services such as Energy Pool Funds Administration (EPFA).
IT Outsourcing.
Learning BPO services within Logica originate from CMG, but additional training capabilities have been acquired through other companies, including WM Data.
This report focuses on the learning BPO services offered by the company. Most true learning BPO activity is provided within the U.K. through the company’s Human Capital Services (“HCS”) business unit. This was created in H1 2008 to enable the company to leverage learning across all U.K. HRO capabilities, including mobility services, payroll, benefits administration and compensation management. Unless otherwise stated, data given in this report refers to the U.K. LBPO business within HCS.
Though the company has not consolidated learning services into one business unit across Europe, the organization’s management aims to present a more consolidated proposition to the marketplace.
NelsonHall estimates that the company has c. $200m learning services revenues across Europe in FY2007. 50% of this revenue is generated from learning activities that include administration. However, over half of this is part of wider IT outsourcing (“ITO”) programs and not standalone learning BPO. NelsonHall excludes these activities from its definition of LBPO.
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Therefore, NelsonHall estimates that $36m of this is generated through learning BPO services, with 64% of this from the U.K.. The remaining services are delivered within Germany, Portugal, and the Nordics. Swedish and Dutch learning services are focused on the hosting of learning management systems and not LBPO.
Total European LBPO revenues by tower are estimated at:
Learning Delivery – 40%
Learning Content – 30%
Learning Technology – 10%
Learning Administration – 10%
Learning Consultancy – 10%.
The company estimates that c. 90% of learning services arrangements include some form of administration, however, NelsonHall estimates that at least half of these are part of wider ITO agreements.
Revenues by industry for the U.K business ($26m) in FY2007 were estimated to be:
Public Sector – 66%
Commercial – 34%.
Logica expects to expand the company’s LBPO footprint within the U.K. public sector, particularly within the central government and healthcare sectors.
Services offered within LBPO include:
Training consultancy
Content management, including provision of blended learning solutions
Marketing support for learning programs
Learning logistics
Subcontractor management
Infrastructure management.
Exhibit II-31 provides further details of these services. Exhibit II-31
LBPO Offerings: Nov 2008
Source: Logica
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The company expects to continue to deliver these services within the U.K. market, and expand its portfolio within Europe; offering a more comprehensive learning BPO proposition across Europe, particularly within France, Netherlands and the Nordics, where (as at Nov 2008) most activity is focused on administration around hosting learning technology solutions.
Services are offered within a blended learning environment, though the company perceives that take-up of eLearning various considerably by country where the service is offered. For example:
United Kingdom; greatest mix, with c. 60% ILT and 40% eLearning
Sweden and Netherlands; all eLearning solutions as the company is providing hosted LCMS
Germany/France; mainly (>95%) instructor led courses.
Key delivery statistics for the learning BPO offerings include:
150,000 training days delivered across Europe
500,000 hours of eLearning material supplied for one U.K. client.
Logica is technology agnostic, working with all the key LMS providers including:
SumTotal
SABA
Plateau
ERP solutions (SAP, Oracle Peoplesoft).
Logica expects to leverage the wireless and mobile expertise within other business units in Logica within the LBPO service offering. As a result, the company is exploring mLearning technology around providing access to:
Aid Memoires
Audio-visual learning clips
Formal course refresh
Job checklists
Reading materials, e.g. books for executives (leadership assistance).
The company is exploring the use of iPods for delivery of learning, primarily for management training and instructional content for executives. For example, what steps do I take to run my monthly reports? Who do I need to engage for this particular approvals process?
In addition, the company is to continuing to develop eLearning technologies, including potential formal support of Moodle (www.moodle.com, a free open source eLearning course development solution) to encourage the re-use of learning modules and objects.
Logica partners with various content providers for access to their courses and solutions. For example:
Activ
AdVal
PPI Learning
QAInterquad
Synergy
Thomson Netg.
Logica has c. 1,000 employees involved in learning services, c. 170 are involved in HCS in the U.K., with approximately 50 of these focused on training administration
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(please note that these numbers include those involved in learning administration for ITO contracts).
Delivery locations for learning services include:
France; 2 training centers (Providing services as for Germany)
Germany; 9 training centers, with administration employees scheduling and reporting on the ILT courses delivered in the country
India; Bangalore (development center)
United Kingdom
Altincham and Reading (management and administration)
Bristol (ILT and eLearning)
Bridgend and Nottingham (hosted eLearning services)
Leeds and Stevenage (development centers)
In addition, there are technology administration employees located within Sweden, Finland and the Netherlands supporting the hosted eLearning solutions offered within these countries.
The company has an HRO center located within Manila, and NelsonHall expects the company to explore utilizing both this and the Bangalore service delivery center for management of some administrative activities within the short-to-medium term.
The company loosely targets organizations by industry covering:
Commercial sector; financial services, pharmaceuticals, telecoms and transportation
Public Sector; central government, and healthcare.
However, Logica is largely opportunistic when targeting LBPO arrangements, as the company wins most volume through its ITO business.
Within LBPO, the company is targeting:
United Kingdom
Germany
France.
Other countries, such as Nordics and the Netherlands, may expand services into true LBPO, but this will be opportunistic.
Current Logica LBPO clients include:
DELC (Defense Electronic Learning Centers); a global eLearning program supporting the MoD utilizing:
‘Walk-in’ DELCs
Classroom DELCS
Rapid reaction DELCs, as deployed on HMS Edinburgh
Laptop and courseware loan services
Infrastructure management
Help desk and support services.
DPA; a 15 year full learning BPO contract supporting the MoD’s defense acquisition training, requiring 20,000 delegate days of training delivery per annum. Services provided include:
Management training facility
Training administration
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Resource and quality management to ISO 9001:2000
Marketing
Project management and IT training
Training design and development.
Further information on Logica LBPO clients is confidential.
Pricing within Logica LBPO arrangements is based on the nature of the service required. However, key principles are:
Fixed price based on service provision
Fixed management charge, plus separate call-off course rates
Call-off catalogue services, which can be independently priced.
Contract lengths are typically between 3-5 years.
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N NIIT Ltd (including Element K)
NIIT Ltd (NIIT) is a global learning and technology company, headquartered in India. The organization offers services through two business units:
NIIT Ltd; offering learning services globally including instructor-led training, eLearning, blended learning and Learning BPO. Services within this business segment are offered to individuals, institutions and corporations
NIIT Technologies; offering IT and BPO services to organizations within a number of corporate verticals including Insurance, Banking, Retail, Transport, and Manufacturing.
Learning BPO is offered within NIIT Ltd, and this report focuses on the services provided within this business segment. Other NIIT BPO services are provided through the NIIT Technologies segment.
NIIT is structured into three reported business segments:
Corporate Learning Solutions (55% of FY 2008 total revenues); enterprise learning services, incorporating those services which NelsonHall define as Learning BPO. Services within this segment are provided to both partners and employees of client organizations. For example, the company has a number of clients within the IT industry where training is largely focused on customer education and channel partners.
Following the acquisition of Element K in November 2006, revenues for services offered through Element K are reported within the Corporate segment.
Individual Learning Solutions (32% of total revenues); providing career education learning services to individuals through training centers across the globe. Services include CATS for IT professionals, “NIIT Edgeineers” program for Engineering and IT students, board exam preparation solutions and SWIFT for internet and IT literacy.
This segment also provides Financial Management Training (3% of total revenues), which offers training for individuals in banking, insurance, finance and management.
School Learning Solutions (10% of total revenues); providing IT and IT-enabled training for private and government-owned schools in India
Exhibit II-32 provides a summary of NIIT Ltd FY2008 and FY2007 revenues by business segment. Financial year end is 31st March. Exhibit II-32
Revenues by Business Segment: 2007 - 2008
Business Segment 2008 ($m) Growth (%) 2007 ($m)
Individual 188 30 144
Corporate 138 21 114
Schools 25 19 21
Total 351 26 280 Source: NIIT Ltd
This report focuses on the Corporate business segment within NIIT Ltd.
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Revenues within the corporate business segment are generated through the following activities:
Products (courseware and off-the-shelf sales for enterprise customers) - $75m
Content development - $40m
Training delivery - $30m
Learning BPO - $35m.
Please note that these revenues are not mutually exclusive, e.g. BPO revenues include a proportion from content development and delivery.
Revenues by geography for FY 2008 in Learning BPO are estimated at:
United States – 65%
United Kingdom – 17%
Rest of the World (predominantly India) – 18%.
All Schools revenues are generated within India.
Under NelsonHall’s definition of learning BPO, NIIT School’s business has been excluded from the company’s total revenue generation within LBPO. This is under review for the next Learning BPO report due in 2009.
Learning BPO services offered by NIIT include:
Learning ROI and strategy
Curriculum design
Content development and management; including custom content development
Learning delivery and management; including eLearning delivery, and assessment solutions
Technology integration and management
Learning administration
Learning infrastructure management.
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Exhibit II-33 provides further details of NIIT’s learning BPO service offerings. Exhibit II-33
Learning BPO Services: Nov 2008
Process Services
Strategy and ROI Vision definition and review
Governance metrics and methods
Process audit and improvement
Sourcing strategy
Organizational structure of learning
Customer training business model
Curriculum design Curricula evaluation and design
Blended learning allocation and analysis
Learning resources specification
Content development and management
CBT/WBT/ILT development
Custom books / reference materials
Experience based simulations
Content conversion / localization
Assessment creation and management
Learning delivery and management
On-site classroom trainers
Online faculty and mentoring
Dynamic content delivery management
Application / process rollout
Technology integration and management
LMS/LCMS implementation and maintenance
Customizable, hosted LMS, with assessment
Virtual classroom offering
Knowledge portal with project reporting and vendor management
Learning administration Course management
Student enrolment
Instructor staffing and training
Scheduling
Materials fulfillment
Vendor management
Learning infrastructure Facilities provisioning
Global hosted technology Source: NIIT Ltd
As at Nov 2008, NelsonHall estimates that the company runs c. 75 sub-processes within learning administration for its BPO clients.
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NIIT methodology for developing learning BPO propositions is built around the Critical Mistakes Analysis. This focuses on the mistakes that reduce effective performance in the field, and then develops learning around those mistakes to improve workforce productivity.
NIIT considers supplier management for training delivery to be a significant part of its value proposition. The company has had experience with working with over 1,000 business partners, and has c. 50 active training partners globally currently involved in corporate accounts.
Supplier management services include:
Business approval;
Background check
Reference check
Technical evaluation, typically including investigation of supplier;
Competency
Shared values / vision
Business experience
Financial stability
Skills coverage
Contracting, including:
Contract discussion
Price negotiation
Performance tracking, which usually monitors various metrics such as;
% of positions filed
Turnaround time per request
Quality of delivery
Invoicing accuracy, timeliness, completeness
Flexibility of supplier
Contractual compliance.
The acquisition of Element K has increased NIIT’s offerings with content design, and development, eLearning, and has enabled the company to have greater access to off-the-shelf content for its clients.
NIIT’s content library includes:
Information technology (4,027 courses available, including vLabs through Element K); offering content covering Microsoft, Sun, IBM, Cisco, Adobe, etc. Courses cover topics including:
Business skills (1,466 courses from Element K); including providers such as Harvard Business School, The Quality Group, getAbstract, etc.
Compliance (402 courses available from Element K); providing content from various partners including Brightline Compliance, PureSafety, Vivid Learning Systems, etc.
Within NIIT, learning BPO relationships have traditionally grown from training delivery arrangements, with organizations looking to expand the relationship with NIIT through delivery of technology services (see later) and then learning administration.
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Key delivery statistics for NIIT’s learning services business include (as at March 2008):
2,000 hours of eLearning content
20,000+ training days per year
150+ university courses
1,500 print catalogs
4,000 online sources and vLabs
285,000 student learning hours
20,000 hours of ILT
29,000 mentoring hours
500,000 hosted users on KnowledgHub LMS, and more than 3m students
297,000 transactions per month undertaken through NIIT infrastructure.
Prior to the Element K acquisition, NIIT utilized its own LMS proprietary system, CLiKS. The company has c. 30 customers for this hosted solution. These customers will continue to be supported. NIIT hopes to migrate all CLiKS customers as appropriate.
Following the acquisition, NIIT’s preferred LMS / LCMS solution is KnowledgeHub.. The company has a partnership with SumTotal Systems, allowing them access to this company’s learning technology solutions.
Current functionality of KnowledgeHub includes:
User administration; administration of students and courses, including ability to track student progress and course completion rates
Content administration; content information storage and retrieval facility
Reporting facilities; standard and ad hoc reporting capabilities, e.g. enrollment, retirement of students, usage statistics, etc. Khub provides 13 standard reports covering topics such as student log-ins, attendance, and course completion
Professional development management; customization of learning paths, by individual or role
Communication; onsite and email messaging to enable administrators to send messages to students
Assessments; ability to utilize in-course assessments which can be created to gauge learner understanding of custom content. Stand Alone Assessments can be created to gauge learning on any course or group of courses or learning activities
Order / subscription management; functionality to enable access to products by students for a specific duration
Integration; ability to integrate with Web Services API to ERP, HRIS, e-commerce systems, and other LMS.
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Exhibit II-34 provides examples of partners for Element K and NIIT as at Nov 2008. Exhibit II-34
Example NIIT Partnerships: Nov 2008
Process Partner Capabilities
Learning Content Harvard Business School Content licensing arrangements with providers specializing in specific industries and domains, e.g. I.T., Compliance management, sales.
GetAbstract
Centre for Leadership Studies
PureSafety
Brightline Compliance
Vivid Learning System
Quality Group
Training Delivery Samsung SDS South Korean
Automated Systems Ltd Hong Kong
Training Choice APAC
New Horizons Worldwide
Executrain Worldwide
PPI Worldwide
Technology Internap Co-hosting service provider
Distribution Various providers across the globe, including Talento, KAZ, BT, PageForward
Element K product distribution
Source: NIIT Ltd
NIIT delivery locations are located within all continents globally; offered through partners, the company’s own locations and client sites.
Overall the company has c. 3,850 employees (as at March 2008).
NelsonHall estimates that c. 1,750 employees (excluding contractors) are focused on the provision of all learning services within NIIT’s corporate business segment (including Element K):
Learning technology outsourcing, e,g., hosting, helpdesk services, etc. – 220
Learning administration – 40
Training delivery – 30
Courseware and product development – 450
Custom content development – 850
Support roles (sales, marketing, etc.) - 160.
Delivery locations for Learning BPO are located within:
North America; Rochester (headquarters), Chicago and New York, and a number of home-based trainers (both in the U.S. and Canada) that travel for c. 15-18 days a month delivering training.
Europe; U.K., predominantly home-based trainers serving the company’s U.K. customer base
India; Bangalore, New Delhi, and Mumbai (offices are located within these cities)
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Australia; Melbourne and Sydney.
Content development is done in all locations within the U.S. and India.
All training administration services are managed from the New Delhi delivery location.
NelsonHall estimates:
1,100 employees are heritage NIIT
650 employees are heritage Element K.
Approximately 95% of FTEs involved in BPO engagements (providing heritage NIIT services) are located offshore for NIIT. However, only 34% of FTEs providing services for Element K are offshore. Element K require strong onshore presence due to the high level of interaction required to develop specialized content for its customers.
All 40 administrative personnel are located within the company’s New Delhi location.
NIIT perceives that suitable processes for delivery offshore within learning BPO include:
Schedule production
Invoicing
Vendor enquiries
Customer enquiries (after some more back office focused services have been provided to the client as “a pilot”).
Strategy for location development is focused on:
Getting more people ”on the ground” within areas NIIT are focusing on growing, e.g. U.K.
Establishing a content development location within the U.K. to enable more high touch interactions within clients during instructional design.
NIIT targets organizations for learning BPO with:
A global presence; operations in a number of continents, particularly those within the global 1,000
Multiple locations, so a dispersed workforce or
Multi-lingual training requirements.
customer base with potentially similar training requirements
Geographically, the company is focused on targeting organizations within:
North America
Europe; principally U.K., Germany and other English speaking locations, such as the Netherlands, and Switzerland
Asia Pacific; China and India in particular.
Target industries for NIIT include:
Banking, Financial Services and Insurance (BFSI)
Consulting
Healthcare; the company is in the initial stages of expanding targeting efforts within this sector due to the requirement for compliance training
Manufacturing
Technology
Telecoms
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Exhibit II-35 provides examples of some of NIIT’s Learning BPO clients. Exhibit II-35
Example Learning Services Clients: Nov 2008
Start year
Region Industry Client Name
Example Services
2007 4 years auto-renewal
N/A IT hardware company
Product training delivery across Europe Vendor management Location set-up Instructor provisioning Student registrations
2006 4 years auto-renewal
N/A Consumer product manufacturing company
Training administration Learning contact center services; helpdesk available in 18 languages, in c. 25 countries IT Training delivery
All administration managed by the HR department outsourced to NIIT. The company estimates that this is 33% of the total learning administration done at the company
2005 N/A Manufacturing (Electronics and Durables)
Learning administration Trainer outsourcing
2005 U.S. Retail Program oversight, Content design/development, Technology management
2005 North America Manufacturing Program oversight, Content design/development, Enrollment management, Technology management
2005 U.S. Financial Services Program oversight, Content design/development, Enrollment management, Technology management
2005 International Financial Services Program oversight, Enrollment management, Technology management
2005 International Chemicals Content design/development, Reporting and measurement, Enrollment management, Technology management
2004 U.S. Owens Corning Strategy development, Content design/development, Vendor management, Technology management
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Start year
Region Industry Client Name
Example Services
2003 North America Accor Program oversight, Content design/development, Reporting and measurement, Enrollment management, Technology management
2003 International IT equipment manufacturing
Program oversight, Training delivery, Content design/development, Reporting and measurement, Enrollment management, Technology management,
2003 International Hospitality Program oversight, Content design/development, Reporting and measurement, Enrollment management, Technology management
2003 N/A Automotive Manufacturing
Program oversight, Content design/development, Reporting and measurement, Technology management
2003 U.S. Manufacturing Program oversight, Content design/development, Enrollment management, Vendor management, Technology management
2002 International Training Provider Content design/development, Reporting and measurement, Enrollment management, Technology management
2001 India Financial Services State Bank of India
Content Training delivery, including admin
N/A N/A Manufacturing eLearning and ILT delivery Access to mLearning capabilities Collaborate learning solutions Learning administration Learning technology
Source: NIIT Ltd
Pricing within NIIT is based upon:
Per user (for hosted services in particular)
Per transaction, e.g. per employee attending a program, etc.
Average contract lengths, for contracts including administration and technology services, are c. 3 - 5 years.
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O Talent 2 Learning Services
Talent2 is an Australian-headquartered human resource outsourcing organization. The company positions itself within HRO as a talent management company; offering services to organization to enable them to acquire, optimize and manage their employees better.
Talent2’s learning services were created following the acquisition of Bized Services in May 2007. Bized was purchased to complement Talent2’s existing capabilities within HR administration and recruiting services, creating a talent management focused provider.
Overall, Talent2 revenues in FY2008 (year ended June 2008) were A$229m, or US$222m.
Exhibit II-36 provides details of these revenues by business segment. Financial year end for Talent2 is 30th June. Exhibit II-36
Revenue Share by Business Segment: 2007 – 2008 (USD)
Business Segment
FY08 Rev Share (%)
FY08 Revs ($m)
Growth (%)
FY07 Revs ($m)
FY07 Rev Share (%)
People and recruitment
59 135 45 94 61
Managed services 32 75 74 43.2 28
Technology 9 19 14 17.2 11
Total 100 229 49 154.6 100 Source: Talent2 Annual Repor
Comment: the above figures are in USD with an exchange rate of 97c/AUD. Given the current rate is closer to 69c, should these figures be in AUD? If so, I will provide.
Growth within the managed services business has been significant due to:
Significant wins within payroll services
Expansion of existing managed services contracts
Investment in software and HRO Service Centres to enable scale.
Key metrics for the company in FY2008 include:
17m pay-slips processed per annum
1,6m online course enrollments managed
10,000 contractor hours managed
9,000 jobs filled.
The company offers outsourcing services across a number of HR processes, including:
Recruiting services (Acquire) covering:
Executive search
Executive recruitment
Executive contracting
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Project recruitment
Board search.
In addition the company offers recruitment process outsourcing services including:
Talent acquisition management
Internal mobility services
Contractor management services
Recruitment projects
Recruitment system implementations
Recruitment function reviews
Graduate recruitment
Employer branding and careers website development
Online induction programs.
Learning services (Optimise) including:
Learning analysis
Strategy and solution design
Content management and development
Co-ordination and administration of organizational learning
Infrastructure and reporting.
Payroll and HR administration (Manage) offerings focus on:
Payroll services, including bureau payroll, time and attendance
HR/Payroll call center services
HR Information Systems – software and services (including licence and ASP sales)
Multi-process HR outsourcing; offering a combination of the above services to sa single organization.
This report focuses on the learning BPO services Talent2 offers. These are part of the company’s Optimise services.
NelsonHall estimates Talent2 learning BPO revenues for FY 2008 to be between $20-25m; all of this is generated from Asia Pacific headquartered organizations.
The company offers services within all four learning towers. NelsonHall estimates revenues by learning tower for FY 2008 are:
Learning administration – 51%
Learning delivery – 24%
Learning technology – 21%
Learning content development – 5%.
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Exhibit II-37 provides further details of the learning BPO services offered by Talent2. Exhibit II-37
Talent2 BPO Offerings: Sept 2008
Source: Talent2
The company offers subsets of these learning services to clients as required, but typically expects to take on some form of administrative activities within its learning engagements. Approximately 95% of activity within the business is focused on providing services to client employees. Clients within the telecoms sector have extended contracts to include training for technology partners.
Talent2 estimates that the total percentage of learning administrative activity that is outsourced to them varies considerably by client. This is because:
Learning and development function does not have total control over all learning within an organization
Learning and development is heavily business-unit or regional focused, so the centralized learning function which is being outsourced does not have a mandate to manage all learning within an organization
An organization has a specific training brief, e.g. requirement for SAP, executive training.
Specific client examples of this include:
For one conglomerate, the company does all administration for the senior executive training, this is 20% of the total administration done.
For a large banking organization, the company manages c. 50% of learning administration as there are large pockets of regional learning activity.
The learner service centre provides enquiry resolution through email, phone and fax. Each enquiry is tracked via a case management tool.
The learner service centre has two main service segments:
First level of support, handling basic learner enquiries
Technical team dealing with more complex learner enquiries.
For the year ending 31st December 2007, the centre handled c. 30,000 enquiries. Enquires for the first level of support (typically handled at first point of contact – 93%) include:
Infrastructure; support on using the LMS and accessing the appropriate learning
Course management; issues relating to managing courses or registrations
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Reporting; providing access and interpretation for management reports
The technical team handles enquiries involving courseware issues and enrolments; for example providing advice on the most appropriate course for an individual to attend based on their current competencies and future learning goals.
To monitor the center’s performance, standard call centre metrics are used. For 2008, call center metrics included:
Grade of Service (GOS) above 80%
Abandonment rate less than 5%
The company offers solutions within an eLearning environment; with approximately 40% of courses delivered online. However, blended courses are rare within the Asia Pacific region, reflected in the company’s estimate that only 5-10% of the courses that it delivers are blended.
However, Talent2 perceives that in the Asia Pacific region the potential for eLearning, is less than that of mLearning. This is because of the penetration of mobile devices within the region. The high level of access to mobile devices makes it very easy for employers to offer “just-in-time” learning to employees. For example, a global mobile telephone manufacturer has utilized mobile phones to provide advice to technicians on technical repairs.
Talent2 perceives that mLearning will become more commonplace now mobile technology has advanced, reducing the limitations for pushing learning to employees. For example, previously mobiles could only be utilized for reading text, due to 3G advances; video and simulations are feasible.
Over the last 12-18 months, Talent2 perceives that organizations require a greater onsite presence within learning BPO engagements; particularly where some delivery is managed nearshore. For example, c. 18 months ago, 20% of the company’s clients had an onsite presence, as at September 2008; 50% of clients require this service.
This is due to the need for organizations to have someone available locally with intimate knowledge of their processes to approach for issue resolution.
Talent2 has a core talent management system, as well as a learning management solution, Southrock. Approximately 50% of the company’s client base utilize the Southrock LMS. Functionality of the system includes:
Content management; ability to upload content using one-click
Assessment tool; wizard style assessment creation, including ability to manage automatically scored questioning, as well as tutor marked assignments
Evaluation tool; another wizard-based creation tool covering evaluations
Tutor help; ability to connect learners with assigned tutors for particular courses. Includes a communication tracking facility allowing communications between learner and tutor to be monitored. In addition, the facility lets learners know when questions are answered. Tutors can submit answered questions to a publishable Q&A relating to the relevant course
Notifications; automatic email notifications covering various topics including enrolment confirmation, and scheduled course completion reminders
Catalog; view of courses available within the Southrock catalog. Either as a list, or a searchable course catalog. Leaners’ views of content can be personalized based on their profile. Course enrolment can be set to be approved by managers or other employees
Curricula; ability to manage groups of courses for certification, competency mapping, or those defined by a job role. Curricula can be created at a Corporate (global), business unit or work unit level. Curricula may be mandatory, or assigned to an individual or groups of learners.
Discussion groups; ability to manage a discussion associated with a course
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Skill codes; ability to develop an organization wide skills database. Individuals can be assigned codes, or allocated them based on completing particular courses
Job roles; ability to create and assign curricula to an individual based on their job role
Self-registration; ability to assign job roles and curriculum for learners, or to assign learners to a pre-populated organizational structure for reporting requirements
Learner development plan; this is an interactive facility between learners and managers. Courses are identified as part of an individual’s development plan are automatically assigned to the learner’s training plan.
In addition to the Southrock LMS system, the company has a specific solution for analytics which is integrated with this LMS. Metrics tracked include learning spend, attendance, and compliance rates (with respect to specific supplier utilization).
The company’s LMS enables collaborative learning, however Talent2 has not seen real traction for this within its current client base. Significant technology developments at Talent2 are expected to include:
Increase in implementation of just-in-time learning, e.g. particularly within SAP training where learning is triggered as operators struggle with a particular task, such as ordering within SAP
Online support tools; linked to “just-in-time” learning, Talent2 is likely to focus on developing on-demand training support tools for specific applications, e.g. SAP
Podcasting / mLearning; Due to Talent2’s opinion that eLearning is demonstrating less traction, the company expects to develop technology here over the next 12 -18months (see earlier in this report for specific examples of mLearning application).
As of September 2008, Talent2 has c. 1,200 employees, of which c. 150 are focused on learning BPO.
The company has c. 40 employees within managed learning services. Other employees are distributed within (highest to lowest):
Associates
Content development
Consulting
Technology
Business systems learning
Admin support staff
Executives
Career management.
Employees by region include:
Australia; New South Wales – 32
Australia – Victoria – 85
Australia – South Australia – 8
In addition the company has employees based in Hong Kong, Japan, Singapore China, Macau, UK, Middle East, Papua New Guinea and New Zealand. As of September 2008, Talent2 is transitioning a number of processes to a nearshore location in Kuala Lumpur, Malaysia. This small team (c. 15 employees) is expected to transition by close Q3 2008. Processes that Talent2 consider suitable for nearshore locations include:
Basic reporting around the training function
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Some logistics services, e.g. instructor scheduling, sending out course materials
First level contract center support, such as:
Planning and scheduling calendars
Tracking attendance
Paying invoices.
In the medium-to-long term, NelsonHall anticipates that Talent2 will explore the development of a delivery center within China due to the strong regional language capabilities, e.g. Mandarin, Japanese, etc.
Talent2 targeting is focused on:
Asia; the company has established presence within Australia, and New Zealand. Operations within Japan, Hong Kong, Malaysia, and Singapore have been established since Q1 2008. These countries will remain the key focus within the region. However, the company is expecting to expand targeting to include Chinese organizations in the medium term
United Kingdom; the company has established offices within the U.K. and is looking to develop its position within the European marketplace; potentially through acquisition
NelsonHall perceives that there are limited players within Europe / U.K. that might be considered suitable for expanding Talent2’s learning BPO capabilities. It is possible that acquiring a broad-based training delivery organization within the U.K. with strong board-level relationships may provide a suitable route to market for the company
Middle East; Talent2 has a small presence within Abu Dhabi and has seen a keen interest for its services within the region. The company expects to continue to develop business within the Middle East through this office
Companies with a minimum of 1,000+ employees
Industries, such as (ranked by revenue):
Financial services
Telecoms
Conglomerates
Defense and government organizations.
Talent2 does not expect industry targeting focus to change. However, the company is expected to re-emphasize cost reduction advantages in outsourcing learning, particularly within the financial services sector, as companies look to re-evaluate training budgets in light of the global economic downturn.
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Exhibit II-38 provides details of some of the company’s clients in Learning. Exhibit II- II-38
Example LBPO Clients: Sept 2008
Start Company Renewal Cycle Services
1999 - Ongoing
Leading Australian bank
3 year renewal Consulting
Learning Centre Management
Administration
Infrastructure Support (LMS, LSMS)
Ongoing Telstra N/A Consulting
LMS
Training Delivery
2005 - Ongoing
BHP Billiton N/A SAP Learning Support
Vendor Management
Content Development
Administration
2004 - Ongoing
International Bank
2 year renewal Hosted Learning Infrastructure
Employee Support
Compliance Management
2005 -Ongoing
US Multinational
2 year renewal Program Management
Administration
Vendor Management
2008-Ongoing
Major Aust Bank
3 year renewal Customised Content Development
Administration
2008-Ongoing
Telecomunications Company
3 year renewal Fully managed L & D Function
2006-Ongoing
NZ Bank 3 year renewal Learning Centre Management
Administration
Infrastructure Support (LMS, LSMS)
Compliance Management
Reporting Source: Talent2
Pricing within Talent2 learning contracts is based on either:
Variable rates, with organizations paying per event, or per consultancy hour depending on the package of services being delivered
Fixed rates; where organizations agree a fee based on a defined set of deliverables, service standards and level of activity, e.g. number of training
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events expected, number of students, number of resources dedicated to that client, number of employees, etc.
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P Raytheon Professional Services
Raytheon Professional Services (RPS) is a subsidiary of the U.S. Defense contractor, Raytheon Company, which had FY 2007 revenues of c. 21.7$Bn, up from $19.7Bn in FY2006. Raytheon markets its Global Training Solutions as a key growth area for the company. RPS’ experience with large-scale training programs in the commercial sector has delivered an important differentiator in Raytheon’s foray into providing training solutions for government and military clients, most recently NASA, the U.S. Army, the U.K. Ministry of Defence and the U.S. Federal Aviation Administration.
RPS began providing learning BPO services in 1995, upon signature of a contract covering the European operations, with a U.S.-based automotive company. Since this contract’s inception, it has been expanded to cover North American (1998) and Asia Pacific (1999) training requirements as well.
RPS offerings within learning services focus on project based and longer-term LBPO relationships, which the company continues to perceive yield the greatest value for organizations.
Learning BPO Offerings Learning BPO offerings include:
Business model development; development of an outsourcing model designed to fit with company objectives
Learning strategy and curriculum architecture; RPS focuses here on:
Assessing learning organization performance
Developing learning strategies and plans
Designing and implementing learning governance models
Developing supplier management strategy, and then managing those suppliers
Quantifying the value of learning services as related to client requirements
Utilizing the company’s Architect™ methodology to create curricula blending training delivery in multiple formats.
Training course design and development, including:
Sourcing, developing, translating and localizing curricula in multiple delivery formats: blended learning, instructor-led training, training manuals/technical publications, and simulators
Designing and implementing certification programs
Designing and implementing placement assessment programs.
Training administration, including:
Optimizing and managing training administration and delivery processes
Operating client support centers
Managing LMS on a day-to-day basis
Delivering tuition assistance services
Supplier management; over the last 12 months, the company has experienced greater interest in supplier management services within LBPO, both in new RFPs, as well as extensions to existing contracts
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Learning Technology Management; including the sourcing and implementation of appropriate LMS technologies
Performance Consulting; helping organizations understand how they really work, identifying informal structures, and utilizing this understanding to help organizations improve business performance; “helping them change from the inside out”.
Key learning delivery statistics for RPS in FY 2007 include:
4,300hrs of finished learning content developed
9.3m hours of training delivered
3.5m assessments administered
2.5m individual learner registrations handled, up from 1.8m in FY 2006
250,000 inquiries responded to by customer support centers.
RPS serves its clients across 78 countries, and in 30 languages. Languages supported include:
Bahasa Indonesia
Bahasa Melayu
Bulgarian
Chinese
Croatian
Czech
Danish
Dutch
English
Finnish
French
German
Greek
Hindi
Hungarian
Italian
Japanese
Korean
Norwegian
Polish
Portuguese
Romanian
Russian
Serbian
Slovenian
Spanish
Swedish
Tamil
Thai
Turkish.
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LBPO Revenues and Analysis
NelsonHall estimates that RPS’ learning BPO revenues in FY 2007 were c. $200m; up 20% compared to FY 2006 revenues.
NelsonHall expects these growth rates (c 15 – 20%) to continue at least in the medium term, as the company continues to be successful within the government, defense, and automotive sectors in North America, and increasingly within global markets.
Geographically (by headquarters of client) this includes:
85% from North America
15% from Europe
5% from Asia.
The company is now generating revenue from Asian headquartered organizations; a significant change from FY 2006. This shows the company’s commitment to targeting organizations within this region; where the market is much smaller than other regions, but growth is strong. NelsonHall expects this region to be increasingly fruitful for RPS, particularly within China, and Australia.
RPS has presence in all major continents due to the company’s global delivery capabilities. Revenues by delivery location for FY 2007 were:
North America – 45%
Mainland Europe – 32%
United Kingdom – 15%
Rest of the Word – 10%.
NelsonHall FY2006 estimates for RPS’ BPO revenues by industry are:
Automotive – 55%
Defense – 22%
Utilities – 9%
Financial Services – 5%
Pharmaceutical – 4%
Industrial Equipment – 2%
Retail – 2%
Other – 1%.
NelsonHall estimates RPS LBPO revenues (FY 2007) are generated across the four learning processes as follows:
Learning administration, including vendor management and learning evaluations – 35% of total
Content design and development – 25%
Learning delivery – 25%.
Learning technology – 15%.
RPS provides learning across a number of different media, depending on client requirements. For example, courses can be ILT or eLearning based, or both as suitable. In addition, the company will utilize other technologies, such as simulations, collaborative tools, and podcasting to provide a blended learning environment for organizations. Overall in FY 2007, the company estimates c. 40% of courses are delivered in an eLearning environment.
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The company estimated in FY2007 that c. 54% of clients utilized a blended learning solution. The company perceived that acceptance of blended environments is often dependent on company technology infrastructure and cultural preferences. For example, blended delivery is not as widely accepted within regions outside North America, so ILT tends to be the main form of instruction here.
RPS provides services to both the extended enterprise and employee end-users. The company has been serving the extended enterprise since the creation of the company 15 years ago.
NelsonHall estimates that globally c. 60% of FY 2007 revenues were generated from extended enterprise clients. In Europe, c. 85% of activity is extended enterprise based. This is due to the contract the European operations have with a large global automotive company which represents the bulk of the region’s revenues.
RPS emphasizes various aspects of its LBPO offering as key differentiators within the marketplace:
Architect methodology and solutions; RPS utilizes proprietary methodologies and technology for enabling curricula re-design focused specifically on what the key tasks within an organization are. Courses can then be based on these key tasks in order to align learning to organizational requirements
Catalyst engagement; this is RPS’ proprietary process for identifying informal networks within organizations to identify knowledge brokers within an organization, with a view to:
Proving the existence of these networks and the key players in each
Creating an environment where networks can be more efficiently accessed and utilized.
Catapult solution; this is a significant technology development since this research was performed 18 months ago. This technology enables RPS to drive standards for web-based training which can then be applied globally. Learning is stored as XML files/objects, which can be searched (using meta-tags) and stored within RPS’ systems, enabling re-use across the company’s global client base. New courses can be deployed locally based on these files, with in-country proof readers previewing the content and localizing as required.
For example, within an extended enterprise contract in Europe RPS’ was able to launch a new training program based on existing content in Russia within 60 days.
Innovation Station; brings leaders together in an “intellectual and emotional thoughtspace” – so they can view their opportunities and challenges in a completely different light. This remarkably effective approach, which leverages not only a team’s analytical abilities, but also its creativity and imagination, can generate breakthrough innovation, bolster business’s competitiveness, and further unify the team around a common vision.
Learning analytics; Performance of more effective data mining (Data Driven Decision Making or “D3M” offerings). For example:
Does the completion of a particular course by employees reduce costs associated with that skill? e.g. reduction in warranty costs following technical certification programs.
General assessment of the impact of learning on an organizations performance, e.g. impact of sales training on sales cycle and customer satisfaction.
NelsonHall expects the company to strengthen its offering by looking to acquire capabilities over the medium-to-long term.
Any future acquisitions are likely to center on increasing:
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Geographic capabilities within Europe and Asia
Blended delivery capabilities, potentially within gaming technologies
Virtual world capabilities; RPS’ are exploring the use of virtual worlds within learning. The company has an island within Second Life and is looking to develop virtual technology for the future, particularly as Generation Y enters the workforce.
Scheduling capabilities within learning management technology.
Technology RPS is technology agnostic; working with whichever LMS / LCMS has already been implemented by organizations. SumTotal is the company’s largest partner, but the company also works with other LMS providers, including SABA and Plateau.
In addition, RPS has a proprietary LMS solution, which has a “best fit” for automotive organizations. Functionality of the product which increase product suitable in this industry include:
Certifications management
Ability to manage, design, etc. technical notes
Ability to access product information quickly.
RPS’ LMS has c. 500,000 registered users, and the company managed 4m online tests within the product in 2007.
Technology developments at RPS will include:
Exploring application of mLearning (through iPods and Blackberry), and virtual learning
Social networking, including utilization of wikis and blogs within a learning environment.
Delivery Capabilities As at October 2008, RPS had 900 employees worldwide including:
400 located within the U.S.
340 in Europe, including Germany, Spain, the U.K., Russia and Turkey
130 in China, Australia, India and Singapore.
RPS’ largest business functions, by total number of employees worldwide (Nov 2008) are:
Training management and administration
Training delivery
Content development
Program / project management
General services and administration.
RPS has 8 regional delivery centers globally to provide some common processes to the regions the company operates in.
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Exhibit II-39 provides details of the company’s regional center locations. Exhibit II-39
Overview of RPS’ Learning BPO Services: Nov 2008
Location Content Development Training Administration
Americas
Dallas √ √
Mexico City √ √
Detroit √ √
Europe
Barcelona √
Frankfurt √ √
London √ √
Moscow √ √
Asia Pacific
New Delhi √ √
Melbourne √ v
Shanghai √ √ Source: RPS
RPS’ Catapult methodology involves the transfer of learning content development and design work across the globe, depending on where appropriate expertise is located. RPS defines off-shoring as moving content and development around the globe to where it creates “best value” for the client.
In addition, the company has selected India based Expertus to provide additional low cost content development services.
Currently, RPS has less than 10% of the company’s FTEs located offshore. The company does not expect this to change significantly in the future.
Targeting and Clients RPS targets organizations for LBPO based on:
Company size; 10,000+ employees
Dispersed workforce; typically 25 – 50+ locations either nationally or internationally, e.g. One automotive manufacturing extended enterprise client has 7,500 retail dealerships.
Geographically, the company’s principal targets are:
North America; United States, Canada, Mexico
Europe; United Kingdom, Germany, France, Spain, Russia
Asia Pacific; Australia, India, China
Middle East, specifically within training opportunities around the terrorist threat.
The company is experiencing little demand for its LBPO services within Latin America or Africa.
By industry, the company is targeting:
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Organizations with similar domain expertise to Raytheon
Industries with a complicated product mix
Large dispersed employee base.
Therefore, key industry targets include:
Automotive/OEM
Defense/Military/Government
Financial Services
Pharmaceutical
Energy and Utilities
Retail sector.
However, the company is open to engage with organizations from all industries.
Current RPS clients include:
General Motors (GM); announced in July 2006 to provide training to 70,000 technicians in GM dealerships in the U.S. through GM’s technical college. Services provided include development of web based training, satellite-delivered seminars, interactive simulations, access to searchable illustrations and videos, and development and implementation of college learning management system
Isuzu Motors; a contract extension announced in June 2006 to provide training to this company’s U.S. dealerships. Services provided include web-based simulation courses, workshops and implementation of a certification program, including web assessments for fixed operations personnel.
This is an extension of a 5-year contract. Previous work done for Isuzu within this contract includes conversion of Isuzu CD-ROM-based training to a Web-based format, conversion of some face-to-face workshops into Web-based simulations, and the negotiation of an agreement with GM to conduct Isuzu dealership training at 36 U.S. GM training facilities
Pfizer; announced in June 2006. Services provided include training administration for learning events in the U.S. and the U.K. content administration services to assist Pfizer’s implementation of a new LMS, and help desk support for learners
Midas International; announced in May 2006. Services provided include the design and development of 99hrs of courseware targeted at Midas' 10,000 technicians working at nearly 1,800 locations, access to web-based delivery (c. 50% of total courseware developed), the design, development, implementation and hosting of a learning management system, the design and development of training evaluation tools and communication services to increase training visibility within company franchises.
DTE Energy; announced 2006; Services provided include all four learning towers for the 11,000 Michigan employees in DTE Energy’s largest operating subsidiaries; Detroit Edison and MichCon. RPS designs, develops and delivers business- and technical-skills training, as well as providing other services related to learning technology, skills assessment, training logistics, learning supply chain restructuring, and tuition reimbursement. During the course of the engagement, RPS is to introduce blended learning environment, including expanding DTE’s application of both real-time and 24-by-7 web-based training, to complement traditional classroom-based training.
In addition, Raytheon, including RPS, was awarded a recent (Nov 2008) 10-year $437m contract win in the U.S. for the Federal Aviation Administration to support the
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training of air traffic controllers. Services provided under the terms of the contract include:
Delivery of existing academy qualification and specialized training
Supporting classroom and simulation training in the field
Developing and maintaining training materials
Administrative support for training at the Academy and in the field.
RPS' focus will be the redesign of the ATC curriculum and the development of new training materials.
Exhibit II-40 provides further examples of RPS’ current LBPO clients. Unfortunately, due to client confidentiality, client names cannot be disclosed. Exhibit II-40
Example LBPO Clients: Nov 2008
Start year
Global Fortune 500
Range Industry Services Geo Scope
Client Global Headquarters
2008 N/A Government All US US
2008 N/A Military Development UK UK
2007 100-150 Comms Admin Europe Finland
2006 450-500 Auto All AP China
2006 N/A Utilities All NA U.S.
2005 100-150 Pharma Admin Global U.S.
2003 100-150 Defense All NA U.S.
2002 1-20 Auto All AP U.S.
2002 150-200 Finance All Europe U.S.
2001 400-500 Auto All NA & AP Japan
1999 250-300 Defense All NA U.S.
1994 1-20 Auto All Global U.S. Source: RPS
Key: All = Learning admin, content, delivery and technology, Admin = Learning admin and technology
Pricing Pricing within RPS arrangements is based on:
Fixed price for program management
Delivery; per hour / day of training delivered
Content; hourly price for content developed
Administration; price per session administered.
Over the last few years, RPS has seen a move to minimize fixed costs, to providing more variable pricing to organizations, e.g. per transaction.
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Q RWD Technologies, LLC
RWD Technologies, LLC (RWD) is a leading provider of human and operational performance improvement solutions that help employers maximize the return on their investments in people, processes, technology, knowledge, and customers. Since 1988, RWD has helped thousands of clients globally to enhance organizational productivity through its broad range of integrated products and services. Based in Baltimore, Maryland, RWD is privately held, with over 1250 employees in the Americas, EMEA, and Asia Pacific.
Services offered include: Managed Learning Services
Strategic Consulting
Operational Performance
Technology Implementation and Integration
Enterprise Learning Solutions
Workforce Performance
RWD Technologies offers:
Integrated performance improvement services, technical training, operational assessments, lean training & consulting, lean engineering/process design, supplier development, safety & maintenance programs and documentation.
End user learning solutions, blended learning development and delivery, eLearning content design, and development, online training programs, learning program launch support, outsourced learning, organization change management, talent management, and electronic performance support systems.
Enterprise content management, integration of key back-end applications, hosting and help desk services, customer relationship management, and knowledge management solutions
This summary focuses on the outsourced learning services offered by RWD Technologies.
NelsonHall estimates that revenues from RWD Technologies were c. $210m in FY2008.
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Exhibit II-41 provides details of learning services revenues by geography for 2007 and 2008. Exhibit II-41
Learning Services Revenues by Geography: 2007 - 2008
Region FY08 Rev Share (%)
FY08 Revs ($m)
Growth (%)
FY07 Revs ($m)
FY07 Rev Share (%)
North America 75 129 6 122 91
Europe 15 26 247 8 6
South America 7 12 140 5 4
Asia 3 5 N/A 0 0
Total 100 172 28 135 100 NelsonHall Estimates, Nov 2008
Geographic revenue growth in FY2008 reflects the strategic drive to increase business from Asia and Europe within the next few years.
Exhibit II-42 provides details of learning services revenues by industry for 2007 and 2008. Exhibit II-42
Learning Services Revenues by Industry: 2007 - 2008
Industry FY08 Rev Share (%)
FY08 Revs ($m)
Growth (%)
FY07 Revs ($m)
FY07 Rev Share (%)
High Technology 60 103 2 101 75
Manufacturing 20 34 42 24 18
Energy 15 26 174 9 7
Healthcare 5 9 N/A 0 0
Total 100 172 28 135 100 NelsonHall Estimates, Nov 2008
Revenues for FY2007 in Learning BPO were c. $105m; with business splits similar for this business as for total learning services.
LBPO revenue estimates by learning tower are:
Learning Administration – 35%
Content Development – 30%
Learning Delivery – 25%
Technology Services – 10%.
RWD categorizes its learning BPO services as “Managed Learning Services”. These services are offered in conjunction with content design and development, and the company’s technology offerings (see later).
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Services offered within Managed Learning Services include:
Program assessment
Program design
Content development, including:
Training products / courses
Documentation
Performance support
Learning delivery, including
Instructor led training
eLearning
Administration, including:
Technology administration
Supplier management.
Exhibit II-43 provides examples of managed training learning services offered by RWD. Exhibit II-43
Managed Training Services: Sept 2008
Content Development and Trainng Delivery Documentation
Training Administration
Supplier Management
Develop Instructional Obj/Outcomes
Manuals Training Planning Develop Training Specification
Determine Delivery Media:
Wiring Diagrams Scheduling Develop Bid Packages
- Classroom Reference Guides Evaluation Review Quotes
- SOJT Training Manuals
Oversee Training Programs
- Train-the-Trainer Job Aids
- CBT/eLearning Quick Reference
- Job Aids Specification Charts
Create Training Programs
Deliver Training Programs
Source: RWD
The company estimates that c. 65% of delivery is managed through instructor-based courses
Key delivery statistics for the company include:
Number of training hours delivered – 2.6m hours
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Student days of training delivered – 325,000
Total number of employees served – 160,000.
The company estimates that c. 90% of services are delivered within a blended environment.
RWD has a number of proprietary software solutions for delivery of the company’s learning BPO offerings including:
RWD TOPS Dynamics; a simulation solution for the Energy industry
PlantMentor; online training, simulation and certification for plant operators and engineers
Lean Learning Academy; designed for executives, managers and supervisors to train in LEAN manufacturing operations
RWD uBenchmark; analysis tool enabling organizations to determine how employees are interacting with business applications globally. For example, the solution allows companies to track application usage down to the data entry level, as well as collecting and reporting performance data for all Microsoft Windows applications
RWD uEmulate; an interactive technology emulator for the SAP Store System, combined with a content delivery and performance support tool designed to enable organizations to train employees faster on SAP Store environments
RWD uPerform; a performance support solution enabling employees to collaboratively create, store and manage application simulations and procedural documentation to allow this information to be shared as required
RWD uPerform Express; a modified version of uPerform which allows storage and creation of documentation and simulations, but has no collaborative functionality
RWD Info Pak; an integrated suite of software that enables the development, organization, and distribution of documentation, training materials, and online help to allow the effective use of training materials within an organization
Hosted eLearning Courses; library of “off-the-shelf” ERP training courses, e.g. SAP Overview, SAP 4.6 Navigation, etc.
infoMaestro; enterprise content management suite
infoMaestro Knowledge onDemand; catalog of courses for life sciences companies covering the drug development cycle: from bench to patient
University360 Suite; eLearning software suite covering all aspects of eLearning including a learning management system, a mobile application, certification, collaboration, authoring tools, conferencing and hosting technology.
These solutions can be offered either within a hosted environment or behind the firewall.
RWD’s infoMaestro technology has been tailored to a number of specific industries to focus on their particular content requirements. Industries covered include:
Energy
Healthcare
Financial Services
Pharmaceuticals (Knowledge onDemand).
Telecommunications
NelsonHall perceives that technology development within RWD is likely to be focused on:
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Collaboration within uPerform, for example the continued development of wikis, blogs, and communities of practice
High fidelity simulations, where the company has perceived there is an increasing interest, particularly within simulations where the gamer has a specific mission and goal, e.g. for emergency response employees (firefighting, or emergency response within manufacturing/oil environments)
Exploration of application of virtual worlds in learning, e.g. within onboarding, and pushing content to individuals
RWD has a number of partners that it can call upon within Learning BPO relationships as suitable, providing consulting, learning services, or technology solutions. Partners include:
ERP; SAP, Oracle (in EMEA)
CSC, ,Capgemini EDS, Siemens, and Steria in EMEA
Development resources and IT services; KMSI in eLearning content development and management, TCS
NTIS in federal government.
Bersin & Associates (research and best practices)
BPT Partners
Documentum
Esource
EduPlan
Humentum Knowledge Advisors
Microtek NIIT Limited
Rapid LD
Richardson
Training Associates
TransPerfect TQG
RWD is headquartered in Baltimore, and has c. 1,300 employees, approximately 1,100 of these are focused on the provision of learning services. Current locations (as at Nov 2008) for LBPO delivery include:
Alabama
Atlanta
Cincinnati
Detroit
Houston
San Ramon
The delivery model for services at RWD is based on employees being primarily located at client sites, as RWD perceives that this enables them to understand client culture and requirements more effectively. Approximately 75% of employees are located onsite.
Estimated employees by learning tower include:
Learning Delivery – 400
Learning Content – 400
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Learning Administration – 200
Technology – 100
RWD explores offshoring on a regular basis, but the company has determined that in the short-to-medium term, RWD will not focus on the development of training administration resources offshore. The company partners with offshore content developers as required. Following the acquisition of The Learning Curve in 2006, the company has lower cost eLearning capabilities in New Zealand.
RWD is targeting multi-national organizations globally with c. 10,000+ employees.
The company targets a wide range of industries, but has had considerable success within manufacturing, in particular the automotive and pharmaceutical industries.
Geographically, the company targets all regions (see revenue splits earlier in this report), but is aggressively targeting expansion within Asia, Europe and the Middle East. In particular:
Europe, including:
United Kingdom
France
Germany (the company has an office here that serves Austria and Switzerland as well)
Nordics
Benelux
Eastern Europe, e.g. Russia and Kazakhstan where they have an office for the development of LBPO within the energy sector
Middle East: Dubai.
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Exhibit II-44 provides details of some of the company’s LBPO clients. Exhibit II-44
Example LBPO Clients: Nov 2008
Client Industry Services Provided (all include associated admin)
Contract Start Contract Duration
Manufacturing Content development, content management, content delivery learning logistics
2007 3 years
Manufacturing Training support Training development Training delivery
2007 14 months
Energy Corporate University &Training for plant operations, maintenance
2006 14 months
Aerospace Development & Delivery 2006 2 years
Energy Training for plant operations & maintenance
2005 4 years
Energy Training for Plant Operations 2004 5.5 years
Software Manufacturer
Custom End User Learning Solutions; content services, delivery, LMS
2000 7 years
Automotive Manufacturer
Technical Training Development & Delivery
1990 18 years
Source: RWD Technologies
Pricing within LBPO is based at a transaction level, e.g. number of learners, number of hours of content developed, etc. Average contract lengths are c. 3 – 5 years.
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R Xpertise
In July 2008, Xpertise made an offer for Parity Training. However, QA-IQ made an offer for Xpertise in August 2008, and on 22nd September, it was announced that this offer was unconditional.
The acquisition was backed by Englfield Capital, and is now completed forming a c. £85m learning business.
Xpertise is to be delisted from AIM and will become a private company within the QA-IQ group. Key executives within Xpertise are to take senior positions within the combined organization, and there is expected to be a significant focus on building the Learning BPO business in the future.
This report focuses on the learning BPO services offered by Xpertise as a standalone organization; an updated report is expected to be released on overall capabilities before Q1 2009.
Before the QA-IQ takeover, Xpertise was a managed training, and IT / soft skills provider based in the U.K. The company offered:
IT training within a number of topics, including C++, Citrix, Cisco, Microsoft, Oracle and RedHat
Professional skills training included accredited ITIL service management courses, and PRINCE2 project management training
Soft skills, such as personal development, management development, customer service training, soft skills for project managers, team development and graduate development programs
Managed training services; learning BPO services.
Exhibit II-45 provides revenues for Xpertise in FY 2007. The company year end is December 31st. Exhibit II-45
Revenue Share by Business: 2006 – 2007
Business FY07 Rev Share (%)
FY07 Revs ($m)
Growth (%)
FY06 Revs ($m)
FY06 Rev Share (%)
Training 55 24.6 13 21.8 68
- IT 34 15.1 18 12.8 40
- Professional 17 7.5 15 6.5 20
- Soft Skills 4 2.0 -17 2.4 8
Managed Learning Services (“Learning BPO”)
45 20.0 96 10.2 32
Total 100 44.6 39 32.0 100 Source: Xpertise
Revenue for the company’s managed training business was strong in FY 2007 due to
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$8m revenues from two new contracts signed at the beginning of 2007; one with a government organization, and the other with Computacenter, signed in January 2007
Further new contract signatures that contributed to revenues in FY 2007 from Experian and Sage.
Geographically, the company is focused on delivery of services for U.K. organizations. In FY 2007, c. 99% of revenues were generated through these organizations (some of the revenues were generated from the U.K. subsidiaries of multinational companies, e.g. Microsoft, EDS, etc.). The remaining revenues were generated from U.S. companies.
NelsonHall expected 25-30% growth for this business for FY 2008 before the QA-IQ acquisition. However, this growth may be tempered (reduced to 15-20%) by the acquisition which could lead to a more cautious approach to contract signatures in Q4 2008 to Q1 2009 until Xpertise’s BPO business is properly integrated with QA-IQ.
NelsonHall estimates that Learning BPO revenues by tower in FY 2007 were:
Content development – 4%, including eLearning and blended learning development
Delivery – 59%; including the company’s class-room based delivery services. This is inevitably the largest proportion of the company’s revenues as its this service which has launched the company’s wider BPO offerings
Administration – 4%
Consultancy – 2%
Other training products and services – 31%; this includes project management, communications programs, business transformation programs.
The company offers its learning BPO services through five different engagement approaches:
1. OnDemand Sourcing; Xpertise provides access to the company’s own training portfolio and that of training partners, as well as giving access for organizations to Xpertise’s learning portal (see later in the report) and offering administration around these services
2. Bespoke Programs; the company offers design of learning programs and delivers them through its partners and delivery centers; these services involve administration of selective functions, e.g. for those courses delivered by Xpertise, but is not typically across the whole of the learning function for an organization
3. Managed Services; traditional selective learning BPO relationships, including the management of administration and procurement of suppliers, as well as facilities and schedule management. Xpertise advise internal trainers within these relationships, any typically has onsite presence at the client
4. Full Outsource; traditional comprehensive outsourced learning BPO relationships. Xpertise manages the training team within the client organization, and the whole learning function is outsourced to the company
5. Strategic; includes the detailed examination of the learning function and how the services within the department need to be shaped to strengthen the function and tie learning to company strategy.
Specific learning offers within these five approaches include:
Supplier management
Learning support
Administration
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Systems
Service management
Consultancy.
Exhibit II-46 provides further details of these service offerings as pertaining to each of Xpertise’s approaches. Exhibit II-46
Learning BPO Service Offerings: Nov 2008
Key: √ = lowest volume of services provided, √√ = higher volume of services provided, √√√ = higher volume of services provided
Source: Xpertise
The company provides learning BPO to employees (85% of total FY 2007 revenues) and channel partners (15% of total revenues).
The company emphasizes its supplier management offering, Xpand, as a key differentiator. This offering includes:
Access to c. 150 suppliers and 1000’s of course titles
Continuity of service through delivery of programs using existing client preferred supplier lists
Ongoing supplier review program, incorporating quality and commercial review, and review of flexibility of service and delivery
Driving consistency of service across supplier base
Managing all associated commercial risks
Reducing the management and administration overheads for organizations.
Xpertise claims supplier management is a key part of the companies overall ability to reduce learning costs. Key elements of Xpertise’s cost reduction value proposition include:
Service Components Sourcing Bespoke Managed Outsourced Strategic
Supplier Management
Commercial management of suppliers
Evaluation and review of supplier base
Consolidating management reporting and invoicing
√√ √√ √√ √√√ √√√
Learning Support
TNA, assessment and evaluation
Bespoke and blended learning
eLearning and support tools
√√ √√ √√√ √√√
Administration Full delegate management Sourcing, scheduling,
booking and authorization Onsite administration and
resource optimization
√ √ √√ √√√ √√√
Systems Training administration Automated procurement
workflow Resource management
√ √ √√ √√√ √√√
Service Management
Project and program management
Ondemand resource model Service evaluation and
benchmarking
√ √√ √√√
Consultancy Strategic and corporate program design
Skills management Return on training investment
(RoTI)
√ √ √√√
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Supplier consolidation
Decreased classroom training delivery days
Better targeted learning spend
Reduced costs associated with administration and procurement.
Exhibit II-47 illustrates some examples of cost reductions achieved within Xpertise engagements. Exhibit II-47
Learning BPO Cost Reduction Results: Nov 2008
Client Industry Cost Reduction
Comments
LBPO (confidential)
30% in yr 1 Highly specialist curriculum
Non-discountable booking (i.e. conferences)
Savings calculated post sourcing charges
Previous client saving expectation was 15%
Software company
57% in 4months
Forward planning and effective service management
Bespoke and onsie delivery by Xpertise and Xpand partners
Reduced 3rd party supplier costs
Financial services company
39% in 1yr Bespoke and onsite delivery
Targeting learning programs
Consolidation of learning requirements Source: Xpertise
In order to target learning spend more effectively, Xpertise offers evaluation services to organizations through the solution, Metrics that Matter (MtM). Xpertise operates evaluation across the four different levels, according to the Kirkpatrick model, including
1. Post course evaluations; Xpertise uses MtM to evaluate all courses. Some questions are geared to assess initial potential job impact
2. Pre-and post course testing; utilized where appropriate to test course effectiveness
3. Three month post course survey of delegates and managers; these can be utilized to demonstrate on the job impact of learning. Bespoke questionnaires can be developed to assess effectiveness and relevance of training provided
4. Project based evaluations; Business goals and expected returns are defined in advance of the training delivery. Skills and job related questioning through pre-course assessment and post course testing can be combined with post course evaluations and management feedback to provide quantitative and qualitative data about whether goals and returns have been achieved.
Within FY 2007, Xpertise:
Provided over 90,000 student days of training, of which a number were delivered by Xpertise themselves
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Managed c. 36,000 delegates attending Xpertise learning events.
The company has a number of partners for the provision of technology services within its BPO offerings. These include:
C4 and Coursebooker, the core learning system
Enterprise Study; a partnership with this company gives Xpertise access to Enterprise Study’s learning portal and procurement network. This provides a single access to a range of courses offered across different (see below)
Livemeeting (Microsoft) and Webex (Cisco); for distance learning.
Metrics that Matter from KnowledgeAdvisors; for analytics and evaluations
Infobasis; for skills analysis and building competency frameworks
Articulate and Captivate; eLearning tools.
The Enterprise Study partnership is core to the Xpertise business enabling access to critical technologies required for managing LBPO relationships. Solutions offered by Enterprise Study include:
Enterprise Study Platform (for administration), which operates through a standard browser interface and enables organizations to both manage training administration for managing a training product as well as acting as an interface to purchase training products. Functionality includes:
Resource management, including diary management for instructors and an integrated resource diary, offering a complete view of all events and resource requirements
Scheduling; such as course league tables, run rates, fill rates and the cost of running events
Booking management; including wait list management, transfers an cancellations and real-time bookings
Auditing and reporting
Customer relationship management
Evaluation and measure capabilities; interfaced to Metrics that Matter
LMS (featuring SCORM, and AICC compliance)
Finance capabilities.
Enterprise Study Network (for procurement), which offers an infrastructure for the learning industry to collaborate to provide an integrated learning product to the customer, managed by the lead supplier (whom an LBPO contract is with). Product information is uploaded by providers to the network once and is then available to customers through the LBPO supplier.
The network enables the LBPO supplier to:
Configures each offering (of courses) for each organization
Set up different offerings for different organization
Upload information once for all providers and organizations
Automatically make changes to schedules and bookings through exchanges between systems.
Xpertise expects technology developments to focus on the enhancement of the Enterprise Study Platform including improvements within resource management and project management functionality.
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Xpertise has c. 130 employees focused on the provision of its services; c. 35 of these are delivering BPO to organizations.
The majority of these employees are based on client sites. Xpertise expects to continue to use this model in the long term. The company perceives a need to be onsite to develop appropriate subject matter expertise and knowledge of that particular client in order to deliver courses appropriate for client need and culture.
In addition to these employees, the company has six delivery locations in the U.K.:
London
Thames Valley
Leeds
Manchester
East Midlands
Tyne & Wear.
Xpertise has 37 full-time instructors and 100 associates available across the U.K.
The company does not expect to utilize offshore for administrative delivery in the short-to-medium term as a key differentiator for the company is its emphasis on deploying onsite at LBPO clients. However, the company is exploring the use of partners for content development within India.
Targeting within Xpertise is based on:
Significant learning and development budget, typically more than £1m per annum
Wide range of industries, but the company has had significant success within:
Banking
Systems Integrators (consultancies/professional services); which will be a key focus for the organization over the next 12-18 months.
Requirements for training delivery in the U.K., which Xpertise’s training capability can fulfil.
Learning BPO clients include organizations from the following industries:
Global Professional Services
Financial Services (8)
Banking (4)
Insurance (2)
Other Financial Services (2)
IT services organizations (3)
Retail
Software (2)
Telecommunication services
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Exhibit II-48 provides further details of some of these contracts.
Exhibit II-48 Example LBPO Clients: As at Nov 2008
Client Name Tech Suppl Del Cons Cont Admin Blend?
UK Govt √ √ √ √ √ √ √
Telecoms √ √ √ √ √ √
IT Services (1) √ √ √ √
Software √ √ √
IT Services (2) √ √ √ √ √
Software (2) √ √ √ √ √ √
Financial Serv √ √ √ √ √ √
Banking √ √ √
IT Services (3) √ √ √ √ √ √
Insurance √ √ √ Source: Xpertise Key; Tech = learning technology provision and / or support, Suppl = supplier management, Del = some courses delivered directly by Xpertise, Cons = learning consultancy, Cont = content development, Admin = learning and delivery administration, blend = development of blended learning environment
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