Outsourcing and Offshoring Your eLearning Development

Bruce Gabor, PMPManager, Learning Projects and Solutions Global Tax Human Resources, KPMG International

Adrian Celentano, PMPHead of Learning and Development, Performance and TechnologyGlobal Advisory Group, KPMG International

In this session you will learn:

• About the myths and misconceptions of using offshoring

• Current industry trends related to offshoring development

• What must be taken into account when you are considering an offshore provider

• Methodologies and approaches to managing offshore development

• How to make the business case for or against offshore development

Session ObjectivesWelcome

Starter QuestionsWelcome

1. How many people are currently offshoring their learning development?

2. How many people are giving serious consideration to offshoring their learning development?

3. If you are considering offshoring your development... why?

What is Offshoring?Welcome

You are here

Your workis here...

Or here...

Or here

You and your work may not be on the same continent. Or even in the same hemisphere

Expected outcomes of offshoring your learning development:

• It’s cheaper

• It’s faster

• It’s easier

• Quality is better

Placeholder ThoughtsWelcome

Industry Trends

Top 5 and Next 5 Offshore NationsIndustry Trends

6. Canada 7. Russia 8. Mexico 9. Vietnam 10. Poland

1. India 2. The Philippines 3. China 4. Ireland 5. Brazil

Top 8 Global Outsourcing CitiesIndustry Trends

1.Bangalore, India

2.Delhi, India

3.Mumbai, India

4.Manila, The Philippines

5.Dublin, Ireland

6.Chennai, India

7.Hyderabad, India

8.Pune, India

2009 Global Services-Tholons

Current TrendsIndustry Trends

Where are we now?

• Training offshoring and outsourcing is about leveraging skills and capabilities

• Training offshoring deals are getting smaller

• Administration and content development are the most common processes offshored

• Standalone training offshoring deals are the norm

2010 Facts and FiguresIndustry Trends

Of the companies surveyed, what percentage chose to outsource individual parts of their learning function rather than the entire function? 97%

What were the most frequently outsourced learning activities? Training Delivery 41%

Content Design 38%

Which practitioners were most likely to use outsourcing? Government 69%

Financial Services 56%Manufacturing 52%

Education 35%2010 Chief Learning Officer report: Focus on Outsourcing

Spending TrendsIndustry Trends

What percentage of budgets do learning organizations spend on outsourcing? 2009 26.4%

2010 23.5%

Will outsourcing spend remain the same in 2011?

Decrease 20%Remain the same 43%

Increase 37%

2010 Chief Learning Officer report: Focus on Outsourcing

Future TrendsIndustry Trends

Where are we going?

• Multi-sourcing - using more than one offshore provider

• Renegotiation is a standard operating procedure

• Death of the mega deals

• Offshoring to US? (declining dollar)

• Increased offshoring by local and state governments

2010 cio.com: Outsourcing Trends to Watch in 2010*2010 clomedia.com: When, Why and What to Outsource

Offshoring in IndiaIndustry Trends

Is there a future in offshoring in India? It depends upon who you’re talking to.

• “Wages are on the rise”

According to Forbes.com cost advantage used to be 1:6. Today it is estimated at 1:3. Expected to be 0 by 2015

• “Where is the expertise?”

General thought, India executes services and does not invent its own products

• “Availability of skills”

The greater demand for workers will dilute the talent pool

• “It’s more difficult than it’s worth”

Communication problems and cultural differences will hinder development

Real World Challenges

OverviewReal World Challenges

Many challenges with offshore development can be broken down into 3 main areas:

• Operations

• Delivery

• Engagement

When thinking operations, consider:

• Time zone

• Critical response approach

• Purchasing/procurement policies

• IP ownership

• Tax implications

• Fluctuating payment currency

ConsiderationsReal World Challenges

When thinking delivery, consider:

• Project management processes and methodology

• Standards definitions

• Concept and requirements definitions

When thinking engagement, consider:

• Privacy of information protection

• Your offshoring partner sub contracting to other vendors

ConsiderationsReal World Challenges

Consider:

• Developing evaluation criteria

• Their expertise in development and content creation (resources and experience)

• Scalability - the ability to handle required development volume

• Business sustainability

• Business history

• Identifying technology standards

• Running a pilot - how do they manage their projects?

Picking an Offshore PartnerReal World Challenges

Managing Offshore Developments

Project Management ProcessesManaging Offshore Developments

You need good project management processes for:

• Setting expectations and clarity

• Escalations

• Contracts

• Managing the project manager

• Maintenance and warranty support

• Communication of scope

Cultural DiversityManaging Offshore Developments

One of the largest challenges with offshore development is cultural differences.

• Understand the culture of your offshore team- Acceptable vs offensive actions- Humour

• Culture vs work culture

• Language barriers

CommunicationsManaging Offshore Developments

Clear and effective communication will make or break a project.

• Identify communication lines before you begin

• Ensure your are working with a strong team leader- Single point of contact- Responsible for all updates and reports- Mitigate the risk of miscommunication

• Take nothing for granted- Explain... listen... explain... listen, verify understanding

Building RelationshipsManaging Offshore Developments

How do you build a strong, trusting, relationship that will survive reduced budgets, compressed timelines and scope creep?

• Giving respect commands respect

• Work as a single team

• Know all team members and praise accordingly

• Celebrate landmarks together

Building a Business Case

Let’s revisit those initial thoughts. Offshoring your learning development is:

• Cheaper

• Faster

• Easier

• Better quality

Placeholder ThoughtsBuilding a Business Case

Yes, there are potential rate card/project fee advantages.

Often it is. Yet there may be a high risk to quality and time zone differences may increase project timelines.

Not always. Project managing over a distance requires a higher degree of discipline and organization.

Not always. Vendor quality is generally independent of geography.

Typically, cost savings are the biggest factor that drives the business case.

But also consider:

• Your organization’s project management cost

• The risk of delivering a successful project on time/on budget

• The risk of delivering a quality product

• Maintenance and support

• Impact on internal resources

Driving Your Business CaseBuilding a Business Case

5 Key elements of developing an offshore business case:

• A scenario analysis must be conducted

• Establish a clear link between each benefit “cause” and “effect”

• Identify the operational performance indicator (OPI) for each benefit

• Risk of no investment

• Align the business case with the company’s strategic goals

2008 Glomark-Governan: Five Key Elements to Include in a Compelling Outsourcing Business Case

Create a Compelling Business CaseBuilding a Business Case

Q & A

Bruce Gabor, PMP

Adrian Celentano, PMP

http://www.slideshare.net/devlearn10/offshoring-devlearn10