Magazine article Training & Development

Outsourcing, Insourcing, and In-Between Sourcing

Magazine article Training & Development

Outsourcing, Insourcing, and In-Between Sourcing

Article excerpt

A guide to partnerships, alliances, and other creative sourcing solutions.

"Outsourcing loses stigma," reads a headline in Computerworld, an issue of Training reports on "the great outsourcing stampede that never happened," and "outsourcing reversal seen" declares Corporate University Review. Yet, 42 percent of organizations responding to the 1997 Human Performance Practices Survey, conducted by the American Society for Training & Development, indicate more spending on outsourcing from 1996 to 1997 than from 1995 to 1996. Outsourcing is listed among eight vital knowledge areas for CEOs by Fortune. Expenditures on outsourcing of all types are expected to reach $318 billion by the year 2001, according to the Outsourcing Institute.

Whatever the case at your organization, chances are you've spent some time thinking about outsourcing recently, or will soon, and outsourcing will have an impact on your professional life. In a report issued by the Conference Board of Canada, author Dave McIntyre says, "Many firms are questioning the value of having a fully staffed, permanent training function that costs a company during every minute of every day. Ideally, an outsourced training function costs only when it is used."

Outsourcing provides a new opportunity for in-house trainers: selecting, supervising, and evaluating vendors. With this shift in focus, it's important to maintain competencies to make sure vendors are performing as expected.

"Increased outsourcing activity fits with the changing role of many training professionals," says Mcintyre. "Today's corporate training professionals are acting more as brokers of internal and external training talent and expertise. Outsourcing is forcing them to reinvent their roles in a way that maximizes their contribution to the organization."

Savvy trainers in these downsized times also look for creative ways to satisfy training needs other than the traditional outsourcing client-vendor relationship. New terms are cropping up all over: insourcing, co-sourcing, share-sourcing, and strategic sourcing. Many of these solutions rely on partnerships or alliances rather than simple contractual agreements. In these mutually beneficial relationships, one and one add up to more than two.

What is an alliance? Well, according to Jordan D. Lewis, author of two books on business alliances, "The only thing we can be sure of when someone uses the term alliance or partnering is that we can't be sure what they mean. Those terms are used as new labels on traditional relationships, to describe acquisitions, or in many other ways without consistent meaning." Lewis made these remarks during his keynote address at the Outsourcing, Insourcing, and Shared Services Conference held in San Diego recently. He went on to say, "I use the term alliance to mean cooperation between organizations that produces better results than is possible in an arms'-length transaction. It is not enough to call each other partners and expect more together. To get superior results, you must behave as partners." Organizations are forming partnerships and alliances with each other, with colleges and universities, and with suppliers to satisfy training needs while positively affecting the bottom line. Here, we describe four such alliances.

Be true to your school

American University in Washington, D.C., wants to play a part in ending the IT labor shortage. The university also wants to increase its presence among the many national and multinational corporations relocating to or opening branch offices in the U.S. capital. The university wants its graduates to get good jobs. The university also wants to make money.

Enter Patrick F. Valentine, director, corporate and government education and training and American University's new TurnKey Technical Training program, initiated in January 1998. The program aims to help solve the IT shortage by maximizing one of the D.C. area's greatest resources: undergraduate and graduate students receiving degrees in nontechnical disciplines. …

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