Outsourcing Increase in 2010?

Companies Outsource Some Important Activities
It seems common to assume that organizations use external providers to help with those parts of their business that are less important. However, with training outsourcing, core activities are outsourced in some cases and noncore activities are outsourced in others. The activities that CLOs identify as most important include both custom content design and development and training delivery. Also important is strategy development, with program oversight, learning technology management, and reporting and measurement following with about equal importance.

In an effort to determine if highly important or less important training functions are the ones chosen for outsourcing, Figure 4 compares the importance of training functions against the training functions most frequently outsourced. There appears to be a correlation between the importance of the activity and activities outsourced for the three areas of custom content, training delivery and LMS. However, those training functions that are highly important but require the transfer of management responsibilities to execute, such as strategy development, program oversight and reporting and measurement, show low popularity for outsourcing. It seems that companies are using external training providers primarily for activities that are important but do not require the transfer of management authority.

Accessing Expertise and More Resources Main Reasons to Outsource
The top three reasons to outsource, by a clear majority of companies, are to gain access to better training expertise, reduce costs and provide flexible capacity in delivering training. These reasons remain consistent from last year. Not surprisingly, reducing costs has actually become more important to enterprises. As recently as 2007, speed to market was a significant rationale for using external providers. However, over the past several years, speed to market has dropped from an important reason to an also-ran. The increased importance of reducing costs and the declining influence of speed to market appear tied to the current economic situation as organizations seek to hunker down more often than pursue new opportunities.