Training Process Outsourcing for SME/SMB: Why and What - A White Paper

Training Process Outsourcing (TPO) is one of the fastest growing areas in the HR Value Chain, wherein more and more companies are seeking the services of specialized service providers to manage their Training Process.

2. Contents
Introduction ................................................................................................ 3
Understanding the Talent Build process & Training Value Chain………. ..... 5
Why TPO ..................................................................................................... 8
What is TPO& What are the Key Elements of TPO ............................. 11
Role of Technology in TPO ........................................................................ 14
What to look for in a TPO Partner ............................................................ 16
About UniTol Training Solutions ......................................................... 18
About the Author ...................................................................................... 19
References













UniTol Training Solutions Pvt Ltd
Secunderabad, INDIA
e-mail·[email protected]
visit·www .UniTol.in




© 2020 by UniTiol Training Solutions Pvt Ltd.
All rights reserved .

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Introduction
SME or Small and Medium Enterprises (also known as SMBs: Small and
Medium Businesses) constitute the back bone of most of the economies
of the world. If the Micro segment of enterprises is also included, then
close to 99% of the organizations in the world fall under the MSME
segment.


Fig 1: Enterprises by Size (Source: IFC- The SME Banking Knowledge Guide)

While the extent of contribution of SMEs to the overall GDP varies
across countries, it should suffice to say that they play a crucial role,
not just in terms of Economic activity but also employment creation.


…they face challenges

SMEs across the world, face a number of challenges, which include

• Access to Capital (project and working capital)
• Access to People (ability to attract and retain the best of the
talent)

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• Digital & Information Technology Capabilities
• Problems with Supply Chain Management

While all these pose difficulties for SME to scale and grow, the one
problem they have to effectively deal with against their bigger
competition is that of Talent.


….the Battle for Talent
Considering the increasing cost of quality talent and the inherent proclivity
of talent from premium institutes and the like joining larger companies, SME
have fewer or little options with regards BUYING of talent. The other option
which they have to deploy is to BUILD the talent – that is strategies and
tactics which will enable them to upskill the talent within the ranks so as to
make them world-class.


The Challenges for the BUILD talent option
Is the Option of Building Talent easy for the SME Organizations? What
Challenges do they face in effectively executing these strategies and
associated plans? How can cost-effective methods be adopted which will
ensure that they are able to derive the required results with the budgets
they allocate (for this purpose)?




This White Paper will help you to understand how
SME can overcome these challenges

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Talent-Build Process & Training Value Chain
Like in the case of Purchase process, where often Purchase Managers
have to make the Make or Buy Decisions, the CEOs and/or the promoters
of SMEs have similar decisions on the Build or Buy with regards Talent.
However, when it comes to people and talent development - the Build
versus Buy is more complex. For instance, let us look at the primary
consideration in such a situation, which is the cost. While at some of the
instances, the Organization make the conscious choice of “buying” talent
from the market incurring the cost, they may find the result not
necessarily to their liking, simply because the talent did not fit the culture
of the organization.
SME organizations usually have unique signature culture about them and
for new talent to fit into it, especially at senior decision-making levels,
many a times is a challenge. It therefore, augurs well for the organization,
from the cost as well as cultural fitment perspective to develop the talent
from within.

.
f

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Training Value Chain
Before answering the question of build and how the build needs to happen,
it is important to understand the Training Value Chain. Any Value chain can
be described as a the logical set of activities which are performed in a
process – taking an input and converting it into an output, by systematically
adding value at each point of the flow.











Fig 2. Training Value Chain

While larger organizations are able to systematically focus on all the
aspects of the Training Value chain and thus derive the benefits of the
investment in Training, the same may not necessarily be true with regards
SME/SMB. Reasons abound, which we will discuss in the ensuing sections;
but suffice it is to state that without the due emphasis on each of these
elements, the results from the Training process are seldom achieved.

Now this brings us to the question, “what has this got to do with the
Talent Build Process?”




Training
Planning (TNA)
Program Design Program
Execution
Post Program
Support
“Training Value Chain, is a construct of activities from planning to
evaluation part – of the Training Process”

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Talent Build – Understanding the process

The ability to build talent is a function of one, the talent itself and two, the
process used. As mentioned, in the case of SME/SBM, there is a need to
focus on both these aspects. However, availability and quality of talent is,
to a great extent, externally dictated and therefore leaves relatively lesser
room to maneuver with. It is the process that is within the organizational
ambit for improvement. It is the attempt of this paper to look at this and
how to ensure it can be done most efficiently.

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Why Training Process Outsourcing?
This brings us to the second question, why Training Process Outsourcing?
Agreed that there is a need to focus systematically on the Training
Processes, but is there a need to outsource the same? In order to
understand and answer this question, it is important to understand the
atypical structure in SME/SMB organizations with respect to Human
Capital Management aka HR.
Faced with constraints in attracting talent (across areas, more so in the
support functions such as HR) and also cost pressure, most (if not all)
SME/SMB atypically have the HR and Administration manned by the same
person. The R&R (Roles and Responsibilities) of this person, would
typically entail the following

As can be seen, the HR person, has to handle all the aspects of the HR
value chain, and more. And depending on the organization, the focus for
the person to a greater extent may be on one of the areas. For example, in
the IT industry, the person may have to focus on Recruitment, while in a
typically manufacturing company the focus may be on Compliance.



• Payroll and Benefits Management
• Recruitment
• Compliance
• General Administration (canteen, employee movement, security
etc)
• Performance Management
• Training and Development
• + Other peripheral activities (including PR, Liaison, Assistance to
CEO/Owner etc) – all depending on the org. and culture

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….Last on the Radar Screen
It is obvious that considering the various operational pressures, the person
manning the HR position would have to relegate the Training process to the
last orbits. The consequence of this is that, the process of training is
executed, albeit, with little or no attention paid to the various design and
planning elements. This in turn, would mean that the objectives of the entire
training process are achieved. In summary,
• Monies are spent on training – with no planning or thought
• People don’t get trained in what is required
• Organizational skill matrix remains below the required datum level
• Finally, there business does not get any ROI on its training spends

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Training Process Outsourcing - TPO
Therefore, in order for organizations to derive the required benefits for the
investments made by it, first in terms of monies spent and second in terms
of the CxO level time & energy, it becomes pertinent to look at alternate
methods of achieving these objectives. Also, it has be noted that, the cost-
of-lost opportunity in terms of not building and having the required talent
pool within the organization can prove to be, almost disastrous.

One of the alternate methods that is available for organizations in this
aspect is Out Sourcing of Training, also known as Learning Outsourcing.

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What is TPO ….
Training Process Outsourcing (TPO) is the outsourcing the complete
set of activities, across the Training Value Chain, to specialized firms,
so as to optimize costs, enhance available internal bandwidth, while
improving business returns.
Like in the case of other Business Process Outsourcing, TPO also is
rapidly gaining in popularity, especially in the SME/SMB segments.
Factors that are driving this growth (refer to Fig 2) include not only
the tangible cost dimension, but also intangibles such as alignment
with Corporate Strategy. Specialized service providers, it is felt will
be able to facilitate the alignment of the learning strategy and plans
with that of organization strategy and business goals. As will be
explored in the later sections of this report, the internal L&D teams or
HR that doubles-up for this are handicapped in as much that they are
constrained by having to shuffle between operational and tactical
aspects, leaving very little room for strategic alignment (of L&D).



Fig 2. Reasons for Organizations to Opt for TPO
1



1
The Dramatic Global Growth of TPO, The Learning Factor
0%5%10%15%20%25%30%35%40%45%
Other Reasons
Training is not Company's Core Competency
Increase Company's Competitiveness
Increase speed to Market
Reduce Costs
Better Alignment with Corp. Strategy
Reasons for Org. Opting for TPO

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Key Elements of TPO

The elements of the Training Value Chain can be broken down along
three major categories of Strategic, Tactical and Operational aspects. The
broad level constituents of each of these elements include

















Fig 3. Trifurcation of Training Value Chain Elements


Strategic: Strategic aspect of Training includes the Training Vision for the
organization. The cliched aspect apart, the Training Vision is important in
order to align all the learning processes to that of the Organizational Vision
and Objectives. The process of establishing the Learning Vision, and
subsequently the Learning Objectives will ensure that the activities carried out
along the Training Value chain enable achievement of the business goals.
Most of the SME/SMB usually neglect this part of the Training, and therefore
find the subsequent processes not yielding the required results.
Tactical
Strategic
Operational

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Tactical: In order to ensure that the Learning Strategy is effectively executed,
it is necessary to have the right processes in place. The tactical aspects of the
Training process are meant to define these processes, across the Training
Value Chain. For instance, many companies do not have the right Training
Needs Identification process in place, consequent to which all the other
derived steps (such as program design) are ill-conceived. Specialized Training
Process Outsourcing partners will help in defining these processes, consistent
with the organizational requirements.


Operational: Training execution requires the orchestration of a number of
small, yet critical items of work. Most SME/SBM organization’s bandwidth in
managing training internally, is choked because of this. And faced with
paucity of time and bandwidth, the organizations tend to manage these, not
so efficiently. This in turn has impact on not only the cost, more importantly
on the entire training outcome itself. A case in point, could be the Trainer
Identification for a particular Training program. In the absence of proper
structured Training Need for that program, the design of the program would
either have been incomplete or not done at all. To top this, the internal team
would not have the required time to identify the appropriate trainer for this
requirement. The compounded effect, of not having a proper design for the
program, along with Trainer who is not rightly chosen, will mean that the
entire spend on the intervention is almost wasted.


A TPO partner which, through its specialized service capabilities will be able to
manage the Strategic, Tactical and Operational aspects effectively and
efficiently.

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Role of Technology in TPO

Over the years, the use of technology has significantly increased in the Training
Space. While the initial usage was in mundane data collection and tabulating,
this slowly started expanding. The watershed movement was when E-Learning
was introduced in a big way in the 80-90’s. The adaptation of technology
continued, with gamification and mobile learning. Today, companies are using
AI and ML – chat bots, virtual reality, visual bots, etc, to drive training in
organizations.

It is now no longer a luxury to have technology enablement of Training, but
more of a necessity. However, in general parlance, technology in the case of
Training, is understood as being synonymous with LMS or Learning
Management System. This is partly true and partly not true. What
organizations need for efficient management of the Training process is a
Training Management System or a TMS.

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Training Management System (TMS)

Organizations, as they increase their focus on people development, would
need to have robust, comprehensive, scalable, contemporary technology
platforms which will help them manage the entire Training Process. As
shown in Figure 4, a typical TMS manages the Planning, Execution and
Monitoring aspects of the Training process. Also, the TMS should be able to
seamlessly integrate with other systems, HRIS & ERP to enable data
consistency and comprehensive reporting




Fig 4. TMS vs LMS – The Essential Differences


A TMS not only facilitates the learning process (through its LMS components), but also
helps the management through decision enabling analytics. A good TMS must be able
to provide the top management with important data, information and analysis
regarding
• Costs of Training – not merely the total costs, but also elemental level details
• Monitor the learning of employees
• Review the business case/ROI on the training process.

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What to look for in a TPO Partner
Training Process is like any other critical organizational process, which
as mentioned earlier, is being seriously considered for outsourcing. The
factors, for choosing a TPO partner would, therefore be along similar
lines and would include

Credibility
Does the partner company have the required credibility for providing similar
services? Are there referral customers who will be able to vouch for the TPO
partners’ capability to deliver the required services.


Experience
For how long has the service provider been providing equivalent or similar
services? It has to be noted that in recent times, a number of Learning
Consultants have been making the migration to providing holistic services to
organization (especially SME/SMB). With other capabilities and infrastructure,
they would also be ideal partners for those companies seeking, good quality,
value-for-money TPO solution/services.

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Process Rigor
Process rigor is very important for any outsourcing projects, and the same holds
good for TPO as well. A partner who has well established, Standard Operating
Procedures (SOPs) is a quintessential requirement for the TPO agreement. Also, a
demonstrated process maturity i.e.; process improvement over a period of time,
establishes the partner’s capability to internalize and apply learnings from
different engagements and projects.

IT Platform
One of the key considerations (if not the primary consideration) for going in for a
TPO is to ensure that the client (SME/SMB) does not have to invest in technology
infrastructure and its updation/upgradation. So, it is necessary for the TPO
partner to have a robust IT platform which enables them to plan, manage,
enable (learning) and also provide required analytics and TMIS (Training
Management Information System) to the client.

Other Support Systems
Training planning and execution has a number of smaller, yet important aspects
to it. For example, the ability to quickly source Trainers for say a niche area
would be critical if the client is planning to roll out a up-skilling in a particular
area. Likewise, to manage costs more efficiently, it would be necessary for the
partner to have access or information on training infrastructure which would
enable them to provide multiple options. Apart from these, partners who could
help in content development, e-learning & mobile learning enablement, as well
as gamification and other newer areas, would always help in deriving greater
value from the outsourcing process.

The process of Outsourcing is a strategic one, and due care has to be taken
in selecting the partner and ensuring that a win-win relationship is
established.

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.

About UniTol Training Solutions

UniTol Training Solutions is a products, tools, platforms and services
company serving the needs of the Supply and Demand side of Corporate
Training.

Our Training Management System, www.L-Kurve.com is one of the most
comprehensive platforms which enables manage all the workflows related
to Training. It is platform which supports the learning of over 30,000
employees in some of the leading organizations in the country, including
that of Govt.

UniTol is also the largest aggregator of Trainers and Training Venues. We
have the largest database of Trainers, across various functional, technical
and behavioral areas. Our Training Infra division helps organizations in
identifying cost effective training venues to meet their varied requirements,
across geographies.

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About the Author

Rathna Teja works in the Content & Research Dept. of UniTol Training Solutions.
With thirteen years of Industry experience, Rathna helps organizations in various
aspects of their Training Processes.

She works closely with Clients to help them define and configure their Training Process
Outsourcing, by customizing the IT platforms, defining the SOPs and identifying the
partners; internal and external to work with the client systems.

She can be reached at [email protected]

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References
1: Training Industry Report, by Training Magazine, www.TrainingMag.com.There are
yearly industry reports, which detail out the spend patterns in US Companies, including
outsourcing (can be appropriately extrapolated/intrapolated to other country
scenarios). Please refer to the latest industry report https://trainingmag.com/trgmag-
article/2019-training-industry-report

2:Training Industry, https://trainingindustry.com is a leading provider of information
on various aspects of Training Industry. They publish a list of Industry leaders in various
aspects of Training, including TPO. Their list can be accessed
https://trainingindustry.com/top-training-companies/outsourcing/2019-top-training-
outsourcing-companies/

3: Deloitte, the consulting firm has published a exhaustive guide on Outsourcing. This
guide covers the general principles for any outsourcing process. This can be accessed
at https://www.deloitte.co.uk/makeconnections/assets/pdf/the-outsourcing-
handbook-a-guide-to-outsourcing.pdf