Category Scan: Learning and Development

Sourcing Models

Challenges in Implementation

Decision Enablers

In-house L&D team

L&D is a technology-driven segment and does not provide much cost savings by operating In-house.

Currently not adopted by many international buyers.

Cost involved in technology deployment and dedicated human resources to track the training programs would involve direct and indirect costs to the buyer.

Single services outsourcing

Duplication of costs (e.g., same training is commissioned several times by different parts of the organization).

This model is preferred if there is any specific training requirement, like language training. Local engagements are observed in the emerging markets.

Bundled services outsourcing

Should adopt a service provider who is competent in all of the services procured from them.

Widely preferred model by medium and large-sized buyers to achieve a balance between cost and quality.

Service-based outsourcing to multiple suppliers

There is a level of uncertainty in the quality and inconsistency of services delivered across different regions.

Widely preferred model by medium and large-sized buyers to achieve cost savings by negotiating with multiple suppliers in different parts.

End-to-end outsourcing to managed service provider

Buyers’ risk is low. In-depth analysis and a training requirement briefing should be effective.

Emerging sourcing model, where the involvement of buyers is less and cost saving opportunities are high with training quality consistencies.

Single Sourcing

• Specialized service quality can be obtained

• Less implementation risk

• Does not serve the ultimate goal of consolidation when it is done on a local or sub-regional level

• Less cost savings possible

Bundled Sourcing

• Guaranteed high-quality work for critical services

• Fewer number of supplier contacts

• Less overhead in administration of service providers

• More time required to identify players that can provide the best quality service for each business division

Regional Integrated Sourcing

• Specialized service providers who have strong presence in each region can be engaged

• Fewer number of supplier contacts and less overhead in administration of service providers compared to the buyer

• More time required to identify players that can provide the best quality service for each business division

Global Integrated Sourcing

• Single point of contact with the service provider

• Similar service quality across all global facilities

• Less administration overheads

• Companies with federated or decentralized governance structures would find it difficult to adopt global sourcing

• Centralized governance structure would benefit from global sourcing as the training budget is centralized