Need for centralization

Outsourcing proves to be highly cost efficient because it can help an organization centralize and consolidate key learning functions, such as learning facility administration, class rosters and registrations, LMS integration, and content development and management. These functions, often called shared services, tend to be used by multiple units throughout the enterprise.

When organizations have a decentralized learning set-up– that is, when business units autonomously manage learning — these functions are often duplicated. For instance, various business units would likely have their own learning administrative staffs, handle their own class registrations and reports. The positive side of a decentralized approach to training is that business units have complete control over employee learning and can customize all aspects of learning to the specific needs of their employees.

The downside of decentralization is that it is rife with inefficiencies. Technology purchases are duplicated and staffing is often redundant. Integration efforts can be lengthier and more costly because of a lack of standardization. When a learning BPO service provider initially obtains a company’s business, the typical first response is to centralize as many commonly used functions as possible in order to eliminate duplication of tasks. This does usually result in immediate cost savings but it does not account for the need for different business processes.