Outsourcing the Corporate LMS - Good cost savings effort or a deadly mistake?

Ah yes, the good old 'outsource the services' effort to limit fixed costs. Nice idea, a nice thought really. On the surface it seems just as cut-and-dried as outsourcing your marketing or Human Resources. Surely a simple web application does not warrant its own dedicated in-house resource, right? Or not?

This is going to be a topic I will delve into deeper and deeper over the long term, but at least for now I'll give you my brief slice. I will say I do understand the effort to move to outsourcing for clearly delineated corporate services for the sake of cost cutting; it makes sense. Anything that does not degrade your firm's integrity and subtract from your ability to excel within your core competency should be considered fair game for the cutting. It makes good sense for things like marketing, payroll, and accounting [in some cases] to be passed on to dedicated outside resources. Running your corporate LMS is likewise a service being provided which is easily modularized and segregated.

Be wary, though, as there are some serious unknowns to be considered before making this move. Having at least one in-house resource intimately familiar with the ins and outs of your Learning Management System is going to serve as an asset in the way of conservation of resources. Sure, you can use an outside firm to run or host the e-Learning content, but watch out for firms which count on offshore resources or limit dedicated expertise. Many corporations are moving this way, inline with the tide of general HR outsourcing, but e-Learning is an IT asset which means there may be more to it than meets the eye.

Consider LMS debugging [sometimes a major time sink] when outsourcing completely to an offshore firm. Keep in mind the need for an [at least part time] internal expert who can serve as a watchdog for courseware testing and deployment. An arrangement where you are charged specifically for testing and verification access to the environment is simply unacceptable. If you are handing over hosting and administration completely, you are also handing over relevant technical communication with your courseware vendors. It may not be terribly efficient to hook up your vendor, offshore LMS firm, and your training manager in a courseware development task. This is especially risky when offshore folks are the only ones with intimate knowledge of your environment. No one outside your organization is going to have the same desire to ensure adherence to schedule and budget you'd like to see within your walls. Even if you have the aforementioned watchdog keeping an eye on the situation, undue delay and inefficiencies inherent in this type of arrangement are going to have a serious effect on the potency of your training organization.

I'm not saying never outsource your LMS, plenty of LMS's have used a hosted model for smaller firms for years. What I am saying is keep an eagle eye on the situation for a good solid introductory period to make sure things are working out once a courseware vendor approaches delivery.

More to come on this topic to be sure but in the meantime I welcome your comments.