Being an Intelligent Purchasers is like being street aware – but in this instance our 'street' is the world of training and consultancy. A world where there are a lot of organizations that want our money and will more often than not do what it takes to get our contract.
We need to learn to ask the right questions.
To listen for the tell tail signs that we are being told what we want to hear.
We need to be contract savvy – and not take the first offer on the table.
More importantly we need to make sure our organization gets the product or service it thinks it has bought. Lets face it – its is about results not the journey. The journey should be as pleasant as practicable – but the buck stops when the journey stops.
Unlike the good that we purchase, training courses and consultancy services don't come in boxes and you can't count them. Worse…often we buy them but don't use them until after you need them.
These are just a few of the reasons that make cost-effective purchasing of training and consultancy services a major challenge.
Do you get the quality of services that you want for the best price you can find?
Almost every manager agrees that training is an important factor to the long-term future of their organization.
Unfortunately, at times like the 'credit crunch' or when finances are challenged, training and development budgets come under pressure and, at times like this, obtaining and demonstrating 'value for money' is essential. In fact it is better to demonstrate value before things like these so at the next challenge, the organization understands the real value of training activity.
A training need can often be met through a public course rather than in-house custom courses, Many providers such as trade associations, colleges, university schools and private providers run a range of short courses. Such courses may be ideal for a closely defined need, but there are drawbacks.
Many public courses never actually take place because not enough participants sign up or too many drop out. Their quality can be variable. There is no opportunity for tailoring the course to the particular needs of the individual and little room for negotiation on price. However, it is worth seeking a discount if, for example, you can guarantee enough participants to make the course viable or can offer offsets such as work placements or project work, all of which colleges sometimes struggle with.
For more specific or complex training needs, the organization will probably want some sort of in-company training tailored to their specific needs and delivered exclusively to their staff or partners. This need may be very specific, or an attempt to improve performance, or a response to a change in the external environment.
The main decision here is the make-or-buy decision. Many organizations have good in-house learning and development departments and just buy in specialist modules as required. Smaller organizations may, by necessity, stick to training as watching and learning from colleagues, and public courses. But for most, at least some external assistance will need to be contracted for.
The contracting process can be long and fought with difficulties, especially with ERP training requirements, in which case a year or more is not uncommon to get from 'We need some training' to actually getting the skills they need.
First, training providers should question the potential client closely to discover its real training need, which is often different to what the client thought (the staff who are struggling may not be the cause of the problem; the perceived need for high-level skills may mask the failure of some employees to grasp the basics). If the client organization hasn't done this already, a diagnostic review (TNA) and skills analysis may be called for across at least some of the affected staff through questionnaires and one-to-one interviews. An effective Training Needs Analysis is critical to the success and demonstrable value added later.
The most effective reviews cover the skills and abilities required in the job for the future as well as what individuals can do now.
Delivering training in any form without an effective TNA or performance benchmark upon which to measure agains after training is pure folly, and a complete waste of the organizations time money and resources.
Potential trainers also need to get a detailed feel for the company culture, who is championing the need for training and what sort of budget is available. From this, a detailed proposal can be assembled before the parties begin a period of consultation, which could go through several rounds.If the training solution is in keeping with the culture there is an increased opportunity for the program being successful – if counter culture – then the program has failed before it starts.
A central theme should be real problems and issues. This ensures that the training tackles the root problem and generates bespoke material and results. Depending on the project's size, this development work may be chargeable. This should be agreed at the outset.
It is also obvious that, the more committed the client, the quicker and cheaper this phase will be. For the actual training, most firms charge per tutor per day.
Aspects that are number specific, such as marking and assessing student performance, where this is a factor, will cost a combination of per day for the tutor and per capita for the students.
Often there will be extras such as accommodation, subsistence and the issue of learning materials, all of which need to be specified in the contract. The clearer you and the supplier are – the better the relationship – the golden rule is no surprises – from either side!
It is usual for the client to arrange and pay for the location, if only because it is likely to have favorable deals with local hotels or conference centers.
Many organizations are resistant to sharing the development of training programs. In some parts of Europe this is common practice and certainly helps to manage costs effectively. For example; Banks combine to train staff in how to comply with new financial rules, and swap training materials and places.
As with any purchase, it is good to be able to show that the training was value for money. This is rarely easy to do and need to be planned carefully.
On public courses leading to a qualification, the benefit to the student is clear but that to the employer may be more nebulous.
On in-company schemes, particularly when there is a significant amount of real-life project work included, the opposite is true. Trainers can often provide an in-depth, after-the-event analysis, but this is rarely taken up.
The increase in e-learning suggests some major changes that will affect how training is purchased. Distance-learning material over the Internet is not new and many providers are developing this.What is new are technical standards for e-learning materials, although there are several competing standards. This means that a provider, or the client itself, can integrate materials from different sources – a video clip from one, some Power Point from another, a video of a lecture, plus material written in-house, into an integrated package. As many training providers already work as lead contractors' buying in specialist elements or hiring tutors from other suppliers, this is an obvious development.
It does mean that developing in-company material may cease to be a pure cost, as the client may be able to offset the cost against sales to others.
Has the training need been clearly identified – along with measures of success and evaluation to be measured after training?
Have you agreed success measure as part of the contract?
If this is a large project or the provider uses 'associates' you will be dealing with an account manager or sales person. what systems do the company have in place to assure the quality of the associates or sub contractors? How do they monitor this?
In-company training, does not have to mean at the company building, so keep participants off-site, this way they are less likely to be distracted by the day to day work while they are supposed to be focused on learning. Make sure those arranging accommodation for training are using advantageous hotel contracts.
that you have the resources to keep the material up to date.
When 70+% of the workforce is employed by service industries, the traditional approaches to purchasing tangible items are no longer appropriate – and don't work effectively. The purchasing of services approach is uniquely different, at least if you expect to negotiate the best contract, reduce and control costs, maximize and insure the quality of purchased services, and manage supplier performance.
How to purchase services with the same confidence as purchasing "hard goods".
How to find the right service suppliers and how to confirm what you are getting and for how much.
How to develop definitive services contracts and monitor service quality and supplier performance.