Both the nature of learning content and the context in which we use it have changed. The traditional approach to whether to buy or build content was based largely on cost. Today, however, the decision is more complex. On the one hand, producing training materials in-house has become increasingly complex and expensive. On the other, the web provides access to a wider range of good value materials than ever.
In the old world of training, this question was relatively simple. Most content would be created in-house and only specialist materials outsourced because they required particular skills or knowledge to create. There were typically two types of content—the book and the classroom course—and only one question to answer: How much would they cost? Today, not only is that choice much wider, but the calculation about cost is more subtle and complex. L&D pros have to make decisions based on a range of factors, including production costs, maintenance costs, and opportunity costs.
Production costs: Producing learning materials today requires a wider skill set than ever. Employees expect materials to be accessible via mobile, they want video content; and while some want to attend an online course, others prefer self-service prompts and guides. The skills needed to create this range of materials is larger than when a training department only had to write material for classroom delivery. Such a skill set takes time and investment to build and maintain.
Maintenance costs: The speed with which things change means that updating and maintaining learning materials is a key part of the cost. Increasingly, the investment in content is less a matter of the initial, upfront cost alone; organizations also need to factor in the total cost of ownership of the content: ongoing costs such as the cost of maintenance, localization, and updating.
Opportunity costs: If the cost of producing materials in-house is one real consideration, another is the opportunity cost: What is the L&D department not doing when spending its time devoted to creating training materials? If a department spends its time creating materials, it cannot spend the same time building relationships and acting strategically in the organization.
The overhead of creating and maintaining courses can be considerable. The burden of regulation has increased, with Boston-headquartered asset management company State Street Global Advisors estimating that the amount of time allocated to compliance training has doubled over the past few years, to over 14 hours per employee annually. Failing to comply is not an option. Fines and settlements paid to U.S. regulators rose from $32 billion in 2012 to $58 billion in 2014. As both the amount of regulation and the cost of noncompliance have risen, can L&D keep pace with producing accurate, timely courses and information to deal with this important demand?
When deciding whether to buy or build, use these seven key questions as a guide:
- Is the issue best solved with learning materials? If not, tackle the actual root causes of the issue.
- Is the content part of a high-profile, long-term program? Commission the content externally.
- Is this a low-risk issue where production values are unimportant? Provide access to it via the Internet.
- Is this issue best tackled with quality content aligned to job roles? Use Curated Content Sets.
- Can the issue be tackled with self-service, "good enough" content? Buy generic content from a catalog.
- Is the issue in the "gray zone"—a mixture of company-specific and generic information? Establish the component parts and the total cost of ownership.
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Does the issue involve only content unique to the business? Create the content internally.
Sometimes creating content internally is the right thing to do; but the cost in terms of time, effort, and opportunity is so large that it should always be the last option the L&D department turns to.