As the outsourcing of human resources functions continues to grow, the outsourcing of specific learning functions grows with it. New evidence of this growth is Fidelity Investments’ announcement that it intends to acquire TEDS, a software development and consulting company providing learning management systems, performance management and workforce management products and services. Fidelity would continue to operate TEDS as an independent business while integrating some of TEDS’ product and service offerings into the Fidelity Employer Services Company (FESCo) suite of offerings, which include human resources and benefits services such as the administration of retirement, pension and payroll programs.
TEDS was founded in the early 1990s and is now installed in more than 100 countries with many Fortune 500 customers. Joseph F. Ellis, Jr., president and founder of TEDS, said, “The first TEDS implementation was in 1990. Way before all the press, we had come up with the idea of an LMS.” When the company started, Ellis explained, many companies were dealing with just-in-time issues, but few were paying attention to the rapidly evolving skill sets of their workforces. Few knew how to find out whether they had the right people with the right skills at the right time. Now TEDS provides products and services to clients such as DaimlerChrysler, Ericsson, Nortel Networks, Qwest, BellSouth and Steelcase.
As CEO and owner of TEDS, Ellis felt that the opportunity in the market was growing. “It was not a question of just having the proven technology and having the proven implementation processes, but having a corporation committed to the service and the growth of a product that was going to become a market that’s bigger than what we’ve seen on the materials side,” Ellis said. “And I knew that I needed a partner that would help me accelerate that.”
TEDS hired Wachovia to help it search for that partner, and at the same time, Fidelity Investments was looking for a learning management company to fill that space in its outsourcing business. Fidelity saw the trend of outsourcing employee administrative functions growing, and its customers were looking for these services in the learning and training space. TEDS was the right fit to fill the gap, as a successful early mover with many large customer and a 98 percent customer retention rate.
“Within our line of business we have a full HR outsourcing offering that ranges from the core HR payroll function to staffing to compensation planning to, now, training,” said Caroline Boyd, senior vice president in FESCo. “The area that we were getting a lot of requests for that we did not yet have a robust solution in place was in the learning management area.”
Through the acquisition of TEDS, Fidelity will be able to expand its HR outsourcing services into the growing outsourced learning administration market. Boyd said the acquisition will enable Fidelity to create a robust learning offering very quickly. “We had some ability to enable some basic tracking functionality, but it wasn’t as robust as what our clients were asking for, so our first priority is really filling that gap, and TEDS allows us to do that immediately.” In fact, Boyd explained, the company is already in the midst of its first implementation with a client.
“What we were looking to do was to take the ecosystem that they have and take the benefit of integration within that system, and take the benefit of integration that we have with all of our products being integrated with our human resource management system, and really create a robust environment that will not just distribute data, but will really enable business intelligence—business decisions—and will create an environment where integration makes the whole greater than the sum of the parts,” said Boyd.
“People want intelligence, they want information; they don’t just want a data dump,” she added. “…So we are excited about working with TEDS to create an environment that will actually push the right information to the right people at the right time. For example, being able to track an individual’s skill sets and match those up with the manager who’s looking for those skill sets very efficiently, rather than having that manager go out and search for this person is an example of the power of that integration that we hope to see realized in the very near future.”
Outsourcing learning management and human capital development benefits companies by reducing costs and easing the workload of busy IT departments. “A lot of the effort on the customers’ side is all the IT work that has to go on,” said Ellis. “By offering these products and services, we’re able to reduce that cost significantly and basically provide the service to them through a VPN or some other type of connection. And, a lot of them are behind on their IT projects—they’re just overwhelmed.”
Outsourcing these functions also allows companies to reduce head count that is not critical to the business, Ellis said. In addition, Ellis said, “we’ll be using the power of being able to share multiple resources over many companies. That will allow us to spread costs that other companies would have to absorb all at once.”
Completing implementation is not just about the technology, Ellis said, but more about solving a business problem. “It has to be a solution,” Ellis said. “I call it a solution where technology intersects the business proves. If you put in technology, and it never intersects the business process, you’ll have an implementation of a product, but you’ll also have what we call gaps or workarounds.”
“The LMS is really focused on the optimization of the performance, development and deployment of human capital against a business’s goals,” he added. “The CEOs and CLOs do not care how many hours did people take last year—that doesn’t make them excited—or how many people took a certain course. What you really want is to provide a solution that somebody can come in and say, ‘We’re about to roll out a new product, a new venture, a new technology. Do we have the right people, and how do we know that? If we don’t, what’s the plan to get them? And can we manage that plan to make sure we get success?’ And I believe that’s what differentiates this TEDS Fidelity offering is that it is a suite of integrated products that nobody has that can help answer those questions.”
Ellis explained that it is important to know the “what, the who and the how.” This means, he explained: “What business goal am I trying to solve? Who does it affect? …Then, once you know the who, you ask what are their individual gaps for them to be able to what we need them to do? And that’s when the how comes into effect. Too often in our marketplace, the how has been e-learning or some technology. …We’ve been jumping to the how first for the past four or five years. This is the first time you’re going to see products, from TEDS Fidelity, that say we have the how, but more importantly, we can connect to the what and the how many and the who.”
Emily Hollis is associate editor for Chief Learning Officer Magazine. She can be reached at firstname.lastname@example.org.
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Filed under: Performance Management, Talent Management, Technology