IT training being outsourced

More and more companies are outsourcing IT training activities, says researcher International Data Corporation.

More and more companies are outsourcing IT training activities, says researcher International Data Corporation (IDC).

Senior vice-president for worldwide and IT education and training services, Ellen Julian, says "gone are the days when suppliers can offer a subscription to a series of titles and have an easy renewal of contracts. Instead, customers require the integration of a variety of off-the-shelf and customised content, delivery methods, and services".

IDC New Zealand's market analyst Mark Cribbens says recent initiatives, such as the launch of IBM's Learning Space confirms this and trainers will lose market share if they don't tailor courses more to suit employers.

Cribbens also says added value services will increasingly differentiate firms from their rivals and firms will spend more on added value services over the next five years.

IDC's recently published New Zealand IT Education and Training Market report found IT training market in New Zealand, excluding revenues from the tertiary sector totalled $42.2 million in 1999.

Cribbens says the market is expected to grow at 15.2% this year and achieve a CAGR (compound annual growth rate) of 10.4% through to 2003.

Traditional instructor-led training remains the preferred training delivery medium for New Zealand corporate and individual buyers.

"The interactive and customisable nature of instructor-led training will ensure this medium remains the primary source of IT training in New Zealand for the foreseeable future. However, instructor-led training is losing ground to the increasingly popular technology-based training mediums.

"New Zealand companies are starting to invest in technology based training. CD-ROM is no longer the dominant delivery format in this market," he says.

IDC expects revenue from CD-ROM training delivery to increase until 2003. Its 1998-2003 CAGR of 11.5% is significantly lower than the 84.8% forecasted for Internet based training.

Although New Zealand is not adopting technology based training as much as the US, Cribbens believes there are significant opportunities for training vendors to gain a competitive advantage by adding value to current offerings by embracing emerging technology delivery methods.

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