Journal of Fundamental and Applied Sciences

Research Article
ISSN 1112-9867 Special Issue

Available online at http://www.jfas.info

A SCIENTIFIC APPROACH TO OUTSOURCING IN TRAINING

S. M. Farahani

Senior expert of Index Group at Logistic Health Main Office of Social Security Organization of
Iran

Published online: 15 February 2016

ABSTRACT
The major feature of current world is the varied and rapid changes. The organizations have
changed fundamentally and they are not similar to the past organizations. After the end of vertical
integration in which organizations implement their supply chain activities from the beginning to
the end, now outsourcing era of organizational activities is emerged and the organizations don’t
attempt to perform all their required activities and each organization keeps one or two activities
as the key capability of the organization and creates value by it for customers more than the
competitors and the other activities are performed via other business in which activities have key
capability. This approach is a good method for organizations to reduce the costs, focus on main
processes, improvement of services, improvement of skills, reduction of time from idea phase to
market and it increases the total competitive advantage of company. So, the ignoring of
outsourcing benefits in the current business world is impossible. Now, the organizations focus
on outsourcing their activities with strategic approach and mostly successful organizations in the
world select outsourcing as one of the fundamental business strategies. In recent years, the
activities being outsourced in organizations are extensive and are developed gradually and
specialized services as “design and execution of training plans” are included. This study attempts
to evaluate the outsourcing concepts in training and then by expressing strengths and weaknesses
can investigate the above process and finally

Author Correspondence, e-mail: Sh_mirsaeidi@yahoo.com

doi: http://dx.doi.org/10.4314/jfas.v8i2s.456

Journal of Fundamental and Applied Sciences is licensed under a Creative Commons Attribution-NonCommercial 4.0
International License. Libraries Resource Directory. We are listed under Research Associations category.
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2028

7 effective steps are presented to achieve success in outsourcing process and this issue is also
discussed in social security organization.
Keywords: Outsourcing, Outsourcing in training, Contractor/supplier

Concepts
1-Outsourcing: Peter Druker defines outsourcing as: "Such issue is a fundamental change in the
structure of organizations in future. This means that it is not required that great commercial
companies, state offices, hospitals and big universities are turned into the formations employing
many of the staffs. These institutions are turned into the formations achieving great income and
reliable results as they focus on the activities for which they have mission and they do the works
relevant to their organizational goals. They works they know well and are familiar with their
details and pay fee to the workers and the rest of service works of these organizations are
delegated to external institutes."
Outsourcing is based on the fact that an organization can have a limited number of discrete
competences in the organization and the activities being performed inside the organization are
delegated to the outside via the experts with higher effectiveness (Walton, 1999). To do this, all
the effective activities in value chain of organization are evaluated in details to show whether
with these activities via external agents, much value is achieved. The important point regarding
outsourcing is that outsourcing is not removing all non-basic activities and then ignoring them.
The consideration of some activities as additional activities to the main business doesn’t mean the
lack of their significance (Woody, 2004).
Outsourcing in most of great, average and small global companies is one of the solutions to
reduce the costs and increase the incomes and many studies are performed in this regard.
The stages of outsourcing process
Various definitions of outsourcing process in different studies are defined. Generally, outsourcing
stages include the followings:
1- Determine a suitable decision making unit
2- Determine outsourcing activities
3- Select contractor
4- Conclude outsourcing contract
5- Manage and control of process
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2029

It is worth to mention that one of the most important stages of above process is manage and
control of outsourcing process and appropriate decisions are taken based on the performance of
supplier regarding the continuance or ending the work (Michaels, 2012).
The effective factors on outsourcing
- The contractor should have one or some key capabilities including specialization,
mastery.
- In outsourcing process, it is required that the relationship of two parties is based on
participation.
- Outsourcing contractor should verify that is evaluated and its mechanisms are as
convincing the outsourcing company.
- The outsourcing supplier should convince the outsourcing company that the information
is not disclosed based on the safety in his system.
- Outsourcing agents should have the professional ethics to keep the information and affairs
of outsourcing company.
- The organization managers should remember outsourcing item in the institute and notify
that the system accepts these affairs easily and there is no problem.
- To perform outsourcing and present a good report, we need IT and strong communication
channels.
2- Outsourcing in training
The studies have shown that in recent two decades, outsourcing activities have developed from
technical and manufacturing fields to administrative and service fields and organizational training
affairs (Nordin, 2007).
According to Miller, “Find an economical way with the lowest risk to create innovation and
effectiveness in their staffs and focus on the guiding strategies of your commerce.
“Outsourcing in training refers to:
Transfer management and skills in training or more items or the entire levels and development of
training performance and processes via an external provider (training and development, may
2003).
The studies have shown that outsourcing dates back to 1980s and it seems that the first concept of
outsourcing refers to General Motors company in 1986.
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2030

The role of outsourcing in organizational training

Training outsourcing helps the organizations in the following fields:
1- Coordination of training with business strategy
2- Re-assignment of resources to focus on basic competence
3- Smart use of technology
4- Moving from fixed structure of costs to varied structure
Outsourcing levels and delegating activities in training field
Outsourcing and delegation of training activities are done in three levels. The levels include:
1- Lack of outsourcing
2- Relative outsourcing
3- Full outsourcing
Level 1- Lack of outsourcing
All training activities of organization are done with internal organizational facilities including
human, technical, specialized and financial resources.
Level 2- Relative outsourcing
In this level of delegating activities, it is required to establish a collaboration contract between the
organization and contractor and to clarify the special roles of each of the parties based on the
quantity and quality of activities.
Level 3: Full outsourcing
Based on different reasons, the organization has no considerable role in training activities and the
contractor performs all responsibilities independently.

Outsourcing process in training:

This process is performed in seven steps as (Oshri, 2009)
1- Evaluate and determine the main goals and strategy of training, development and function
of human resources.
2- Evaluation of the resources and determine their function
3- Identify the outsourcing training activities
4- Identify the basic competences and outsourcing levels
5- Identify and select the provider/contractor of training
6- Conclusion of contract
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2031

7- Manage, control and supervision

Manage and control of outsourcing process in training
As it was said, one of the most important stages of outsourcing process is its management and
outsourcing in training field is not an exception. Based on the studies, to evaluate the
performance of providers, it is required to determine the required indices at first and then select a
good method.
The benefits of outsourcing in training
The training outsourcing process has many strengths and advantages. Some of them include:
1- The organization focuses on the central core of activities (key activities)
2- Reduction of costs in organization and increase money to be used in other intentions
(reduction of costs can be done via various methods as e-learning and digital system
learning).
3- Reduction of costs via performing activities by providers with low cost structure
4- Access to main capitals of the institute
5- The change of value structure of system
6- Achieve the best solutions, skills and experts (by external providers we can use different
types of specialized software, various experiences of teachers, famous designers, etc. at
appropriate time).
7- The increase of organizational competition
8- Achieving the new and innovative beliefs
9- Creativity improvement by participation with specialized providers
10- Presenting strong work method to staffs
11- Liberating the internal resources of organization for other goals
12- Reduction of control on operating costs
13- Improve managerial activities, supervision and control
14- Much flexibility in design and operation measurement
15- Risks reduction
16- Having clear attitude of what is achieved by this process.
Based on the previous items, there are three main advantages introducing outsourcing in training
as a logical solution.
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2032

1- The first advantage of outsourcing process in training is an economical activity. Also,a

good outsourcing process is based on some features:
Efficiency- the cost management and ability in the change of service providing levels to
customers based on demand and their claims.
In addition, the change in service providing and focus on costs are key indices leading to
success in outsourcing participations.
2-The second advantage of outsourcing in training is:The organization focuses on the main core
activities. Since, the limitation of organizational resources namely human resources, using of
outsourcing are dedicated to better service providing to customers and improve the products and
services.
3-The third main advantage of this process includes as achieving the best solution among the
various solutions.
So, an organization can focus on the best processes by utilizing training outsourcingbesides it
can have continuous improvement in the internal organizational training.
Also, the managers of human resources give over many organizational training to an external
provider system when they can not hold them in internal conditions.
As regards, organizational training with the entrance of knowledge management issues,
learning management systems and e-learning are much complex and due to specialization in
these affairs, the systems need much time and cost, thus nowadaystraining outsourcing can be
a better solution and decision.
The weaknesses of outsourcing in training:
The training outsourcing can have the following risks:
1- The reduction of unity by the change in training activities
2- Increase the necessary control in outsourcing activities and information flow
3- Reduce the organizational learning ability by reduction of basic skills
4- Reduce system in integration of education process
5- Reduce organizational control on outsourced programs
6- Hurt the group trust, feelings and motivation of employees in outsourced items
7- Reduce the trust of employees regarding job security
Seven effective steps to achieve success in training outsourcing
1- Design and plan for creativities growth
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2033

2- Study of strategic concepts

3- Analysis of costs and activities
4- Select of suppliers
5- Determine and define communication and negotiation concepts
6- Transfer of resources
7- Manage of Communication

Fig.1. View of effective steps to achieve success in training outsourcing

Step IStep IIStep IIIStep IVStepVStep VIStep VII

1- Design and plan for creativities growth
1-1 Assess the risks
1-2 Notify the creativities
1-3 Form the project team
1-4 Use a guider or counselor
1-5 Train the team
1-6 Use other resources
1-7 Write the explanations of resources management, information management and project
management.
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2034

1-8 Put all items together

2- Study of strategic concepts
2-1 Know the organization based on these views:
- Attitude -Main competence -Structure -Tools -Value chain -Strategies
2-2 Define the followings:
-True decisions -Contract duration -Contract expiration
2-3 Identify and organize the innovations.
3- Analysis of costs and activities
3-1Evaluate and determine the costs of activities
3-2 Measure and define the costs of projects break down.
3-3 Determine the system performance based on the followings:
-Evaluation of existing and future condition -The costs of weak performance
3-4Use modeling process along the costs/activities.
3-5 Define the following items:
-Special risks –Capital value -Costs structure -Models value -Final goals
4- Select of suppliers/contractors
4-1Identify the suppliers
4-2 Considertheir competences
4-3 Choose the contractors
4-4 Evaluate their proposed plans from the following items:
-Competences -Costs -Experiences
4-5 Define the followings:
-Total costs -The list of a summary of contractors -Final supplier -Review
with top manager
5-Determine and define communication and negotiation concepts:
5-1 Design the negotiation meetings.
5-2 Document the following items:
-Basic issues -The terms of contract cancellation
5-3 Define schedule of project execution
5-4Design the items regarding contract as follows:
-Application range -Standards -Costs of programs -The scheduled period conditions
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2035

5-5 Determine communication type

6-Transfer of resources
6-1Clarify the role of team
6-2Design the required transfer plans.
6-3 State the required items of transfer based on the following factors:
-Communication -Human resources -Other factors of service providing
6-4 Hold meetings with the staffs and visit them. Including internal organization employees and
providers.
6-5 Use the effective recommendations and prepare the situation for presenting them.
6-6 Use the counseling in different levels.
6-7 Use the physical displacement and movements.
7- manage ofcommunication
7-1- Regulate your managerial styles and models.
7-2- Use others counseling in supervision.
7-3- Establish internal and external communication of system.
7-4- Define the following items and design:
-The meetings holding plans -The agenda of meeting -Execution of meetings -
Formulate the reports
7-5- Execute the supervisory affairs
7-6- Control the weak performance.
7-7- Detect the problems and solve them.
7-8- Make the correct relations.
Social security organization and training outsourcing
At its wide concept, social security is one of the basic goals of divine religions. After elimination
of oppression, the Messengers invite people to state their big mission as poverty eradication and
avoiding wealth concentration. Human being has always found that adverse effect of the lack of
social security has emerged by various forms in society and this knowledge has obliged him to
form a society security and in an international system, social security is a right for all people and
an obligation for governments.
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2036

In Iran, social security law was approved in July 1975 and since August 1975, it was enforced
and to develop different social insurances and establish a coordinated system with social security
programs, social security organization is established.
The Iranian Social Security Organization as an intergenerational public non-governmental
institution with a socio-economic nature is the major and most inclusive provider of social
protection based on social insurance principles. The organization is administratively and
financially autonomous and relies on tripartite principle of employee, employer and Government.
According to Islamic and Iranian pattern, the ISSO plays a vital role in protecting the labor force
within the process of sustainable development of the country and also deepening social and
financial security through implementing, extending and expanding various social and health
insurances within the legal and actuarial frame.
As one of the main strategies of Iranian Social Security Organization is: "knowledge
management system developing" and this strategy performs based on experienced and
knowledge-oriented human resources. So these resources and training process have great and
important role.
This organization started training process via an integrated group in administrative field of
organization and then in 1997, training issue was continued in the form of a main office with
independent structure and by two deputies: Planning, supervision and executive as formally.
Also, in 2011 the responsibility of research plans added to its training responsibility.
The main office of training and research uses the maximum internal organizational power for
presenting suitable training services to its employee. In addition, this main office usestraining
outsourcing for applying new technology. For example, this strategy was used for training
needassessment. Despite the positive achievements of training outsourcing, training need
assessmentwas performed in three periods and it was not successful and the pre-defined goals
were not achieved. Some of the reasons of this failure include:
1- The lack of familiarity of contractors with organization processes
2- The lack of familiarity of contractors with the nature of organization jobs
3- The lack of common field of organizational knowledge with the knowledge of peripheral
environment
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2037

As it was said in training process, outsourcing process is used in managerial and non-specialized
courses and these items have positive results. But,no activity is performed in this process
regarding specialized training for the following reasons:
1- Have the required potential in organization health sector
2- Lack of professional contractor regarding insurance activities of organization
Later, this organization in other items as “implementation of training software” and “reading
book development design” apply outsourcing with positive results.

CONCLUSION
To use temporary opportunities of the present era, the current organizations are obliged to create
a flexible structure and use the facilities outside the organization. This is a strategic necessity in
competition, creating value better than that of competitor for the customer.
As it was mentioned, to use “outsourcing in training” beside more advantages, there are also
some risks. Nevertheless, by considering all items and exact evaluation, we can pave the way for
its successful execution. (Oshri, 2009)
Thus, using outsourcing process generally and outsourcing in training specifically, in spite of
having some problems for the following reasons is recommended:
1-Improve effectiveness of organization activities by focusing on the best items
2-Increase systematic flexibility for successful encountering with the changes (products, services
and technologies)
3-Increase product value, service and attractthe satisfaction of customers and beneficiaries
4-Achieve new techniques and skills
5-Improve management and control
6-Achieve innovative beliefs and improve creativity by taking part with suppliers
7-Faciliate the development by using developed capacity and ability of the contractors
8-Reduce the costs via using the services of the best suppliers
9-Use the latest science and technology as a competition weapon (this path as taken internally is
costly and not permanent).
10-Provide the experts of technical affairs in different groups and using their experience in
different programs as their permanent presence is not necessary for organization.
S. M. Farahani et al. J Fundam Appl Sci. 2016, 8(2S), 2027-2039 2038

It is observed that the benefits of “outsourcing in training” make it as a good value and training is
a critical trade but in most organizations, it is not the main business of the organizations. Now,
the training outsourcing suppliers have invested on this path and the organizations should use
their effect and these suppliers should make efforts for their qualitative development and
updating their knowledge.
In social security organization as a knowledge-oriented organization based on process and
systematic communication, it is required to use this new training approach. Based on the unique
services, it is required to use suitable methodologies of training outsourcing and professional
expert contractors and by providing the required infrastructures and internal strengths to perform
supervisory plans, we can take great steps.

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How to cite this article:

Farahani S M. A scientific approach to outsourcing in training. J. Fundam. Appl. Sci., 2016,
8(2S), 2027-2039.