the analyst’s corner
Suits you, sir! David Wilson considers the bespoke content sector David Wilson
Some are the result of evolving needs of corporate customers and the challenging economic climate; others are due to technological and related changes in our society, such as the growth in mobile devices, tablets and social media. These changes have had a significant impact on bespoke content vendors. Not only have they had to adapt to new tools, technologies and techniques, but they have also had to re-evaluate their services as customer requirements change. Those vendors that have managed to adapt have continued to prosper. Overall, the market remains buoyant and demand for online learning continues to grow, attracting a steady stream of new entrants, as well as bringing growth to the majority of established players. What is also clear is that the expectations of e-learning customers regarding the capabilities of their bespoke vendors are constantly growing. With more companies applying the 70/20/10 model for learning, corporates are looking beyond the ability just to produce e-learning courses. Vendors need to be competent in delivering a range of types of resources, from simple PDFs through to complex scenario-based e-learning and simulations. Video-based learning is also playing a more important role in organisations, especially for performance support. Mobile learning is also becoming a key
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competency for vendors. Although most organisations are still in the early stage of developing mobile
s with many aspects of learning technology, the bespoke content sector has seen significant changes over the last couple of years.
content, it’s clear many want to be able to exploit the opportunities that mobile offers. HTML5 solutions are now in greater demand, with responsive design being one of the key areas of focus, and app-based mobile solutions becoming more common. For vendors, adapting to the changes in the market is critical. Given the importance of bespoke content vendors
and the dynamic nature of the sector, it is surprising that there is so little research available regarding the market itself or the vendors that operate within it. In particular, there is no public research to help companies compare bespoke content vendors and how their capabilities may align with the needs of corporate organisations. That’s why one of the first areas we decided to focus on for our 9-Grid model was the bespoke content development market. It is important to offer corporate organisations an overall view of the market and the capabilities of the vendors within it. Focused on the UK market, we’ve included the vendors we most commonly encounter when discussing the subject with our corporate research network. For each vendor we’ve tried to capture five distinct aspects: l Potential. What is the scope of the bespoke solutions that are developed? What is the level of sophistication the vendor can deliver? How scalable are its resources and can it meet the need of large European corporate customers?
l Performance. How is the vendor performing in the overall market? Is it successful at winning business and what level of customer advocacy does it achieve?
Given the importance of bespoke content vendors and the dynamic nature of the sector, it is surprising that there is so little research available regarding the market itself or the vendors that operate within it
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l Presence. What is the vendor’s historic and current market presence? This includes factors such as the size of the customer base, the number of enterprise customers and the overall size of the business, within the scope of the bespoke market.
l Total cost of ownership (TCO). What is the full cost of acquiring, implementing and operating the solution (typically over a three-year period)? For bespoke, this includes maintenance and translation.
l Future trajectory. This is a prediction based on the trend we currently see in the market related to a vendor’s performance and potential. It is worth stressing that it’s not necessarily about choosing a vendor that appears in the upper right sector of the model. Vendors in all the sectors can add value – it all depends what you want.
Some specific headlines from 9-Grid for bespoke e-learning include: l Domestic vendors still dominate. Global presence and potential does not drive local performance and the local customer. The bespoke e-learning market remains fragmented, with a large number of vendors working on a national or regional scale. Arguably, this trend has been reinforced over recent years.
l Scaling is hard. Partly a consequence of the previous point, but it still seems hard to scale a bespoke e-learning business, and vendors often seem to struggle to break through to the next level. There are hundreds of vendors (old and new) successfully operating under a £2-3m turnover level, but very few domestically that are over £8m.
l Core competency counts. Corporates expect their suppliers to bring two key components to bespoke development, creativity and quality instructional design, and these haven’t changed over time. Despite the overall potential of the vendor, its ability to deliver these two qualities is still paramount.
l Cost is not king. While there is a reasonable range in TCO, the reality is that cost is not the dominant decision factor for most organisations.
e.learning age october 2013
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