What Are Vendor Management Analytics (and Why Should L&D Care)?

L&D departments that oversee training for large organizations tend to work with a long list of vendors that provide content, platforms, and more. But keeping track of all these providers can be tricky without good vendor management analytics. These analytics offer insights into what’s effective, show how often people use those products, and help justify the value of recurring license fees.

This post addresses vendor management and sets the case for reporting on the utilization and effectiveness of your platforms, content, and tools. We’ll also show you how to use analytics to make informed decisions about tools and systems and how to discuss license fees with vendors.

If you’re new to our blog series Building a Business Case for Learning Analytics, be sure to read the introduction—which offers an overview and considerations for making the most of this series.

What Is Vendor Management and Why Does It Matter?

Vendor management describes how an organization researches, sources, and manages vendors. This process is essential to ensure that you are getting the best value for your investment and that vendors deliver according to your requirements and expectations.

Some large organizations have competing or overlapping products operating alongside one another. This can be the result of:

  • One or more companies merging, each of which uses different tools and systems
  • A lack of centralized planning and spending where different departments use different vendors
  • Vendors that develop their products in overlapping directions, so the products that had initially served different purposes now provide broadly the same functionality or content sets
  • A deliberate decision to pilot multiple products and choose the best one
  • A genuine requirement for marginally differentiated products at the time of purchase, which may or may not still exist.

Where this happens, vendor management means understanding these competing products’ value compared to the cost so you can make informed decisions about what to keep.

The kinds of questions vendor management addresses include:

  • How much value is this product delivering for our organization, and how does this compare to the cost?
  • Which products offer the best value for money if you have competing or overlapping products?
  • Are there any “scrap vendors” that we should eliminate?

Good vendor management also means saying goodbye to a vendor, even if you’ve used them for many years. But what if that vendor stores your valuable training data, and there’s no easy way to migrate that data to an equivalent new system?

In these cases, exporting your data to a central learning record store lets you keep all of your data in one place as platform and content vendors come and go. And if you convert and store that data in a standardized format such as xAPI, you can always get your data out if you need to migrate to a new learning record store. In other words, you’re free from vendors confining your L&D data to their systems.

What Does Vendor Management Look Like in Practice?

When Visa launched their digital learning campus supported by a complex learning ecosystem, they included Watershed to monitor the usage of newly launched platforms. Learning data is funneled through Watershed for reporting with dashboards, reports, and spreadsheet downloads provided to relevant stakeholders.

By aggregating and standardizing their reporting data in Watershed, the Visa team migrated to a new learning management system (LMS) vendor without affecting reporting. Data continued to flow from the new LMS, so reporting users could continue to use the same reports without interruption.

The following example Watershed report illustrates the growth in content utilization from a new vendor (the pink line) at the expense of another existing vendor’s library (the green line).

In this case, the organization might consider terminating its license with the current content vendor since learners have switched to using the new library.

This example also shows that people use one of the content libraries significantly more than the others (the blue line). Therefore, the organization will absolutely want to continue its license with that vendor. Content usage of a fourth vendor (the purple line) is low. Still, it seems to be increasing, so the organization will likely want to continue the license and monitor to ensure this increase in utilization continues.

Other clients use Watershed to monitor platform and content library usage and their overall learning ecosystem. This process has been especially valuable with sudden changes in usage patterns during the coronavirus pandemic.

For example, Alfonso Riley, L&D strategist at Caterpillar, noted significant spikes in the usage of some content. This insight enabled him to purchase additional content licenses to better meet demand.

Watershed clients use vendor management dashboards similar to this demo Watershed dashboard to monitor changes in usage of the various platforms in their learning ecosystems.

How Can Watershed Help You Manage Learning Technology Vendors?

Watershed can help you manage learning technology vendors in three ways:

  1. Utilization monitoring and impact evaluation. Bring all your learning data together in Watershed for analytics that identify learning platforms and content providers that are not supplying value for money. These analytics reports also offer an understanding of the use and value you’re getting from products so you can have informed discussions with vendors around license costs.
  2. Vendor comparison. When choosing a new platform, you may run pilots with several vendors so you can select the best value for the cost. In this instance, you can use Watershed to analyze usage and impact to make an informed choice.
  3. Learning data migration. Because you can migrate all your learning data into Watershed, you can avoid being locked into using a particular vendor due to any data migration challenges. Watershed converts this data into a standardized xAPI format, which is incredibly easy to extract. In other words, we don’t hold your data hostage to keep your business.
You can use reports like these to compare the number of licenses purchased with those used. Then, use this information to calculate the cost per actual learner, which may be significantly higher than your agreed license cost per learner if utilization is considerably lower than the number of licenses purchased.

How Can You Convince Stakeholders of the Value?

In 2020, total L&D spending on products and services in the United States increased to nearly $11 billion, even as internal payroll spending declined due to pandemic-related furlough.

Your organization’s budget probably doesn’t run into the billions of dollars, but is likely to be a significant investment showing no signs of shrinking. In this context, the case for Watershed is as a simple mathematical formula. If you had a better understanding of which systems and content have an impact:

  • How much of your budget could you save? For example, you don’t renew your contract with a low-utilization content library.
  • How much additional business value could you generate? For example, you could direct learners to content and platforms that have a more significant positive impact on their productivity.

If the final figure is lower than your Watershed license cost, investing in Watershed adds up.

Understand your stakeholders and how they will benefit from vendor management analytics.

Meet Your Stakeholders

StakholderPain PointsBenefits
C-Suite (CLO, CEO, CFO)Wasting money on content and platforms that do not provide good value.Being able to identify products that are not driving enough value to justify their costs.
Human ResourcesA lack of clarity about which content and platforms people should be enrolled in, especially during onboarding.Being able to identify which platforms are most likely to be useful to new hires.
Learning LeadersNot knowing where to prioritize budget for platforms and content and being unable to fund learning analytics technologies due to costs of existing products.Understanding the relative utilization and impact of different learning products to best prioritize budget and identify what to cut or fund investment elsewhere.
Instructional DesignersNot knowing which platforms are likely to be most effective for a learning program.Understanding the intended audience’s preference for the platforms and tools for delivering a learning program
LearnersEnrolled in many learning platforms and content libraries without knowing which are most useful for them.Good vendor management should ensure learners know the most relevant and helpful products.

Next Course: Making a Case for Enhanced Platform Reporting

Vendor management reports tend to present high-level analytics—such as learner logins—combining and comparing data from multiple platforms in a single report. But what if you want to drill down into the data and look at detailed information about a single platform?

While most learning platforms have built-in reporting, it often doesn’t suit all your needs or can’t be filtered or organized by an organizational unit. Or maybe you just don’t have time to go into every platform and want your reports all in one place instead.

The next post in the series makes the business case for enhanced platform reporting. It explores how using Watershed is worthwhile—even if you only initially have one platform to report on.

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