Training Industry Magazine - November/December 2017 - 39

from you. It's the opposite of saying, "We
serve the enterprise as a whole, and we
know what's best for you."
The foundation is a catalog of well-defined
services. Here are some examples:
* Needs assessments to help
customers define their
developmental requirements
* Seats in classes sponsored by
the training department
* Custom course delivery, where
the customer supplies the
courseware and the attendees
* Courseware development assistance
(sold to subject matter experts (SMEs)
who sell their expertise in the form of
documentation and courseware)
* Mentor coordination
* Professional credentials facilitation
What's not in your catalog are the
many things you do to stay in business,
like planning your business, developing
new
services,
managing
your
resources and marketing your services.
Entrepreneurs know the difference
between "do" and "sell."

HOW TO MANAGE VENDORS
An entrepreneurial training department
wants to be the "go-to" place for all
things training. You want market share.
So, you want to build the habit of buying
training through you, not around you.

That means you generally wouldn't
refer customers to external training
vendors, especially for topics that are
of general interest. Instead, you sell
the training internally and use vendors
in combination with your internal
resources to fulfill those sales. You're
a value-added reseller, not a broker of
external training services.
This way, whether you "make" or "buy,"
you can provide training on virtually

Build the habit of
buying training
through you, not
around you.
any topic, and there's no limit to your
resources. Your only constraint is your
customers' ability to pay for the training
they want.
Of
course,
you
must
accept
accountability for the quality of
your services, even if you've hired a
contractor or vendor to deliver them.
Entrepreneurs manage vendors as part
of their staff.

PREPAID REVENUES
Treating your budget as prepaid revenues is the essence of internal market economics.
Implementing this concept requires four things:
* Investment-based budgeting: a budget
that describes the fully burdened cost of
proposed services, not just what you plan
to spend (the rows as well as the columns).
* A service catalog with fully burdened
rates (typically generated by the same
cost model that creates the budget).

* A governance process that decides what
to buy with the checkbook created by
your budget.
* A process for accepting additional money
from customers to pay for additional
services.

HOW TO TREAT YOUR BUDGET
Your budget is the enterprise's way of
paying for your services (not paying your
costs). So, think of it as prepaid revenues
- money put on deposit with you at
the beginning of the year to buy your
services throughout the year.
Of course, your services have a cost. Those
revenues (provided in your budget) only
pay for a finite amount of services.
This paradigm, described in my book,
"Internal Market Economics," solves
many problems. For example, if
you're forced to cut your budget, the
enterprise will have to decide which
services it will forego. And if customers
want more than your budget buys,
they'll have to find incremental money
to pay for additional services.
Thus, expectations match resources.
And while you always strive to be more
efficient, there's no magical "do more
with less" in your budget negotiations,
or arbitrary limits like last year, plus or
minus a percentage. In business, "you
get what you pay for." So, constructive
budget discussions focus on the needs
of the business, and executives learn to
appreciate the value you deliver.
Once decided, your budget creates
a checkbook. Then, a customerdriven governance process decides
which checks to write (which of your
services to fund within the constraint
of your budget). Customers like being
empowered to decide what they'll buy
from you. They'll naturally buy what they
most need, aligning your department
with their strategies. Thus, you'll deliver
greater value to the business.

IMPLICATIONS
FOR STRUCTURE
Perhaps most fundamental to internal
entrepreneurship is your organizational
structure. Jobs must be defined as
businesses (not the traditional roles,
responsibilities, processes and tasks).
So, what are the businesses within a
training department?

T R A I N I N G I N DUSTR Y MA GAZ INE - BUSINESS OF LEARNING 20 1 7 I WWW. T RAI N IN GIN DU ST RY. C O M/ MAGA ZI N E

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Table of Contents for the Digital Edition of Training Industry Magazine - November/December 2017

https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_winter2024
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_fall2023
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_summer2023
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_spring2023
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_winter2023
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_fall2022
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_summer2022
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_spring2022
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_winter2022
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20210910
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20210708
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20210506
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https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20210102
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20201112
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20200910
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20200708
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20200506
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20200304
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20200102
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20191112
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20190910
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20190708
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20190506
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20190304
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20190102
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20181112
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20180910
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20180708
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20180506
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20180304
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20180102
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20171112
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20170910
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20170708
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20170506
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20170304
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20171112_se
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_20161112
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2016fall
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2016summer
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2016sales
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2016spring
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2016winter
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2015outsourcing
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2015fall
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2015summer
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2015leadership
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2015spring
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2015winter
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2014fall
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2014summer
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2014spring
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2014winter
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2013fall
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2013summer
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2013spring
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2013winter
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2012fall
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2012summer
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2012spring
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2012winter
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2011fall
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2011summer
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2011spring
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2011winter
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2010fall
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2010summer
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2010spring
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2010winter
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2009fall
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2009summer
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2009spring
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2009winter
https://www.nxtbook.com/nxtbooks/trainingindustry/tiq_2008fall
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