Due to Budgetary constraints ROI has become an important part of eLearning industry. Does your eLearning solution gives you Maximum return on Investment? what are the facts? How you measure it? Check out
2. eLearning Defined
• Using electronic systems to deliver training and support
• Managing Instructor Led Training
• Tracking Results
• Reporting on Results
• Setting Goals for Organizational Learning
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3. Calculating ROI
• Costs ( Investment)
Software Costs
Human Costs ( Training rather than working)
Travel & Living Investment
• Returns
Better trained more effective employees
Regulatory compliance
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4. Maximizing ROI
• The principal goal of T & D is to maximize the business return from the
training process
More effective Employees
Increased Retention of employees
Reduced exposure to regulatory/legal issues
Better trained / more loyal customers
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5. Measuring ROI
• Holy Grail of Training
• Very difficult to do in real terms
• Some situations provide great metrics
Call centers – Call length
Manufacturing –Units per hour / Accidents per year
• Some situations provide metrics which are affected by
outside factors
Sales Training
Legal Training
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6. Step One - Measure ROI
• Critical First Step
• How effective is our training program?
• What is it doing for us today?
• Are we making or losing money on training?
• What changes do we see in our employees based on our training
program?
• What’s the value of these changes?
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7. A method for determining current ROI
• Need a starting point
• Calculate training costs
T & D staffing costs
Employees lost work costs
Cost of purchased Materials
Travel/Living/Facility Costs
• Calculate training benefits
Number of trained employees X number of trained areas
Ay metrics that are more valuable
– Call center Time
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8. A method for determining current ROI
(cont.)
• We’ve got a cost and a number representing either trained
employee units or another metric
• Determine your cost per unit of these metrics
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9. ROI Example
• Company X has 42 employees
42 trained in Area A
30 trained in Area B
12 Trained in Area C
• Total trained units are (42 + 30 + 12) = 84
• Total Cost of Training Program
T & D Salary and benefits - $300,000
Lost workers hours 110 X $100 = $110,000
Travel/Living/Materials/Facilities = $45,000
• So Company X is spending (300,000 + 110,000 + 45,000) =$455K for 84
“Training Units” or $5400 per training unit
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10. Advantages and disadvantages of the
method
• Advantages
Simple
Easily Quantified
Understandable by management
• Disadvantages
Assumes T & D is worth exactly what it costs
Ignores the employees actual production in many cases
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11. Considerations looking forward
• What’s the impact on our ROI if we made a change to it?
• 100% e-learning or blended approach?
• Would our new approach be more or less effective than our current
situation?
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12. Calculating the Cost of eLearning
Adoption
• Software Costs
• Content Creation or Purchase Costs
• Training of T & D staff
• Changes in Travel/Facilities costs
• Changes in number of employee hours spent training
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13. Calculating the financial benefits of an
eLearning Solution
• Reduced hours training
Study show e-learning reduces in-seat time by about 50%
• Reduced Travel/ Facilities Costs
• Reduced costs for instructors and trainers
Job becomes creating content not delivering it
• Benefits for management
Increased business intelligence
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14. Method for calculating the costs and
benefits of eLearning solution
• Envision the company AFTER a successful e-learning initiative
• Use a 3 year window
Many of the costs are incurred at startup
• Things to include
Software Costs
IT Costs
Training for T & D staff
Purchased training material
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15. What’s our Goal?
• TO DO BETTER
Whatever method we take to calculate ROI , what we’re trying to
understand is if we should make a change
Assume you don’t know everything
– Be conservative with estimates ( guess high) for things
like T & D training
Collect hard numbers where you can
– LMS/Hosting/Content Purchases
Our goal is to show a minimum 2x increase in ROI
– Sometimes can be less , but always assume 20-40% in what you
don’t know you don’t know
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16. Increase ROI for eLearning program
• Minimize the costs spent on infrastructure
LMS
Content Creation Tools
Network
• Don’t spend money on courses which are of low impact
• Use a blended approach
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17. Strategies to increase ROI
• Careful Selection of content to be developed in-house
Almost always cheaper to buy than build
Organization specific content must be built
• LMS and Hosting costs
Shop around – Wide variations in price
• Blended Approach
Consider using current models where the number of trainees is smaller
• Coherent vision of success
Do all of our initiatives tie in to our long-term goals
• Management buy-in
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18. Envisioning the future
• How does my organization operate differently after a successful
implementation?
Less travel to Training?
Reduced number of hours per worker to achieve proficiency?
Reduced number of hours spent preparing Regulatory reports?
What’s all this worth?
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19. Contact Information
• Aims Digital LLC
Steve case
steve.case@aimsdigital.com
603-292-3935
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20. Next Free Webinar
Next Free Webinar
The 10 most important things to know before Creating an eLearning course
Oct. 9 2014 2 PM eastern US
Registration link
http://www.instantpresenter.com/PIID=ED53D680814C
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