deere roi case study

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Page 1: Deere ROI Case Study

Training ROI KeepingDeereRunningJohn Deere’s training motto is “No boundaries,”

and that is appropriate when considering its cen-

tralized training structure. The company devel-

oped a centralized system for training develop-

ment and management and an organized, struc-

tured skills-development curriculum for all

employees at North American dealerships. That

involves a lot of training. In North America

alone, Deere has 30,000 dealership employees

selling and servicing its agricultural products.

Training the service technicians at those

dealerships is a crucial component of Deere’s

training program, as their performance affects

warranty costs and customer service for its North

American customers. Deere is constantly looking

for ways to train those technicians more effi-

ciently.

“At John Deere, we consider our training to

be a competitive advantage and a product support

requirement,” said Todd Zehner, training delivery

manager for John Deere. “We have complex

products and need qualified personnel in our deal-

erships to support the products.”

Reprinted from ASTD Conference Proceedings: ROI Network, University of Maryland, December 2002

ACT Reprint Series

As John Deere’sreach spreads all over

the world, the efficiency of

its technician training

is becoming increasingly

important. Taking

advantage of ACT’s

training evaluation

methods, Deere

discovered the many

benefits of its

training system.

Page 2: Deere ROI Case Study

Deere has developed an Electrical/ Electronic

(E/E) Certification course for the technicians who

work on Deere agricultural products, including

tractors and combines. The training’s main pur-

pose is to improve service technician skills

related to diagnosing and repairing electrical and

electronic problems.

Service technicians typically work with

equipment that breaks down during crucial plant-

ing or harvesting times. The time spent fixing the

equipment needs to be short in order to maintain

customer satisfaction. Also, the equipment is

expensive—often costing hundreds of thousands

of dollars—and is often still on warranty, which

can mean significant costs for Deere.

Those costs were the primary reason that

Deere wanted to evaluate its E/E Certification

training. If the technicians could perform more

effective diagnoses and repairs, they could signif-

icantly decrease Deere’s warranty costs because

the right components would be repaired the first

time they were diagnosed.

Deere wanted to analyze the effectiveness of

its technician-training methods, both in terms of

cost and in participants’ post-training job perfor-

mance. It also wanted to provide evidence of the

value of the course to dealership owners. The

company had three questions to answer:

1. Do course participants and their managers

agree on post-training performance improvements?

2. What are the dollar values of those improve-

ments?

3. What is the return on investment for the

training?

John Deere’s North American Agricultural

Marketing Center hired Training Evaluation

Services, part of ACT’s Workforce Productivity

Solutions™, to conduct a study detailing Deere’s

return on training investment.

Examining the courseThe E/E Certification course is a four-day

event designed to teach technical personnel about

basic electrical theory and troubleshooting, using

both in-class lectures and hands-on learning

activities. Offered throughout North America, the

course begins and ends with tests—one entry-

knowledge pretest and one post-course test in

which the trainee must demonstrate a specified

level of competence. Data from the two tests

show the amount of information trainees

absorbed from the course.

John Deere is a worldwide leader in farm equipment manufacturing and a Fortune 500

company. In North America alone, more than 30,000 technicians inagricultural dealerships sell and repair its products.

Page 3: Deere ROI Case Study

ACT first interviewed service managers at

North American Deere dealerships, as well as

training instructors and participants, to get a bet-

ter understanding of course objectives and

methodology, and to determine how the course’s

impact could be measured. Service managers

were asked to describe service technician demo-

graphics and various factors relating to their job

performance, including skills, knowledge, turn-

over rates, experience, and training. The group

also was asked to provide information on the

types of maintenance the technicians perform and

problems they encounter—in order to find out

how the training was expected to be applied—and

what measures they use to track their efficiency.

Using the findings from those interviews,

two questionnaires were constructed—one for

Deere service technicians who had completed the

certification course and one for their managers.

The questions contained parallel content for com-

parison purposes, including an open-ended item

asking for respondents’ views on the training

course and the certification process. The parallel

content of the questions aided in demonstrating

whether managers and technicians shared the

same views on training and certification. For

example, managers and technicians were both

asked whether they agree or disagree that techni-

cians spend less time diagnosing problems after

E/E training. If they agreed, both groups were

asked to give an estimate of how much diagnosis

time was saved per job (less than one hour to

greater than five hours or more).

To evaluate the questionnaire results, ACT

focused on the third and fourth levels of Donald

Kirkpatrick’s widely used four-level system of

training evaluation. Kirkpatrick’s third level con-

cerns how trainees change their work behavior

after completing training, which is typified by the

agree/disagree item involving the time spent diag-

nosing problems. In this case, the change in

behavior would be an increase in diagnosis effi-

ciency since completing training. Asking for a

reduced diagnosis-time estimate addressed Kirk-

patrick’s fourth level, giving Deere concrete data

relating to how training affected a performance

metric—in this case, how much time was saved in

diagnosing equipment problems.

ResultsA total of 432 surveys were completed. ACT

analyzed the data and developed a detailed report

for Deere, assessing these performance metrics:

• Diagnostic time saved

• Repair time saved

• Parts saved

• Time spent finding information

• Number of service returns

Among the findings were that E/E Certifica-

tion training reduced diagnostic and repair time,

as well as the waste of parts during repair.

Training Evaluation Services is a component of ACT’s

Workforce Productivity Solutions™, which provides a

sophisticated system of strategic measurement, assessments, needs analysis,

and program evaluation services to help organizations focus on

strategies and tactics essential to organizational success.

Page 4: Deere ROI Case Study

Training also affected service returns, reducing

them by 20 percent. ACT also reported to Deere a

significant return on training investment. For

every dollar Deere spent on training in the U.S.,

Deere received a net benefit of $1.34. In Canada,

the ROI numbers showed a $1.55 net benefit (in

Canadian dollars) for every training dollar spent.

The study also found that technicians saw addi-

tional benefits from the training, including an

increased understanding of electrical schematics

and of how to read and use technical manuals.

Standard practice calls for assessing the level

of confidence in the measurement results devel-

oped during the study. For the level of confidence

in the ROI numbers, the study used information

from the technicians’ and managers’ question-

naires. It took into account the average percent-

age of agreement between technicians and man-

agers across three of the performance metrics

studied. The ROI confidence levels were:

• 96 percent for time saved in diagnosis

• 84 percent for time saved in repair

• 92 percent for parts saved

Taking the levels of agreement into account

among managers and technicians, the confidence

levels to the ROI results would change so that the

net benefit would be $1.13 and $1.31 in the U.S.

and Canada, respectively.

In addition, responses to the written question

gave Deere a detailed view of how managers and

technicians viewed the training. Responses

included positive comments (“very informative,

excellent instructors”), negative comments

(“when the classes are four days or more at a time

it gets too long”), and suggestions on how to

improve E/E training (“it would be nice to test out

of classes if possible”).

Zehner said Deere has found ACT’s training

evaluation to be a competitive advantage.

“ACT has a very objective, honest, and sci-

entific approach to measuring training effective-

ness,” he said. “The results are determined and

presented very well. Our experience with ACT

has been very positive.”

For more information on John Deere, go towww.deere.com.

For more information on ACT’s Training EvaluationServices, go to www.act.org/workforce/consult.html.

“At John Deere, we consider our training to be a competitive advantage and a product support

requirement. We have complex products and need qualified personnel in our dealerships to support the products.”

Todd Zehner,Manager of Training Delivery

for John Deere