maximizing the return on investment (roi) from elearning

www.aimsdigital.com

Maximizing the Return on Investment (ROI) from

eLearning

Copyright Aims Digital Services Pvt. Ltd. 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


Calculating ROI

• Costs ( Investment)

Software Costs

Human Costs ( Training rather than working)

Travel & Living Investment

• Returns

Better trained more effective employees

Regulatory compliance


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


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


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?


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


A method for determining current ROI (cont.)

• We’ve got a cost and a number representing either trainedemployee units or another metric

• Determine your cost per unit of these metrics


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


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


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?


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


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


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


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


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


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


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?


Contact Information

• Aims Digital LLC

Steve case

[email protected]

603-292-3935

mailto:[email protected]


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

http://www.instantpresenter.com/PIID=ED53D680814C

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