Building A Successful eLearning Business Case, Part 1

The eLearning Business Case: Calculating ROI And The Role Of Online Learning

There is a mass of literature which provides evidence to suggest that eLearning is just as effective (and in many cases more effective) at imparting knowledge as traditional classroom learning. Our aim is to amass all the research and information available into a forceful, undeniable nugget of eLearning enticement. This is the business case for eLearning.

eBook Release: The Business Case For eLearning
eBook Release
The Business Case For eLearning
Discover the benefits an eLearning approach delivers in 3 major areas and how adopting an engaging strategy will increase the ROI of your training programmes.

To do this we will show that online learning can be utilised to maximise Return On Investment (ROI) in organisational training. How does it pull off this miraculous feat? By providing a:

  • Highly effective method of imparting information.
  • Financially friendly alternative to the classroom.
  • Knowledge share for your team.

As companies attempt to survive in the knowledge and information age, the importance of intellectual capital only continues to grow. Organisations often speak of the value of human capital – the combined human capacity to use skills, know-how, and expertise to meet a wide variety of business needs and problems. Boil any business down to its basics and all you are left with is its people. Yet many organisations fail to invest enough in their staff.

‘…Another reason why our human capital is so important is intensifying competition… our ability to develop productive relationships with these resource holders, and thus to win important business opportunities, is rooted in our technical know-how. That’s one reason why we have maintained heavy investment in research and development and specialists skills in recent years.’ – Hugh Mitchell, Chief Human Resources at Shell

eLearning Acceptance

So what is the solution for those looking to prove their dedication to the development of their workforce and organisational growth? The ordinary response is ‘training’. We would like to clarify that further – what is important here is not just delivering training; it is delivering the right kind of training. Training that engages, stimulates, and most importantly: sticks.

Adopting a classroom training approach because it is the traditional method is akin to sending an important message by snail mail instead of via email, or carrying your CD collection wherever you go because you refuse to upload it to your iPod. It may fill you with a hearty sense of nostalgia, but it’s also wholly inefficient.

eLearning has earned widespread acceptance throughout the corporate world and the number of companies willing to invest in an online learning programme continues to grow on a yearly basis. In 2009, 39% of those surveyed said they had used eLearning (up 11% from the previous year). This number is only likely to increase as big companies continue to embrace the online learning revolution (DestinationCRM.com).

As Generation Y and Z members take up more roles in the working world, the level of technological comfort has increased. We now spend 36.5 hours a week on the internet. It is fair to say that we know our way around a computer. eLearning is no longer the girl that you are too afraid to ask out on a date. She is the girl you take home to meet your mother with a worldly sense of pride. In today’s wired world workforces are not only ready to take their learning experience online – many of them actually expect to.

eLearning has cast off any stigma it may have once had and thrust itself into the corporate mainstream. There is a good reason for the prominence of eLearning: it just makes good business sense. Over the course of this research paper, we aim to show that eLearning can provide your L&D campaigns with considerable return on investment (ROI).

But before we start churning out the facts and stats, we would first like to note something of great importance. Just like classroom training, eLearning requires engagement at every level of the process. From upper management down to the learners themselves – there has to be some kind of engagement strategy in place. Without this, your training programme is doomed to failure. Your training’s ROI is this often reliant on the amount of effort you put into effectively engaging your staff with their own self-development.

An eLearning approach can save you a lot of money – but only if you enter into it with the right attitude.

Calculating ROI

With L&D professionals being forced to do more with less, it’s essential that their training programmes present a healthy ROI. Whilst there are numerous ways of calculating ROI, it is mostly a matter of comparing the benefits of the training against the investment placed within the training initiative. As with most things in life, when the benefits outweigh the costs, you are onto a winner.

Benefits/Costs x 100 = Percentage ROI

Anything less than a 100% ROI would represent a loss on investment and would (in most cases) be considered a failure. If Sally spent £200,000 on her training campaign, which delivered organisational benefits equivalent to £450,000, then she has delivered a 225% ROI – a rousing success.

Costs are usually fairly easy to determine. General considerations may include (but are not limited to): the cost of development, the cost of delivery (through a Learning Management System or Academy Platform), and administration costs. Calculating the benefits may not always be so easy. How do you quantify all benefits in monetary terms? For instance – can you put a price on your company’s intellectual capital?

In some fields, you may also be able to calculate whether any additional revenue was generated as a result of training. Perhaps your sales force has undergone training to help them handle objections better and this in turn has helped them to close more sales. In monetary terms, how has this impacted on the organisation? Is the Sales team closing deals quicker before moving on to the next customer? What is the benefit of this to your organisation and can you state this in monetary terms?

Calculating a precise ROI is often an impossible task. That being said, thanks to the bench-marking processes involved in eLearning, it is considerably easier to calculate your training regime’s ROI in contrast to classroom training. Thanks to the pre- and post-test knowledge checks, you are able to monitor the growth of your workforce and then apply your own value to it. Using the Kirkpatrick model of training evaluation and applying sensible monetary values to all benefits linked to the training regime, you can make a good stab at producing an accurate figure.

In our next article, we’ll take a look at all the ways eLearning can help bolster your ROI. Stay tuned!

eBook Release: The Knowledge Arcade
The Knowledge Arcade
Build a thriving learning culture with a customisable mobile learning app that makes changing behaviour and improving performance easy.
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