Money Talks
It’s true what they say, isn’t it? Money really does make the world go round. If you’ve been working in Learning and Development for a while, you’ll know that there’s always ‘The Money Talk’ involved in planning, creating and rolling out a new L&D program.
I talk to a lot of organizations at various stages of planning their L&D eLearning strategy. Some have drawn up a budget; others aren’t quite at that stage yet. But there are some things that all companies need to get their heads around to determine if the organization is ready for eLearning.
Firstly, here are some questions about money you need to ask:
- Have you prepared a proper budget that includes all the costs?
Don’t forget to include all the extra things associated with creating eLearning modules that might be easy to overlook at first – things like initial equipment costs and set-up fees, for instance. - Have the invisible costs such as salaries, staff time, overheads, etc. been taken into consideration?
This is pretty self-explanatory – make sure to include all costs, even those which aren’t so obvious! - Has management seen your budget and do they know what it entails?
You’ve got to be clear, concise and open with the budget and projected return on investment, otherwise management can’t know what they’re really agreeing to. - Is there enough money for this initiative?
As much as you may want to move forward with eLearning, if the money isn’t there you cannot consider your organization ‘eLearning-ready’ – you’ll have to go back to the drawing board, request a larger budget and push for more. - Has the money been formally approved?
It’s great if there is enough money in the organization… But has it actually been approved for use in a new L&D program? If not, you’ll clearly want to hold off! - Will the money be released at once or will it be tied to milestone achievements?
Sometimes money is held back while organizations wait to establish the success of a pilot program. If this is the case, do you know what truly constitutes success? - And do you agree with the milestones?
If you don’t think the milestones are achievable (i.e. management is asking for a 90% increase in sales knowledge before they agree to release the rest of the money), you will need to push back to a more reasonable level of success.
Budget Concerns
When it comes to the budget, here are few things you need to think about and work out the costs for:
- Any computer systems you need to acquire
- A Learning Management System (i.e. software; how you are going to distribute and monitor the eLearning)
- The server system, domain name, hosting costs, etc.
- Software products, such as graphics editor, video editor, authoring tool, etc. to actually create the eLearning modules (no, Powerpoint is not sufficient! You want to teach your learners, not bore them to death!)
- Training your team
There are a few options here – either you can go at it solo and do it all yourself, or an eLearning service provider can step in and provide support and service on both the software and the tools side. In fact, good Learning Technologies companies will also train the designated Learning Management System ‘admins’ on how to use the system, so that’s #5 sorted, too.
Return on Investment
Creating a budget isn’t the end of the eLearning readiness plan, though. It’s not enough just to plan how you’ll use the allotted money – you also need to make sure you’ll see some of it again one day!
I’ve mentioned the importance of securing return on investment in previous articles, but it’s so important I’ll say it again!
When your management spends money on something, they will obviously expect a return on their investment. Therefore it’s vital to have a defined ROI that they can monitor.
Getting an ROI from eLearning is pretty similar to securing an ROI from classroom training because they have the same purpose: to improve productivity, increase skills and, consequently, reduce costs or improve profits.
But, actually, eLearning can generate a better ROI than traditional classroom training. This is because organizations save money on booking venues for training, travel expenses, workshop leaders and the cost of missed sales.
Measuring Return on Investment
So, once you’ve got your budget in place, you’ll need to consider the ROI you will be able to secure to see if the numbers work. Here are some factors that contribute to an eLearning ROI:
- Increased productivity – measured through production, sales or other internal KPIs.
- Reduced wastage – measured through cost reduction data from the accounts.
- Reduced training costs – how much money will the company save by implementing eLearning? One thing to be conscious of here is that it isn’t possible to compare previous classroom training costs with the cost of the first year of eLearning. This is because there are one-off costs involved with implementing an eLearning program, so the training costs are bound to appear very high during the first year. However, eLearning is a fantastic investment – the initial costs soon begin to pay for themselves when you take into account the reduced costs of putting employees through classroom-based training. Therefore investments in eLearning should be taken partially and depreciated each year against the savings made on classroom training and other productivity parameters set. Sorry, but that’s the way it has to be!
- Increased employee satisfaction – ooh, your learners will love you! They won’t be dragging their heels or putting off signing up for a classroom training event. No, they’ll be champing at the bit to enroll in eLearning courses that can be done remotely in their spare time! Higher-quality training usually leads to increased employee satisfaction, which can be measured directly through attrition figures or indirectly through feedback and internal surveys. If learners love you, they’ll let you know!
So, what do you think? Is your organization ready for eLearning?
