Tuesday, November 13, 2007

Proving ROI in Training

The company I work for has a tight grip on the training budget this year and if I want to make eLearning a priority in future budgets I need to make the ROI on eLearning obvious. As you may have seen in the previous post, I am attempting to do this by replacing some content that is currently delivered through instructor led training. By doing that I could easily point to the salary of the trainer and the cost of paying our employees to leave the store and sit through training. This would result in a large amount of money that I could point to as ROI and hopefully this would cause some alarms to go off among the VP’s.

I brought this idea to my supervisor and he likes it but he’s steering me in a different direction. He would like me to create some kind of tool or eLearning course that will help our sales staff with product knowledge because this is a current focus of the training dept. I am happy that he would like to use eLearning for this but it will not be easy to make ROI blaringly obvious in this situation. Because we are not currently spending anything on this training it’s hard to say how much we are saving by delivering it through eLearning. If we already had an instructor led course that covered this subject it would be easy to calculate the cost of the ILT versus the cost of the eLearning version.

Where there’s a will there is a way! I came up with a couple of ideas of how I can prove ROI on this project:

  1. At completion of the project, I need to show how much I improved product knowledge and somehow try and correlate that to a dollar amount if possible. I can see how much product knowledge has improved by developing a baseline of product knowledge at the beginning of the project then compare that to the level of product knowledge at the end of the project. I will develop this baseline of knowledge by conducting some kind of assessment at the beginning and end of the project then compare the results to see how much their knowledge has improved. The assessments will also make it easy for me to see what areas of product knowledge they need more help in. Once I know how much knowledge has improved I need to correlate that to some kind of dollar amount or value. That’s where I’m stuck.

  2. Another way to prove the value of eLearning with this project would be to calculate how much this would cost if we did it through instructor led training then compare that to the cost of eLearning. I’m sure the cost of eLearning would pale in comparison to rolling out an instructor led course. The only problem with this is that ILT may not even have been a consideration for this.

I think it would be best to go with both of these solutions so I can point to all of the positive way’s that eLearning has affected our financial situation. The more pros I have to point to, the better.


Joe Deegan said...

This link will take you to a discussion regarding this posting on the ASTD "Evaluation and ROI" discussion boards.


Anonymous said...

Great idea on ROI, like your blog, lots of work done.

VP- T & D, Intas Pharam,
Ahmedabad, India.

Joe Deegan said...

Thanks Ramky! It's nice to see that my blog has reached as far as India.