Measuring the ROI of E-learning

It isn’t always easy to prove the worth of digital learning. Here are three companies that learned how to quantify results.

August 8, 2002

 E-learning can have an enormous financial impact on a business, but proving a return on investment can be tricky unless you know what to look for. There are hard and soft cost savings associated with e-learning. Hard numbers are the external factors, such as the cost of flying an employee to training and the hours of lost productivity while the person is off-site. Such expenditures are easy to verify if you have documentation of the amount of money spent on travel and the number of hours employees spend training over a given time period.

But even if e-learning eliminates these costs, Cisco’s vice president of Internet learning solutions, Tom Kelly, says, “To prove the full ROI of e-learning you need to measure its value.” The value of e-learning comes when you link the training solution to the business goals of the company. “E-learning is just a tool, a vehicle to deliver training,” says Cliff Purington, director of learning and development at Rockwell Collins, a manufacturer of communications and aviation electronics in Cedar Rapids, Iowa. “When you connect e-learning to the vision of the company it adds value.” That means doing serious front-end analysis before you even invest in technology, and meeting with executives and business unit leaders to find out what the business vision is and what obstacles may stand in the way, he says. Once you know what the leadership wants, you can determine how training will support company goals.

Unfortunately, the cost savings that reflect that value—increased productivity, a shorter learning curve, improved retention, and greater satisfaction—are difficult to measure. Purington suggests measuring the impact of a course in a controlled environment. When you eliminate external factors that interfere with the accuracy of your measurement, such as a changing economy or management influences, you get a more reliable gauge of a course’s quality, he says.

At Rockwell Collins, he measured the impact of QuickLearns—low-cost, custom-made computer-based courses that use video and text to capture a subject matter expert performing manufacturing tasks commonly used in the company’s plants, such as how to use specialized tweezers to strip thermal wires. The QuickLearn methodology, which was developed by the Performance Engineering Group, an organizational effectiveness and change management consultancy in Santa Barbara, California, uses a rapid development process that enables the instructional design team to complete performance-based training modules in a matter of days for less than $3,000.

To assess the effectiveness of QuickLearns, Purington and Chris Butler, president of the Performance Engineering Group, provided one group of employees with classroom training and the other group with QuickLearns. The participants were then tested on their ability to perform the tasks covered in both sets of courses. Each group scored equally well, a result that proved the learning values of each method were the same, Purington says. The QuickLearns were faster and less expensive to produce and deliver than the classroom courses, were more consistent, and could be taken anywhere at anytime.

And because this model of custom e-learning is low cost and adheres to less stringent instructional design methods, Purington believes that the higher-cost custom e-learning courses have even more impact on the success of the organization. “These courses use a truncated instructional design process and they pass the litmus test for value,” he says. “That tells me that anything created with more rigid standards will provide a greater return on investment.”

Workforce, August 2002, pp. 74-77 -- Subscribe Now!