I received this comment on the last issue of Focus Forward, which discussed white papers:

“While reading your last article, I realized that the approach used for User Assistance is exactly the same for training, especially Web-based training. They have a shared emphasis on identifying the audience, determining key job tasks, and writing procedures that integrate job tasks with the features of a system.”

—M. John Dwyer, Educational Consultant

A recent article of Focus Forward explored how to make the business case for eLearning. We examined hard cost savings, hard revenue impact, and soft competitive benefits. Once you consider these factors, you can create a quantifiable, reliable, and compelling estimate of the Return on Investment (ROI) for your eLearning initiative.

This issue picks up the ROI thread and discusses these essential topics:

For New Subscribers

Welcome to Focus Forward, the monthly newsletter of Tim Rosa Associates. If you like what you're reading, stay with us. You can also forward this newsletter to a colleague by clicking the Forward email link at the bottom of this newsletter. If you don’t like what you see, go to the same location, and click SafeUnSubscribe™.

Each issue of Focus Forward features a viewpoint on a critical customer topic. We'll focus on what's happening and what's coming down the line. These are issues that you've told us keep you up at night. Though we work with clients in the technology, healthcare, and financial services industries, we hope the newsletter will be informative to all.

Training Investments on the Rise

Both small businesses and large corporations are investing more than ever before to streamline business processes, increase worker productivity, improve company efficiency, and, ultimately to serve customers better by enhancing the quality of their experience across an entire organization.

According to a recent report published by the American Society for Training and Development (ASTD), the amount of training dollars invested per employee, the share of the workforce receiving training, and the use of learning technologies are all at higher levels than ever before. (1) Based on data from 270 U.S. organizations:

• Training expenditures accounted for 1.9 percent of payroll and rose 8 percent this year to $761 per eligible employee.
• 78 percent of eligible employees received training.
• The total number of training hours received per eligible employee was 23.7 hours. (2)

In addition, the percentage of training time delivered by means of eLearning technologies has been increasing.

• 10.5 percent of training budgets are devoted to eLearning.
• Technology-based learning expenses increased to 4.6 percent of the budget.
• At the same time, the percentage of training time delivered in a classroom declined to 77.1 percent. (3)

So, in terms of spending, despite the events of 9/11 and follow-on recession, training investments are on the rise. What do all the numbers mean? As companies strive to achieve growth with reduced staff levels, teaching new skills to employees and partners is vital to their success. By providing classroom and eLearning training services to employees, customers and/or business partners, you can improve employee retention, increase customer value and drive revenue through the channel to strengthen your competitive position and improve the bottom line.

Challenges with New Technologies

In our knowledge economy, the skills and abilities that make up an organization’s human capital remain its greatest asset. There is a finely tuned awareness of and emphasis on linking learning with performance and business results. Who is charged with demonstrating this ROI? The CIO, IT department, and training/learning professionals share this responsibility. Even though spending on learning technologies (and on training as a whole) is on the rise, training/learning professionals are being asked to train more people, at a faster pace, with less ramp-up time. They are also being called upon to justify in hard business terms each training dollar spent on technology and professional staff.

According to Seth Leibler, CEO of the Center for Effective Performance (CEP), many organizations fail to consider how their technology investments will affect employees’ day-to-day tasks and processes. Employees who do get training on the new technology often learn about system features, but not how the system will affect their daily work or how to use the system to perform their job tasks. (4)

Research indicates that employees use approximately 40 percent of a new system’s features and only the top performers learn how to change their work to accommodate the new system. The remaining employees either adapt the new technology to their old way of doing their jobs, ask co-workers how to complete new tasks, or never learn the most efficient ways to get things done with the new technology.

Best Practices for Successful eLearning ROI

As you can imagine, demonstrating successful eLearning ROI is a daunting task. When our clients embark on an eLearning initiative, we recommend the following best practices:

• Allocate 10 to 13 percent of the total project budget to training. If you skimp on training dollars up front, it can be very difficult to secure these necessary funds once the system is in place.
• Get training/learning professionals involved as early in the process as possible. They should be involved in identifying learning technology vendors, evaluating learning technologies, and recommending the best option for your organization.
• Understand what kinds of customization are available with the learning technology, who produces them (vendor or customer), and how difficult they are to perform. Customizing an out-of-the-box learning technology can often save hundreds of software development hours and thousands of dollars, and make learning easier and more intuitive.
• Determine the primary user groups within the organization and understand their job tasks. Training/learning professionals can define the implications for training by performing the required job analysis and clarifying how different workers’ jobs will change with the new technology.
• Modularize the training solution. By developing training materials that are designed to fit particular job functions, learners will be trained in tasks that are job-relevant, making the most efficient use of their training hours.
• Evaluate the training. By assessing the quality of the training versus on-the-job performance, the organization can find ways to continually improve the training and make sure it addresses learners’ needs and corporate requirements.

While eLearning investments continue to rise in response to the business community’s demands for greater efficiency and reduced training costs, training/learning professionals face new requirements to demonstrate successful ROI and bottom-line results. While these efforts may appear to run at counter purposes, they engender newfound accountability across departments, from Finance and HR to IT, the CIO, and Training. If the various departments can communicate about their objectives at the start, investments in learning technologies can benefit the entire organization, as well as its customers.

Notes

(1) Training for the Next Economy: An ASTD State of the Industry Report, p.4
(2) Ibid., p. 5
(3) Ibid.
(4) “Realizing Return on IT Investments Through Learning”, July 7, 2004 - Emily Hollis

Resources

Tim Rosa Associates is a team of senior-level eLearning experts, instructional designers, courseware developers, usability professionals, and user interface specialists. We assemble our project teams with people who understand your business and the most appropriate learning technology for you. Using our industry-proven 3-D Process—Define, Develop, Deliver—we can develop a range of training materials customized for you, including e-Learning courses, Web- and computer-based training, classroom-based training, self-study modules, and Flash MX movies.

Thanks for reading,
 

trosa@timrosaassociates.com
617.332.7895

Focus Forward Copyright © 2004 Tim Rosa Associates. All rights reserved.