Today, most organizations use eLearning as a significant part of their training delivery. As traditional eLearning moves towards mobile learning or mLearning and provides learners the flexibility to learn on the device of their choice (notably tablets and smartphones), the eLearning adoption is gaining further momentum. eLearning and mobile learning provide several benefits to organizations. However, the focus is now shifting to determining its impact and the Return On Investment or ROI of online training.
In this article, I will begin with a quick summary of the benefits that eLearning offers, what ROI is, and how you can measure it. I will also outline the ROI methodology we use.
I am quoting extensively from my earlier article Return Of Investment (ROI): Are You In?. This article had originally appeared in CrossKnowledge’s Learning Wire Blog. Do refer to this article. It also outlines the measures to maximize the ROI.
Over the last two decades, most organizations have made investments in eLearning primarily for the following benefits:
While the eLearning advantages are well accepted, increasingly organizations are seeking ways and means to determine its impact on learners as well as on business. Let’s see what Return Of Investment (ROI) is and how you can assess if your eLearning or online training initiatives are generating the required ROI.
ROI is the return on investment that an organization makes (ROI = Gain or Return/Cost). It can be determined through two factors namely the Investment made (or cost incurred) and Value/Gain accrued (or return).
A successful eLearning initiative should be able to demonstrate gains that are more than the investment.
Costs are fairly easy to define and would normally include the cost of eLearning course development as well as associated costs of team members (including teams that are associated with the development process and Subject Matter Experts).
Typically, there would also be associated costs of the supporting delivery (Learning Management System, Administrative cost of managing the initiative, and other related infrastructure required for delivery).
Determining the “value” or “gain” is far more tricky. We nail this by looking at the gains for the organization as well as for the learners.
Most of us are familiar with Kirkpatrick’s model of evaluation. In today’s context, adding Phillips’ ROI calculation as the fifth level makes this framework even more useful and relevant. By using Level IV evaluation data, we can convert the results into monetary value. Then we can easily compare them against the cost of the eLearning program and determine the ROI.
To give you a sense of how it can be practically used, let me summarize the approaches we typically adopt:
I hope this article was useful in understanding the ROI definition and more significantly, what ROI methodology will enable you to measure the ROI of online training. At EI Design, we do workshops that can enable you to adapt the standard ROI methodology to your organization. Do reach out to me if you need further details.
I will be sharing tips on how you can maximize your ROI in my next article.
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