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The ROI of e-learning

This article appears in the issue July/August 2009, [Vol 18, Issue 7]
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Online learning can earn companies a positive return on investment (ROI), and it can do that quickly. Smart companies provide employees with learning opportunities to keep skills and knowledge razor-sharp so employees produce quality work. In the past, employees typically learned in classrooms led by expert instructors. But that scenario has changed.

While face-to-face instruction offers the opportunity to interact in person with the instructor and classmates, and may be the first choice of most people, it is not realistic in today’s fast-paced global environment—technology opens up new learning options.

Self-paced learning, virtual classrooms, videoconferencing, informal learning through social networks and virtual worlds make up a dizzying array of environments for learning. Some are more instructor-led, and others are totally learner-driven. They are also cost-effective once the technology is in place and the company culture embraces other learning patterns.

Outside of subject areas where face-to-face interaction is necessary, recent research indicates that no significant differences exist in the effectiveness of learning through classroom, online or self-study. However, it is important to focus on a few key communication media and tools to ensure that this is the case.

Carefully developed graphics and visuals can help better explain new concepts. Visuals, graphics, simple simulations and even short videos contribute to a more visual approach to understanding concepts. That, combined with the instructor’s audio help, ensures good learning. In fact, some animated sequences in e-learning would be difficult to duplicate in the classroom.

Interaction through blogs, wikis and discussion boards can help learners see other points of view. The danger of isolation of online learners is mitigated by a plethora of interactive tools used to reinforce the learning. Although those tools are just beginning to be "wrapped around" existing formal learning, expect future informal learning to play an important role in corporate learning.

And, be sure that content is available to review multiple times. The opportunity to access specific sections of the learning content as many times as necessary to grasp key concepts provides a better overall understanding of the topic. Also, choosing the best time to learn puts the learner in a better frame of mind to learn.

While it may be tempting to assume a shift to e-learning is only about cutting costs, an over-reliance on the financial ROI justification risks compromising the current learning program’s effectiveness. Companies must objectively evaluate the financial impact on business when considering the adoption or avoidance of e-learning. E-learning can help address many critical business problems like supporting global employee learning, decreasing travel and expenses, and increasing productivity in a competitive environment. But companies need to do a careful assessment of the nature of internal and external learning at all levels of the business, especially the benefits, costs and risks.

Key benefits

Organizations implementing e-learning can expect several benefits that help drive business forward due to knowledgeable and well-skilled workers. Those advantages include competency speed, flexibility, consistency, repeatability and travel reduction. Learning directors can quantify the scale, timing and duration of those benefits by considering one or more key metrics and then calculating the value to the organization of improving those metrics over time.

Self-paced e-learning allows learners to assimilate content at their own speed—often 20 percent to 50 percent faster than in a classroom. If they understand a concept well, they can skim online material. If a module is difficult, learners can slow down, review material a second time or access online help. Search allows employees to find just the content section they need to reach competency faster and start producing sooner. Employees in global offices can fulfill course requirements in days rather than months using e-learning because of the reach and scalability of the technology.

Another benefit is that employees can learn at home, in a coffee shop, on an airplane or at any spot around the globe. Because of the ubiquitous nature of the Internet, they can access learning any time that fits into their schedule. For many employees, determining their own study time makes learning possible because their life circumstances don’t allow a traditional classroom approach. In fast-paced environments, learning on the go gives learners the flexibility they need.

The consistency of e-learning always delivers uniform content. Subject matter experts and instructional designers create content using adult learning principles, graphics and interactive media to provide the best learning experience and achieve learning objectives. And with e-learning, there’s no question as to whether a group at one location received the same learning as those at another location. All learners receive the same consistent content. Translations also provide content in learners’ native languages.

Also, although e-learning’s upfront costs are high depending on production values, content reuse makes it very cost-effective. Even with updates, XML technology enables developers to change specific learning objects, leaving the rest of the content untouched. Learners download course material, eliminating hard-copy duplication. Self-paced learning and recorded virtual classroom sessions are under user control, so learners can repeat sections they did not understand. This wouldn’t be possible in a classroom lecture where learners hear content once and hope they have taken good notes.

And finally, travel reduction provides additional savings. Auto and air travel with hotel and meal expenses for instructors and participants are prohibitive. Facility rental, technology connections and materials costs add more expense to face-to-face training. Some travel is necessary depending on circumstances, especially in a blended training, but the travel is less frequent and for shorter durations.

Key costs

Organizations that implement e-learning can expect certain costs, especially as they begin to ramp up the e-learning program. Those include additional technology infrastructure and new applications, in-house course content creation, acquired content vendor courses, additional staff and a PR/training program for employees so they understand and feel comfortable using the new learning approach.

The learning management system (LMS) is essential to manage e-learning. Today many organizations use a software-as-a-service (SaaS) e-learning implementation. That means the company pays a yearly fee for the LMS based on the number of users. The LMS resides with and is managed by the vendor. The yearly LMS cost includes maintenance and most upgrades. Organizations configure rather than customize their business processes because extensive LMS customization is not part of a SaaS strategy.

Each organization selects from a handful of virtual classroom vendors. In some cases the LMS vendor or content vendor offers a virtual classroom application. An organization can also use its existing Web conferencing provider if the application offers enhancements for virtual learning. The cost is based either on a fee for each named organizer (instructors) or on the number of concurrent users who will receive virtual classroom instruction at any given time. The virtual classroom application and the SaaS LMS connect through APIs.

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