Read an Excerpt
The Business Calculations and
Business Objectives of e-Learning
For more than a decade, e-learning has been touted as the next big
thing in training. Yet most organizations are still trying to figure out how
to make it work. Perhaps part of the problem is that e-learning is a type
of training or learning in which instructors and students interact at different
times and in different spaces, with technology bridging the timespace
gap and allowing learners to access training at their own pace
and with methods that are convenient for them. A lot of companies
have spent a lot of money creating a lot of projects—but they have not
gotten what they thought they would get out of their investment in this
still new technology.
Meanwhile, corporate training organizations are looking for better returns
than they are currently receiving from their e-learning investment.
While department-level personnel wait for executives to provide vision
and goals, executives want trainers to develop a business plan to
move training into the twenty-first century. Along the way, corporations
spend billions of dollars on solutions selected on an ambiguous direction
that is provided primarily by product vendors. Specifically, corporations
decide on an initiative to move to a new technology or methodology
without understanding its implications for workers or without being able
to measure the effectiveness of its implementation. When employees
choose solutions, they tend to solve only their short-term needs—like,
“How do I get this deliverable off of my desk?” What organizations need
are clear visions, focused goals, and a better way to measure their learning
By the end of this chapter, you should be able to:
• Understand the goal of training.
• Review sample ROI calculations.
• Understand how to measure and evaluate training.
• Identify your audience.
• Understand the biggest mistakes in top-down commands and
• Understand communication within an organization.
• Learn how to get buy-in from trainers, employees, and SMEs.
• Understand where e-learning fits in.
1.1 The Goal of Training
This book takes a realistic and pragmatic look at e-learning. Over the
last ten years, having worked with hundreds of organizations that are
incorporating e-learning into their business practices, I have found
that most training organizations have failed to achieve the expected
returns on investment. I have seen department-level personnel waiting
for their executives to provide vision and goals, while their executives,
who have no practical experience with training, expect the
trainers to develop a business plan to modernize the organization’s
training. This gap in expectations is fertile ground for vendors to
dictate solutions, tactics, and strategies, which tend to benefit the
product providers much more than their customers. Executive-level
personnel go along with the vendor-provided solutions because they
can present such solutions as “progress” to management, and contributor-
level employees are happy just to get the tasks completed so
that their managers stop asking about them. This cozy arrangement
leaves employee training and productivity enhancement as an afterthought
on the priority list. This book speaks to this current state of
e-learning practices, identifying what is effective and what is counterproductive,
and my theories and recommendations are illustrated by
real-world case studies.
The irony of this commonplace approach to e-learning is that
providing training over the Web, rather than as classroom training,
creates more opportunities than people initially think. Many organizations
initially look at moving training on-line to cut travel costs, to
ease trainer schedules, or to provide training where it has not been
available in the past. However,Web-based training is based on a different
model than classroom training. A real benefit of moving training
to an intranet/Internet-delivered model is that it provides an
organization with availability and repetition.
• The always-on availability of the intranet/Internet subtly
changes training. What was once a one-time training event
can now be a corporate resource. Once implemented,
e-learning provides homogeneous training, which is the
same training, on the same day, for all employees.
• From a learning retention point-of-view, an on-line training
event does not need to achieve as high a level of knowledge
retention as classroom training because e-learning can be
accessed at any time as a just-in-time resource. An effective
e-learning model supports just-in-time training so that employees
can refresh their memory when they need to carry
out a procedure or when they run into an unexpected situation.
With e-learning, employees can search a key word and
access a course unit instead of simply having to remember
each unit’s content from top to bottom. In effect, employees
learn how to find and access the information they need. Before
the Internet, with its inherently easy access to corporate
repositories of information, employees found that the hard
part of performing their jobs was finding where the procedures
were spelled out. The benefit of using e-courses over
other methods of providing information, such as wikis or
on-line Word or PowerPoint documents, is that e-learning,
when developed properly, explains concepts and presents
the same information multiple ways, making it easier for
employees to understand new information or to follow new
E-learning also enables organizations to tailor their training to meet
their specific goals. In a manufacturing organization, for example,
the goal is to ensure that each employee is efficient at the handful
of tasks he or she performs. In a service organization, the goal is to
increase productivity by ensuring that employees are knowledgeable
about organizational offerings and that they provide a consistent
experience. Managers undergo training to be able to properly
handle relationships and manage unexpected situations within the
confines of the organization’s culture. Training and, by extension,
e-learning provide management with a tool to create a more flexible
workforce. Employees can be trained to become intelligent
workers who know where to find information rather than to simply
Of course, all these benefits cost money, but the return on investment
is there if you know how to calculate it.
1.2 A Simple Example of Return-on-Investment (ROI)
E-learning is relatively new to most organizations. With any new
technology, service, or change in business practices, management
wants to quantify the cost and savings. Most organizations look at
return on investment (ROI) as the first step in justifying the cost of
a new service.
The ROI calculation for e-learning tends to be very simple. In
most situations an e-learning course replaces classroom training or
training workbooks. The ROI calculation identifies the current
cost to create and roll out a classroom course and compares it with
the cost of creating an e-learning course and purchasing e-learning
For example, the Division of Development and Training in the
Bureau of Human Resources is the organization in the Commonwealth
of Pennsylvania Department of Labor and Industry
that is responsible for managing compliance training and benefits
for all 6,000 agency employees. Employees must receive training
on a variety of mandated topics, including the State Employees Assistance
Program, HIV/AIDS, bomb threats, and the like. Originally,
all of this training was classroom based, delivered throughout
the state for agency employees at various county, regional, and
other local facilities. With tight travel budgets, the Commonwealth
of Pennsylvania was looking for alternative ways to deliver
The Development and Training Division believed that migrating
some of their courses to e-learning would lower training
costs while providing agency employees with effective just-in-time
training. They looked at their records and identified that, on average,
the cost to roll out one training course was $85,000. This
total took into account all the costs for travel, room, material, and
food for both trainers and students. Having decided that not all
courses were going to go on-line, they figured out how many
courses they would convert to e-learning. For example, if they
rolled out five classroom courses in a year, the real cost would be
$425,000. If these courses were moved to an e-learning infrastructure,
the cost would be about $200,000 for the year. Their
savings for the year would be $425,000 – $200,000 = $225,000);
their return on investment would be $225,000 $200,000 =
1.125, or 11.25%.
However, cost varies. Some organizations find that they need
large, centralized databases to handle their training needs, whereas
other organizations find that simpler solutions meet their needs.
The Commonwealth of Pennsylvania went with a simple solution:
With ReadyGo WCB and ReadyGo SST, for an outlay of $2,500,
they saved their department over $400,000 in training costs.
Excerpted from e-Learning 2.0:
Proven Practices and Emerging
Technologies to Achieve Results
by Anita Rosen. Copyright © 2009 Anita Rosen. Published by AMACOM Books, a division of American Management Association, New York, NY. Used with permission.
All rights reserved.