Introduction to Return On Investment for e-Learning
Hello,
Today is my first post for quite some time. I apologise for that….I have had to complete a few large assignments that have required a lot of my time. But, I’m back.
Continuing on from my discussion about e-Learning, I am about to narrow my focus and concentrate on the issue of measuring Return On Investment (ROI) for e-Learning. This is a topic of interest to me, as I have come from an Accounting Background. In my Accounting frame of thought, any cost to an organisation, needs to be worthwhile in order for it to survive and succeed.
In the article ROI for E-Learning, Moran brings about a few interesting points. Moran, argues that there are many non-cost related benefits of e-Learning programs. Even though this might be true, he argues that organisations will invariably measure the success of a program using quantifiable measures. Moran explains that measuring the cost benefits of an e-Learning program is only a a part of evaluating its ROI.
Moran highlights some of the cost-benefits from e-Learning. They are:
- Room Rental costs are decreased, and in some cases non-existent
- Refreshments costs are non-existent
- Training Material costs are decreased
- Teaching Aids decrease
- Instructor salary and benefits decrease
- Travel and Meal costs for instructors are non-existent
- Time away from workplace cost is decreased
- Replacement Labor cost is decreased
- Learner Travel and Accomodation is non-existent.
Moran, further continues that there are also two other factors that should be included in measuring ROI for an e-Learning Program – Efficiency and Speed.
Efficiency can be defined as the Sum of the Knowledge and skills gained to improve performance divided by the Sum of all the Information delivered. A perfect Learning Efficiency is 100%, where all the information that is delivered is learnt by the learners and are used to improve performance. However, most classroom training do not achieve this rate of efficency because of:
- Single Course Design: Learners skill varies. With most classroom training, a level of assumed knowledge and skill is determined. Learners with higher or lower levels of knowledge will not learn efficiently.
- Poor Course Description: Once the Learner arrives to a classroom, its too late for them to turn back when they find the course is irrelevant to their needs.
- Extraneous Information: refers to the large blocks of information presented in class that are not necessary to the Learners development.
- Quality of Instructor: The facilitator of the course may or may not have the required communication/teaching skills.
With e-Learning programs, these hinderance to efficiency can be overcome as Learners can do the following
- Choose the Course Level they require
- Learners can look to see what courses are about before they choose to enrol
- Learners can skip and not read large chuncks of unnecessary information.
- Content is displayed in a User/Learner-friendly format.
Speed refers to the accessibility of the content to the Learners. E-Learning can enable instant access to knowledge when required. When a Learner requires knowledge to complete a tasks, they do not require it 6 months before the the need or 6 months after it. With Classroom courses, required knowledge is transferred at a set particular time (i.e. one day or one week). This means that the required knowledge may not be available when needed.With e-Learning, desired knowledge can be accessed at anytime with the use of Search Engines, Knowledge Management Systems (KMS) and Learning Management Systems (LMS).
Therefore, ROI calculations do not strictly apply to cost-benefits experienced by the organisation. Factors such as Efficiency and Speed need to be considered as well as they are a significant factor to the bottom-line performance of the organisation.
