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The Return
On Investment (ROI) calculation for e-learning gives
a measure of value and return on investment for
e-learning training. Experts have opined over the
years that arriving at an accurate Return on Investment
percentage on human capital is difficult, since
e-learning provides many non-cost related benefits
such as reach, consistent message and flexibility.
However, a fair approximation can be shown by carefully
measuring results of training and by linking training
results to the strategic metrics a company uses
to measure its business success.
There are many methods of calculating ROI. Please
browse through the following link to obtain more
details.
http://www.learningcircuits.org/2001/jun2001/Elearn.htm
Broadly, it would appear that the best method to
calculate ROI would be by using Jack Phillip’s
method, given below. (Phillips, Accountability in
Human Resource Management).
ROI = (Total benefits -
Total costs) X 100 = ROI
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Total
costs
Total benefits (money saved on
facility (travel, rental, overheads, teaching aids),
faculty (salary, benefits, fee, travel, meals),
learner (time away from work, replacement cost,
travel and living), training (course development
cost), increased productivity (units produced, items
sold, forms processed, tasks completed), improved
quality (less scrap, less waste, less rework of
product, fewer defects), reduced turnover reduction
in lost-time injuries, reduction in workers' compensation
insurance claims, increase in customer satisfaction
as reflected in an increase in repeat sales)
Benefits also include soft benefits
such as (improved communication, enhanced corporate
image, improved conflict resolution, increased sensitivity
to human diversity, improved employee morale, and
increased employee loyalty). Total costs (development
costs, learner's time at other jobs, materials,
refreshments, facilities, servers, graphics, web
development costs for paper and other office supplies,
advertising, rentals or purchases of needed equipment,
facility usage, and postage, as well as the cost
of your trainees missing work etc.)
Some tips:
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Putting a finger
on benefits and costs may be difficult so
you could start collecting data that is already
available with the organization (finance department
could help).
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Include all indirect fees
and add up any money made from the program.
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While embarking on the project
please bear in mind issues such as meaningfulness
of the metrics collected by you, missing categories,
conversion of data issues, objectives of the
program/organization, what to look for to
get the overall picture.
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Remember that the exercise
needs to be looked at openly and creatively
to examine the real issues that you need to
look at for your organization’s benefit. |
For more insights into ROI calculation on
eLearning please browse through the following links.
 http://www.school-for-champions.com/elearning/roi.htm
http://www.learningcircuits.org/2002/feb2002/moran.html
http://www.school-for-champions.com/elearning/roi.htm
http://www.elearnspace.org/evaluating/roi.htm
eLearning and Cost-effectiveness
http://www.internettime.com/itimegroup/metrics.htm
http://www.learningcircuits.org/2001/jan2001/cross.htm
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