6. Assess

6.2 How to calculate the ROI of your eLearning courses?

Gary Wilber, CEO of Drug Emporium, Inc. said, “The expense isn’t what it costs to train employees. It’s what it costs not to train them. You realize that as you grow.”
This statement aptly explains ROI, Return on Investment. When developing an eLearning course from scratch to its periodic maintenance phase, an organization has to allocate a certain budget. Depending on the nature of the eLearning training, the cost varies from a few hundred to a few thousand dollars per course. ROI is demanded by senior managers who sanction this budget. This is measured in both tangible as well as intangible terms. Tangible terms are the profits and revenue generated through the improved performance of the learners in the work environment. Intangible terms are the improved communication and execution of business protocols by these learners. Senior managers need reports with such details to appreciate the efforts behind an eLearning course.

Justifying an ROI is important, in order to continue developing eLearning courses for your organization’s learning management system. ROI when demonstrated properly leads to a definite intellectual learning organization.

Why is it important?

Organizations determine clear profit margins before investing in a venture or a project. Investing in organizational learning through e-learning training development is a significant investment. ROI for eLearning is measured in short-term as well as long-term basis. The true effects of learning are seen over the years, when knowledge is internalized, realized and shared down the corporate chain. ROI on e-learning enables the senior managers to successfully implement business strategic and operational goals. Any new development, research, patent, copyright or business practice needs to be disseminated through e-learning. The benefits derived from this knowledge generation can be seen in the form of currently implemented business strategies. According to an article in eLearning industry: “In conclusion, it is important to understand that all eLearning programs must be measured in terms of ROI. Not only should eLearning specialists take into consideration the investments such as personnel, technology, content, and hidden costs, but they should also look at benefits associated with eLearning such as flexibility and reduction of travel costs. By accurately calculating the cost of a training program, eLearning professionals will be able to easily justify the investment in the program and decide if eLearning is ultimately a viable solution.”

What to take under consideration while calculating the costs?

What to take under consideration while calculating the benefits?

When it comes to investing in training, some employees and managers still demand justification. There may be some resistance and hesitation to purchase new training, especially if the previous one failed to impact employee performance or behavior. This attitude highlights the lack of a training strategy. Developing and establishing a training strategy for your organization will create fewer setbacks and roadblocks for you. When you have a training strategy in place, selecting or building the desired course is a breeze. However, calculating the ROI (return on investment) requires a bit more planning. When deciding to buy off-the-shelf training or building custom training, use these pointers to justify your ROI:

Building your own training usually saves money.

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