ROI of e-learning: closing in; as companies look to e-learning to help meet their strategic goals, they're seeking ROI analysis. Some of the most valuable measurements can be hard to capture, but we're closing in

T+D, Feb, 2003 by Paul Harris

"We made our investment in Vuepoint without considering ROI," says Morrison. "We went back and said, 'This is a good idea and will pay for itself, but let's run some numbers and see what happens.'" A.T. Kearney discovered that it could develop programs for half of what they used to cost, and that development time dropped to 44 percent of the traditional approach. The firm reported savings of more than US$20 million with more than 4000 days worth of Web-based training within a 12-month period.

Ara Ohanian, CEO of Vuepoint, agrees that improving proficiency and the learning curve are key ROI benefits of e-learning that companies shouldn't discount. Although such benefits may appear soft to a training director, they most definitely are not regarded as such by the executive in charge of any P&L area, he says.

Ohanian cites another example, Vuepoint client, the homebuilder David Weekley Homes. A line manager concluded one day that increased sales would result if the company could improve the satisfaction of its customers in the post-purchase phase of the relationship. After all, that's where most referrals come from, he reasoned. J.D. Power & Associates was enlisted to measure client satisfaction, and an e-learning program was adopted to address the areas of concern with employee training. David Weekley Homes is currently enjoying its most profitable year, due in part to that effort, the company claims. "It began by measuring the particular thing that the business person knew would have an impact," says Ohanian.

Another soft but critical ROI component involves speed. Not only is time-to-marker crucial for most sales organizations, but in this era of frequent product changes, relaunches, and complex product mixes, the rapid transfer of knowledge to the sales channel is extremely vital.

The Hartford Company asked Vuepoint if it could help shorten the six-month period needed to fully train its sales channel about new products. With adoption of the Vuepoint platform, that time was reduced to two weeks. "Speed-to-knowledge may be a soft measurement, but the impact is greater than any travel reduction would ever be," says Ohanian.

Improving ROI

If there's anyone who still classifies performance improvement as a second-tier benefit of e-learning, don't tell that to Brian Carlin. He's president and CEO of Maritz Learning, a Fenton, Missouri-based provider of custom training, e-learning, and performance management for sales and service organizations. Maritz Learning helps companies ensure that e-learning is the means to a profitable end.

Maritz Learning, a unit of Martiz, a US$1.3 billion provider of performance improvement, research, and travel services, views performance improvement as a three-legged stool: 1) training and professional development, 2) motivation through rewards and recognition, and 3) performance measurement. The ultimate goal of the integrated approach is to get "energized competence" out of employees as measured by the approach's impact on a client's top line, not its expense line.