Need funding for an e-learning initiative? Think like a CEO - Supplier Savvy

T+D, May, 2002 by Dave Egan

Learning professionals have generally bought into the power of e-learning and learning management systems, but the senior executives who sign the checks often still need convincing. Securing funding for a new e-learning program means understanding the politics of launching big corporate initiatives and making a compelling case to your CEO.

How do you make your best business case? What do you say, and how do you say it? Many great ideas have died on the vine for lack of advocacy, while poor ideas get funded because someone argued well for them. You need to learn what e-learning expert Brandon Hall defines as "C-ese," the culture and language of executives with chief in their titles. "Knowing how to speak C-ese will dramatically improve your chances of getting your e-learning proposals and initiatives approved," says Hall in his 2001 E-Learning Guidebook.

Many training professionals overlook the best arguments they could make to their executive teams. Here are a few approaches; pick the best and tailor them to your cause.

Think big picture. C-ese is different from "learning-ese," the language of learning professionals. Learning-ese assumes that everyone understands implicitly the value of managed, automated learning programs. C-ese assumes that any spending is a bad idea unless it will improve the bottom line and move the company toward strategic business goals.

The single biggest mistake in pitching learning investment to senior management is thinking too much like a training person and nor enough like a businessperson. Training people need to make a compelling business case to win any new funding, and sometimes just to survive. Yet, they too often fail to consider strategic business goals and their role in driving the company toward those goals. Instead, training pros can see themselves-and are seen by others--as a silo-ed function with separate interests, activities, and goals.

The business case for an e-learning program starts and ends with the objectives CEOs care about:

* improving performance and efficiency

* selling more products and services

* lowering costs

* enhancing the company's net worth (in case it's being acquired)

* growing profits

* generating return-on-investment.

Learning professionals must explain clearly to C-level execs, as often as necessary; whom the program is for, who will benefit, how it works, how to get help, and what the purpose is.

Invoke ROI from the start. Put a stake in the ground. You're asking your company to make an ongoing investment of tens, and often hundreds, of thousands of dollars in e-learning courseware and technology. You shouldn't be asking for training investments that won't pay for themselves in some way. The good news is that ROT in e-learning is abundant, and it can indeed be quantified. Examine the benefits you anticipate from your new initiative, and quantify them.

Start with the obvious. E-learning can deliver obvious cost savings by decreasing or eliminating travel and by reducing instructor time and time away from the job. Send one participant on a $500 flight to a $1,000 class with a $500 room-and-board tab, and the cost is $2,000. It's simple enough to calculate real savings from avoiding or eliminating those costs via an online session.

A well-managed e-learning program will compound those initial benefits dramatically by easily replicating training across groups and time zones, making your company's workforce smarter-as would any training-with the added bonus of doing it quickly and more efficiently.

Now, consider the opportunity costs that e-learning lets you recoup. A traditional week-long classroom course would cost a company $120,000 in wages alone to train 200 employees who earn $15 an hour. If delivering the course over the Internet reduced the time investment by 40 percent, a safe assumption, that would save the company $48,000 in wages that otherwise would have been "lost." But that savings is minimal compared to the savings in opportunity costs, such as widgets employees will produce by working instead of training.

Let's say that 200 employees who are participating in training produce 50 widgets a week worth $5,000 each, earning the company $250,000 in revenue. That revenue is lost when they spend all week in a classroom. But if those employees spend 60 percent of that time (for example, three days) learning the material online and the remaining two days on the job, they still have time to make 20 widgets. That helps the company recoup $100,000 in opportunity costs (20 widgets x $5,000) on top of the $48,000 in recouped wages. In that scenario, e-learning pays for itself and very quickly.

And we haven't taken into account the real benefits of more-effective production (such as fewer subgrade widgets rejected) or lower turnover among employees who are now better trained and, therefore, more motivated to stay with the company. Make sure your CEO gets that.

Make tough times work for you. When you talk to your CEO, address the tough economy directly. You might think that you'll sink your project by bringing it up, but don't think your CEO has forgotten about it.