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The Business Case for eLearning

By Patti P. Phillips, President & CEO, ROI Institute, Inc. and Jack J. Phillips, Chairman, ROI Institute, Inc.

Patti P. Phillips, President & CEO, ROI Institute, Inc. and Jack J. Phillips, Chairman, ROI Institute, Inc.

Most would agree that any large expenditure in an organization should be connected to business success. Even in non-business settings, large investments should connect to organizational measures of output, quality, cost, and time. Senior executives in an organization, those who fund budgets, are adamant about seeing the business connection. 

"The owners of eLearning have a fear that the business results may not be there, so they prefer not to measure at that level"

Executives realize that employees must learn through technology, using convenient devices. These executives just want employees to use what they’ve learned and have an impact on their work. 

What keeps eLearning professionals from showing the business impact from eLearning? 

Here are four barriers that we believe are myths:

1. Fear of results  
Myth: The owners of eLearning have a fear that the business results may not be there, so they prefer not to measure at that level. 
Reality: You must be proactive and design for the results that you want. 

2. Time 
Myth: It takes too long to do an ROI study.
Reality: It usually takes very little time because there are many shortcuts, tools, templates, and even software to help with this task.

3. Complexity
Myth: The analysis is too complex with too many steps, too much finance and statistics.
Reality: Impact can be captured in a logical flow of data, with mathematics at the fourth-grade level.

4. Not necessary
Myth: Designers and developers suggest the business value is not necessary. We must have eLearning because of its cost and convenience.
Reality: While it is necessary, you must be prepared to show the business value for major eLearning projects. Otherwise, you will lose support, commitment, and funding.

There are two ways to show the business case for eLearning. One way is to measure the learning, following a logical series of steps with five levels of outcomes, culminating with ROI.  The second way is to assume that the outcomes are the same and base the business value on a reduction of costs for the eLearning when compared to facilitator-led learning.

The Evaluation Framework

The most commonly used evaluation process captures data along five levels of outcome, from measuring reaction to calculating ROI. This box shows these five levels and the measurement focus.

Five Levels of Evaluation

eLearning Often Delivers Less Impact Than Instructor-Based Learning

This is unfortunate and controversial, but research tends to validate this. It doesn’t have to be this way. What causes this outcome? Here are five reasons with the actions needed to correct the situation.

1. The manager of participants is usually left out of the process 
The research clearly shows that one of the most important actions to ensure application and impact is the involvement and support of the participant’s manager. Sometimes the manager doesn’t even know that the participant is involved in an eLearning program. 
Action: Involve the manager with specific activities that take a very little time.

2. Lack of alignment to the business.
For major facilitator-led learning programs, it is becoming increasingly common to start with the end in mind. For a program to deliver business results, it must start with the business results.
Action: Start with why, with clearly defined business results.

3. Wrong definition of success
eLearning developers and designers have defined the success of eLearning at Levels 1, Reaction and 2, Learning.  You want participants to see their content as valuable (level 1) and learn the content (level 2). The design has been focused on achieving these levels. From an executive standpoint, success is not at level 2 (Learning), but at level 4 (Impact).  Executives want participants to use what they have learned and have a business impact.  
Action: The focus is on impact throughout the process with clearly defined level 3 and level 4 objectives.

4. Not Designed for application and impact
Reason: When the definition of success is reaction and learning, not much attention is paid to levels 3 and 4. All creative energies, tools, and processes in eLearning should be pushed to the application and impact levels to ensure that individuals use the learning and that there is a corresponding impact.
Action: Design for application and impact. 

5. Loss of a facilitator
Reason: The facilitator can be a powerful force in achieving success. The facilitator can help participants visualize application and see the impact it should achieve. Absent the facilitator, designers and developers have that responsibility now, in addition to designing and developing the program.
Action: Expect success at levels 3 and 4, do everything possible to achieve those levels of success.  

Costs Savings Approach

The other approach to showing business value is to assume the eLearning delivers the same level of impact as instructor-led learning. If eLearning can deliver the same impact with less cost, the business value is the cost reduction for the delivery. Most cost savings analyses don’t take the step to make sure that eLearning has the same impact. While it may be cheaper, it may not have the business impact.

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