Contents of Elearning! Magazine - MAR-APR 2012

Elearning! Magazine: Building Smarter Companies via Learning & Workplace Technologies.

Page 21 of 52

The Road to a Positive ROI
Achieving Business Alignment:
BY PATTI PHILLIPS, PH.D., AND JACK PHILLIPS, PH.D.
There remains much confusion about how to measure the return on investment (ROI) of e-learning. Because e-learning is simply another method of instructional deliv-
ery, the process of calculating ROI is the same as with any other delivery method. ROI is calculated by comparing the net benefits of a program to the costs. Instructional delivery, be it face-to-face or electronic, is captured as a cost in the denominator. The outcomes resulting from the use of the content, whether delivered via in-person or electronically, make up the
benefits. These benefits may be based on increase in profit, reduction of costs or avoidance of costs. However, in far too many cases, e-learning investments are justified by simply comparing the cost of the
face-to-face delivery to the cost of electronic delivery of learning content. While reducing the denominator (pro- gram costs) does contribute to increasing the ROI, if the benefits of the e-learning are not as expected, the ROI will be unacceptable to key stakeholders. So the key to ensuring an acceptable payoff for e-learning is to position the learn- ing content so that it drives improvement more than the cost — enough to achieve an acceptable ROI.
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