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Developing an interesting and successful eLearning program is both rewarding and challenging. While there are many positive aspects to building an eLearning project, there are also difficulties associated with determining exactly how much you are saving and making. Figuring out the return on investment (ROI) of an eLearning program is integral to understanding its overall success, worth, and business impact. ROI is the most widely used method for calculating the financial impact a project has on a business. In other words, ROI is the formula used to determine whether or not an eLearning project was successful.
In order to do this, there are a handful of factors you must consider. There are both tangible costs and intangible benefits associated with an eLearning project, both of which are important. Calculating the tangible costs is easy, as long as you know what type of data you should be collecting. Additionally, you must look at the hard and soft cost savings of your project in order to get the full picture regarding your ROI. Below you will find detailed information on each of the factors that go into figuring out the ROI for an eLearning project, which should help you understand the bottom line for your company.
While the tangible benefits of an eLearning project may seem straightforward, you must be sure you are covering all your bases and collecting data from a handful of areas in order to accurately determine the ROI. Logistical costs, development costs, and opportunity costs are all tangible factors that must be analyzed.
While eLearning programs definitely cost less than conventional classes, there are still logistical costs associated with setting up an eLearning program. When determining the logistical costs it is important to look at the number of class participants, travel time for each student, required classroom materials, cost of instructor, and number of classes per year.
Development costs refer to the materials needed to teach each class and the amount spent on the instructor (only applicable if you are hiring outside of your company). It may be a good idea to compare the cost of hiring an outside instructor with training an internal employee, you may find that one fits into your budget better than the other.
You will assess your opportunity costs based upon what type of eLearning program you have and who your audience is. This can be difficult, but just keep in mind that the more instructors or customer service reps you have, the more it will cost. Opportunity costs are closely related to soft-savings, as customer satisfaction is a key part.
Beyond the tangible benefits, you must look at the intangible costs, or soft-savings. Measuring the ROI for an eLearning project can be tricky because there are certain 'soft-savings' that can be hard to determine. Soft-savings refer to the aspects of your project that are more difficult to place a monetary value on, such as increased customer satisfaction, staff reduction, shorter training time for employees, productivity improvement, and employee satisfaction. While harder to measure the ROI on, the soft-savings are what make or break an eLearning project and are therefore extremely important to consider.
On the other hand, 'hard-cost savings' are easier to identify and are similar to the tangible benefits of a program. Hard-cost savings associated with eLearning projects include shorter travel distance for your employees, fewer trainers, and less work-interruption.
When calculating and measuring the ROI of an eLearning program it is essential to have an open mind and look at all possible factors. From the easy to identify tangible benefits of eLearning to the soft-savings that are more difficult to place a monetary value on, you must look at it all. If you do so, you will have a much easier time understanding and measuring your ROI, which will give you a better grasp on your business as a whole.