Cheif Learning Officer Solutions for Enterprise Productivity

ROI Is More Than Justification

 -  12/3/12

When done correctly, ROI generates key decision-support metrics for learning and aligns thinking with business objectives.

In today’s business environment, learning programs that are unable to prove that benefits exceed costs are unlikely to survive.

In March, global training company ESI International conducted an ROI study, “Training ROI for the Project Community,” with more than 30,000 respondents, which demonstrates that the benefits of calculating ROI extend beyond the numbers to include expanded decision-support capabilities and an accountability mindset.

ROI is not a number; it is a story that supports the idea that value is being created in the business. Business stakeholders need to see where and how value occurs because only then is an ROI calculation actionable. Specifically, they need to understand how learning affects job performance and where business results are impacted. Answering these questions makes the case for learning, provides key measurement milestones and shifts the learning and development culture to align with business goals and objectives.

Building Decision-Support Metrics
Getting to ROI is like building a court case. Arguments are made, facts are presented and ultimately a conclusion is drawn. The first step in proving ROI is to map out a chain of logic that supports the argument and provides quantifiable evidence of value. Decision-support metrics are one benefit from this process. The value chain created in the ESI study proved:
• A high-quality learning event took place.
• Students learned the content.
• The learning improved job performance.
• That improvement had a positive impact on the business.
• That impact resulted in a financial benefit to the company.
• That benefit was greater than the cost of the training.

ROI cannot be credibly calculated without showing value along this chain. In the ESI study, each of these steps was quantified by surveying students and their managers.

Quality indicators are calculated consistently in most training programs to determine satisfaction with the instructor, content, learning environment and overall program experience. Although it is important to understand if an instructor is not performing adequately or if the content is missing the mark, quality measures do not go nearly far enough to determine effectiveness. The next step, which is often overlooked, is to determine whether the student gained significant knowledge and skills from training.

Article Keywords:   ROI  


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