Interwise, a collaborative tool that brings the human element to e-learning, claims that Avanade (Microsoft/Accenture venture) saved $1 million in travel costs last year. Digital Think states that the Charles Schwab investment e-learning product it developed converts 40 percent of its users to customers. SmartForce claims that Unisys saved $8 million with its program.
So how do you get tremendous cost savings and better ROI from your e-learning? Kim Woodward outlines Saba’s economic value in five dimensions:
- Retention: The average cost of losing an employee is $50,000.
- Speed: If it takes one month instead of three months to ramp the sales force to sell the product, you make more revenue, faster.
- Competency: Effective professional services training can reduce ramp-up time from 90 to 45 days, adding thousands in billable time per consultant.
- Compliance: Failure to produce government agency compliance records results in a fine of $10,000 per incident. Reduce or eliminate such incidents through training.
- Alignment: Failure to align staff and partners with company goals impacts customer retention. Train to increase retention and reduce lost revenue.
Federal Express has succeeded with e-learning for Sales. Their Web-based training primarily supplements live training with a couple of notable exceptions. FSO (Field Sales Orientation), is part of an extensive, 90-day, new-hire-training program. FSO is self-paced and designed to be used three weeks before the new sales rep begins work.
Sandra Marshall, director of Sales Training, said, “By the time classroom-based, on-site training begins, all students have arrived at the same level.” Marshall credits low turnover as a measure of success and requires all classroom-led training to include e-learning. “We might lose about nine now, versus 85 over the same time period,” she said.
Pennzoil-Quaker State Company hired e-learning solutions provider Syntrio to train all regular computer users at its Houston headquarters and nationwide on ergonomics safety, according to Steve Henderson, director of Marketing.
“Measuring the return on Pennzoil-Quaker State Company’s investment was immediately quantifiable,” said Mike Schieffer, Pennzoil’s vice president of administration. “Each incidence of carpal tunnel syndrome costs an average of $25,000 dollars in medical, disability and lost productivity costs. Preventing only a few instances of repetitive stress injury covers the cost of implementing ErgoNet to Pennzoil’s employees.”
Additionally, Pennzoil was able to train employees nationwide without incurring any expenses or lost productivity due to travel time.
While the cost savings are divine, some e-learning initiatives don’t deliver on the promise because training wasn’t the solution to begin with, or it doesn’t capture the learner. Ted Manning from Allen Interactive suggests that you first determine if training is the answer to the given set of problems. If you can customize the training to fit the business objectives, you increase the chances for success.
In addition to creating a tight relationship between your business objectives and e-learning, it’s vital to take human factors into consideration. If you don’t motivate the learner, you won’t reach your goals. Robin Weber, SSO Field Development and Training at Hewlett-Packard, makes Web broadcasts lively by limiting the length and by using a talk-show format (moderator and multiple presenters), interactive polling functions and live Q&A. Interwise’s evangelist, MaryAlice Colen says they visually share information on grease boards over the Internet with real-time participant interaction.
Looking at how most people retain and use information, a multi-modal approach to delivering information is most successful. E-learning alone may be fine for compliance and IT certification, but blended learning is the magical combination, allowing for increased motivation, retention and integration of knowledge in the workplace to improve performance, products and interaction among peers and with customers.
Differences in subject-matter knowledge and learning styles (sales people don’t learn the way IT people do) are sometimes obstacles in customizing e-learning. FedEx’s sales management candidates serve as a mentor group to help design e-learning and represent “the voice of the customer” to marketing product development.
FedEx’s economical online sales training has delivered ROI mainly through significant travel cost savings, reducing them to 20 percent to 30 percent of previous levels. “That adds up for 3,200 people,” said Marshall. . They keep costs low by relying on internal resources. While most companies pay from $80,000 to $500,000 for a learning management system (LMS), FedEx got a head start with an internally created proprietary system. All training, online and live, is created and delivered by six in-house, instructional designers and one Flash/graphics expert. According to Pete Potter, manager of Sales Training and Development, “FedEx’s entire incremental cost for Sales’ Web-based training has been only about $40,000 over three years for servers.”
Buckman Laboratories, a manufacturing-chemicals company, relies on training the customer for their core value proposition and positioning as a customer intimacy innovator. Sheldon Ellis, vice president of the Learning Center, said, “Some customers no longer pay us for chemicals, they pay for a successfully finished product instead.”
Buckman is their sole source, providing blended training, consulting, best practices as well as managing virtually any aspect of their business that relies on chemicals. They can afford this radical, results-oriented, business model in large part due to cost savings and optimization that come from a significant commitment to providing blended learning and knowledge management (KM) to customers. They measure success in profits- the better they’ve trained the customer’s staff, the less chemicals they use, and the more Buckman makes. “Our success is predicated on their success,” said Ellis.
Buckman also uses e-learning directed at prospective customers as a market penetration strategy. One e-learning series they sponsored about advanced coated papers not only ensured them high visibility as an expert and innovator, but also helped them acquire a new high-end, paper customer worth many times the $200,000 sponsorship investment..
Buckman has three instructional designers with measurement training and a Ph.D. specializing in measurement. While you don’t need a Ph.D. in measurement to succeed in your learning initiatives, you might want to follow their astute method of tailoring the metrics criteria per the business objectives instead of trying to do a one-size-fits-all approach. Most courses have effectiveness surveys, like “Did you like the course/team/tools/process?”, and about 40 percent are followed up six months later for retention and for impact: “Did you (or your boss) see a difference in your job performance?” However some courses, like safety behavior, require extensive measurement and high recall results.
Accenture has the daunting task of training 10,000 to 14,000 new employees on an annual basis. Accenture chose Docent as a learning systems solution to educate new personnel about “just-in-time” performance assets that are market-driven and very time-sensitive. Within three weeks of launching the learning initiative, there were 800 users, and Docent was set to add all 71,000 employees for other learning initiatives to the learning system within months.
“We think the e-learning infrastructure is absolutely paramount to the effectiveness of our courses,” said Jill Smart, partner, Accenture. “One of the reasons we chose Docent is that the system is so highly customizable.” The learning will allow the teams to focus on skill sets specific to each client scenario, allowing more time to spend with the clients. Ultimately, Accenture expects to increase speed to market, enhance training access and the user experience and allow for more capabilities from Docent’s systems.
Like customer relationship management now and enterprise resource planning before it, e-learning is a tool for a complex, cross-functional, business problem fraught with human factors. We’d be foolish to repeat the same mistakes and not learn from the costly lessons of implementation. To keep the technology from wagging the business, it’s critical to apply what you already know about CRM to blended learning, but there’s more:
- Align e-learning goals with business objectives, and measure accordingly. This sounds obvious but is rare in actuality. Your goal is not training sales people on the new product, it’s making sales able to sell more. Design training about selling (with this new product), not about the product.
- Pay attention to human factors. Are the training and the user interface business-objective-appropriate, including customization or personalization if needed? Also, be sure to address cultural, political, stylistic, cross-functional and process obstacles to success.
- Customize the training to different audiences. This doesn’t mean tailoring to just the company or industry, but to a narrower segment: a department (e.g., telemarketers versus accountants), a functional group (CEOs versus admins) or a customer segment.
- Pre-assess the learning styles of your individual learners. Identify what motivates them, what they value in what you are teaching, then personalize, personalize, personalize.
- Think of it as one-to-one e-learning. Think ROI. Ask your team how it will really measure success- define the goals for success together. Ask your learners what they want to get out of the training course. Find out what kind of follow-up program they prefer (e.g., drop-in, drop-out, practice drills, monthly refresher courses, etc.)
- Define a specific set of metrics that make sense so that the data produced yields pragmatic, usable information for visible results.
- Obtain senior management and cross-functional support through new forums, committees and internal promotions and other communication strategies.
- Deliver, measure, adjust, improve and measure again; reiterate continually until the business objective is met. Jennifer Bulka and Beatrice Blatteis are consultants and authors on marketing, CRM and training.