Whether it’s a nonprofit or a for-profit business, financial metrics generate a healthy and meaningful debate focused on quantifying the actual advantages of an e-learning initiative. A study concluded in April 2004 at Cisco shows that for every dollar Cisco spent on one specific e-learning initiative in fiscal year 2003, the company received $16 in value.
The study looked at the Partner E-learning Connection (PEC), a portal dedicated to delivering learning content to resellers for minimal fees. The study was based on an annual survey of resellers designed to identify the use of e-learning and how that use affects business. When this study was conducted, the PEC was in its fourth year of operation and was cited by resellers as a significant factor in increased sales.
So, what led this e-learning program to achieve such attention-getting financial performance? Here are just four of the practices:
- E-Learning as a Conscious Investment: Financial projections, user feedback and evidence of productivity gains in the reseller channel were key indicators of success in the beginning. Based on this early success, senior management in three organizations made a conscious decision to increase investment in this initiative.
- E-Learning Covers Assessment and Communication: Training is only one aspect of e-learning at Cisco. E-assessment and e-communication complete the regimen. Assessments, such as online tests and certifications, drive learners to content by instilling accountability in the learning process. E-communication tools that support collaboration, communication, information and knowledge sharing on a day-to-day basis allow individuals to weave learning into the fabric of their day.
- E-Learning Aligns With the Sales Process: E-learning efforts at Cisco have gained immense acceptance internally by aligning with the sales process—both internal and partner. If the salesforce or the sales channel ends up being more productive through the use of e-learning, then not only is the recurring metric of increased revenue always on hand to show the value of the project, but also a host of advocates are readily available to offer testimonials. Training managers often express frustration with cost-saving numbers from e-learning because they believe those metrics are a one-time phenomenon. They believe that a financial benefit that was recurring each year would be a more valuable metric to make a case for continued support of e-learning. What better metric than product revenue? It’s annual, starts from zero each year and gets the attention of the decision-makers.
- E-Learning Offers Economies of Scale: Once the technology infrastructure and content expertise are in place, e-learning remarkably lowers the incremental cost of reaching new learners. By exploiting the classic technology advantage of economies of scale, offerings are extended to a larger base of learners. For organizations like Cisco, with a large number of employees as well as reseller partners benefiting from e-learning, the overall productivity impact multiplies even more.
A sound e-learning business plan with financial metrics should also be backed by a commitment to make it happen. Will that turn a training group into a small profit center with unusual partners throughout the organization? Might that change your job from one that focuses on learning to one that focuses on the business of learning? Might that get you to begin viewing content as “product” and learners as “markets”? Maybe. No one ever said that change agents are insulated from the change they cause.
Catalyst is the word (and the role) that comes to mind.
Tom Kelly is vice president of the Internet Learning Solutions Group at Cisco Systems Inc. Nader Nanjiani is marketing programs manager of the Internet Learning Solutions Group. Contents of this article will also appear in “A Business Case for E-Learning: Justify Your Network Investment” from Cisco Press in 2004. E-mail Tom and Nader at email@example.com.