Justifying an Investment in eLearning versus ILT
Is your organization thinking about replacing some of its Instructor-led Training (ILT) with eLearning? If so, you may be charged with justifying the investment. This information is intended to help you think through a lot of the potential costs and variables you may need to consider. It is not intended to provide a “one-size-fits-all” solution as each organization and situation is unique. You will likely be best served if you use this paper as a guide and create your own analysis.
Organizations often want to justify their proposed investments in eLearning, yet few have quantified the cost of their existing training programs. Therefore, LeanForward has developed this four-step guide to assist organizations in identifying and quantifying their “hard” and “soft” ILT costs. Once you understand these costs, perform the exercise again for the proposed eLearning so you can calculate how much eLearning can save your organization.
Note that the ILT costs will most likely be associated with your staff’s time while the proposed eLearning may be easier to quantify if you plan on outsourcing the work. In addition, you may be able to streamline the process by marking some items as equal if you think the cost will be the same for ILT and the proposed eLearning.
STEP 1
Calculate how much time your personnel spend developing your ILT and the proposed eLearning programs—and remember to factor in your full labor costs including benefits for each individual. Be sure to include time spend developing the initial training programs as well as time spend updating the programs.
Subject Matter Expert(s)
Trainer(s)/Instructional Designers(s)
Graphic Artist(s)/Multimedia Designers
Management
Consultant(s)
Others? Might include Peer Review, Legal, Quality Assurance, etc.
STEP 2
Calculate your “hard” development costs for the ILT as well as proposed eLearning, such as…
Printed materials such as workbooks and hand outs
Specialty software (e.g., authoring or multimedia software) used in material development.
Training the trainers – budget allocated to formal education, seminars, reference materials, etc.
STEP 3
Quantify how much it costs you to deliver the ILT and eLearning—factoring not only the cost of the actual training session, but surrounding costs too:
Total ILT and eLearning hours: length of sessions times the number of sessions (hours/days of ILT x number of sessions). Be sure to factor in ALL sessions as trainers often have to repeat these for new hires or employees who miss the initial training due to scheduling conflicts or illness.
Calculate the cost of trainer’s time
Calculate the cost of attendee’s time noting the eLearning tends to cut the ILT time in half
Cost of having a consultant deliver the training if they are used
Cost of trainer’s time spent preparing to deliver the ILT per session
Any ILT travel related costs
Labor cost for trainer, employees and possibly a consultant
Hard travel costs for trainer, employees and possibly a consultant
Opportunity cost of trainers and employees’ time such as lost production
Cost for facility where ILT occurs
Cost of any equipment used during the ILT
Cost of any refreshments
STEP 4
How much is it costing you to administer and document your training? Calculate:
· Time spent coordinating the training
· Time spent documenting your training activity
· Time spent tracking ongoing training
· Time spent analyzing your training
Every organization is unique so there may be some additional costs not captured here, however we hope this questionnaire helps you quantify the costs of designing, developing, delivering and documenting your ILT programs.
If you have any questions or would like assistance working through these items, please feel free to contact us for a free training cost analysis.