Justifying e-Learning Stephen W. Watts Northcentral University

Justifying e-Learning E-Learning improves our business performance (bottom line) in five ways: Improved Worker Performance Lower Total Costs Better Quality Learning Better Learning Service Quicker Delivery Response In this presentation we will demonstrate the benefits of the e-learning initiative to XYZ (a pseudonym for an actual US-based Fortune 100 Technology Company) by how it has already positively effected the bottom line, and will continue to expand the ability to do so in five separate ways. We will demonstrate e-learning has already improved the performance of workers where it has already been implemented. Further, it will enhance performance company-wide as the initiative continues to be implemented as originally envisioned. We will demonstrate e-learning has already lowered the costs of training. In addition, because of the economy of scale e-learning brings the cost savings to XYZ in coming quarters will be even more substantial, as the initiative is implemented as scheduled. We will demonstrate learning and performance go hand-in-hand; trained, professional employees who have the latest information at their fingertips are able to work smarter, faster, and with more dedication than do employees without systems to support their efforts. We will demonstrate that as the e-learning initiative continues to be implemented, our ability to deliver necessary learning to employees when and where they need it will continue to grow; while minimizing the time employees will need to be away from their jobs. We will demonstrate the full implementation of the e-learning initiative results in several deliverables. Among these deliverables are quicker development, and delivery of tailored information and training to meet any current or perceived organizational need. These benefits are especially helpful during periods of crisis or hardship, so the company and its employees can be responsive and ready to capitalize on any opportunity.

Performance Improvement Current success stories The continued plan: Knowledge Management solutions Training solutions Over the past year we have been working on the e-learning initiative we have had a number of success stories that demonstrate the viability of our overall implementation strategy. These successes have taken the form of several pilots that we have run in various departments of the company. These contributions to performance improvement are the initial focus of a corporate wide plan to improve employee work performance that takes two forms: A knowledge management system (KMS), and additional training solutions. A knowledge management system will convert all existing white papers, best practices, tech manuals, help documents, and job process descriptions and tips into accessible knowledge. By ensuring that current and vital information is available at the point of need we can ensure the continued improvement in worker performance and knowledge that will positively effect the bottom line. Training solutions are in the works to convert our current almost total reliance on in classroom training to a more graduated and specific approach. Through our pilot program we have evidence that e-learning is as effective as classroom solutions in most areas. In fact, e-learning solutions tend to be faster, and have lower total overall costs. These items are covered later in the presentation. By graduating our courses we can determine the presentation needs of each class at an architectural level, and determine whether it makes sense to frame the training in the classroom with an instructor, online with an instructor, as a form of self-paced learning, or as part of the KMS. In this way, we tailor the learning to the specific needs of the employee; distributing the knowledge to improve and enhance worker performance in the fastest and most effective manner possible.

Lower Costs Current success stories Self-Study CD-ROMs (SSCD) Training on Demand (ToD) Live Virtual Classes (LVC) Knowledge management system (KMS) In the previous slide we indicated that e-learning solutions tend to have lower overall costs associated with them. Although we have not fully implemented our e-learning strategy, over the past year we have had several pilot programs that have given us specific facts regarding the ability of e-learning programs to lower our total costs. On this slide we will introduce four current pilots that are ongoing, but have shown promise, and demonstrate the lower costs associated with e-learning. On succeeding slides we will identify specifically how these projects have already lowered total costs. An important example is the conversion of some of our most popular classes to a self-paced offering that we’ve called Self-Study CD-ROMs, or SSCD. While the initial cost to develop these offerings is higher than the traditional delivery cycle for an in-classroom course, the maintenance costs are negligible. We chose courses that had two features; the course has high demand because of its importance to the performance of a high percentage of our people, and the information in the course is mature and stable. A relatively new pilot is the self-paced Training on Demand (ToD) offering. This material is available to our people over the web, and while the criteria for selection of a course to be developed as ToD is similar to the SSCD, the focus is more on the visual element. The initial cost of development for a ToD course is similar to the SSCD as well, and the maintenance costs are still negligible. Self-paced training is contraindicated in situations where the process or material is very complex, tends to change often, or requires feedback or immediate direction by an expert. Instructor-led training is perfect in these situations. Many of these courses do not require the physical presence of an instructor, so we have introduced a pilot for teaching courses of these types online with a live instructor, and a blend of self-paced and instructor-led modules, or live virtual classes (LVC). The initial development costs of these offerings are not as great as the SSCD or ToD but the maintenance costs are slightly higher. As was reported in the previous slide, we have fully implemented a KMS in some departments, and have demonstrated success with improving their work performance. Some information does not have to be presented to our people at all, but only needs to be made accessible in an organized and useful way. We have developed procedures to ensure that the information in the KMS remains current, and the best available. We are beginning to develop performance tools for specific positions, giving access to pertinent information. In these departments we have also implemented a process for collecting information regarding the performance of critical tasks, so that we do not lose this critical information through employee turnover or attrition.

Lower Cost in Production Days E-Learning is more efficient than classroom alternatives SSCD (2-4 days instead of 5) ToD (3-4 days instead of 5) LVC (3-4 days instead of 5) KMS (no training required) 41% cost reduction The first factor to look at in justifying the success of the e-learning initiative is to determine two things; does the strategy result in greater worker performance, and does it do so with the same or less costs. On this slide we demonstrate lower costs. E-learning delivery does not require our worker to sit in a classroom for a predefined period of time. They can fit training into their time schedule, according to their opportunities for additional learning. Our pilot programs show e-learning to be more efficient in conveying pertinent information. As shown in the slide, all learners in the pilot were able to successfully complete courses in less real time than for in-classroom courses. Let’s translate that into cost savings numbers. The average employee at XYZ who takes this training makes $52,000 per year in salary, or approximately $200 per work day. In our pilot, 10% of employees preferred the SSCD, while 13% preferred the ToD. We were able to convert 21% of our courses to availability through the KMS system, and the remainder of the students (56%) preferred the availability or required instructor-led training. The average time of completion of each offering was SSCD 3.56 days, ToD 3.8 days, LVC 3.75 days, and KMS requires no work days lost. For the departments where these pilots were tested there were 214 total students that would have taken 5-day courses. This would have translated to 1,070 days employees were away from work, or a cost to the company in productivity of $214,000. With the introduction of these courses – just in savings for employees being back to work faster – the savings was $87,812 or 41%. SSCD: 21 students * 3.56 = 74.76 days * $200 = $14,952 ToD: 28 students * 3.81 = 106.68 days * $200 = $21,336 LVC: 120 students * 3.75 = 450 days * $200 = $90,000 KMS: 45 students * 0 = 0 days * $200 = $0 --------------------------------------------------------------------------------------------------- 214 students $126,288

Lower Costs E-Learning can deliver training to more employees without increasing delivery or development time For training in the classroom there is an optimal number of students who can actively participate. Instruction in the classroom must also be done during a work day, and instructors can only be in one place at one time. These three facts constrain the number of employees that can be trained in an important development immediately. With e-learning it is possible to surmount those constraints. For example, SSCDs and ToDs can be disseminated to the appropriate personnel and utilized anytime, even over the weekend, and does not involve an instructor. Thus, more training can take place is a short period of time with minimal outlay after development. The KMS translates into immediate application of information and knowledge at the critical point, and requires no training whatsoever. Once implemented, the cost is relatively constant for staff to ensure that material remains vital and current. The KMS makes learning available when needed, not according to training constraints. The LVC solution does require more overhead and has more constraints. Because of the method of implementation, they are just as flexible for our people to be able to learn complex, or constantly changing material. LVCs use a blended approach. For each LVC a live instructor is made available to students who can (a) answer questions, (b) provide necessary feedback and encouragement or direction, and (c) present material that is constantly changing or incredibly complex at predetermined times. Because of this blended approach, this training allows more students to participate and receive optimal learning.

Lower Costs While e-Learning costs more to develop, the economy of scale are such that the financial return can be recouped quickly Development costs vary greatly depending on the length of the course, the complexity of the material, the availability of pre-existing material or learning objects, and the expertise of the developer. E-learning development is initially much higher than our traditional in-classroom offerings. For SSCD, initial cost of development runs almost three times higher then traditional in-classroom training. For ToD, initial cost of development is more than three times higher. For LVCs, initial cost of development is about twice normal development costs. It is difficult to measure the initial cost of translating material into the KMS, but in the future this cost is likely to be negligible since the departments we have been working with have the largest proportion of classes that lend themselves to this type of conversion. In terms of cost to the company, development costs of e-learning courses are negligible (as shown in the chart). What costs us the most are delivery costs (previous slide), travel costs (of both worker and instructor), and diverted labor (previous slide). Through the continued implementation of e-learning for appropriate classes, the savings to the company will continue to increase, and our savings in delivery, travel, and diverted labor costs will more than pay for the development of our entire e-learning initiative, with continued savings following year after year.

Better Quality Learning E-Learning results can be evaluated Employee knowledge assessment Manager performance assessment Performance monitoring software (where available) When we implemented the e-learning initiatives in the pilot programs we wanted to make sure that we could measure whether the programs were effective in translating the knowledge disseminated into real performance increases at work. We did this by creating an assessment system in which (a) the employee is assessed on the critical knowledge that the class was designed to impart, (b) the employees manager observes work performance following training to assess improvement, and (c) where possible, we utilized performance monitoring software to determine if the employee performed specific parts of their job better and more efficiently. The assessments in the pilot helped us determine that all of the e-learning offerings consistently provide as good or better learning experiences as in-classroom courses in less time, and with less cost. In the pilot we also solicited feedback regarding improvements that could be incorporated into the offerings, and we used these suggestions, as appropriate, to further improve the effectiveness of our e-learning programs.

Better Learning Service E-Learning provides better service to learners in several ways: Any-time Accessibility (24/7) Excellent Quality Accessibility Any-where Accessibility You don’t have to be in a classroom on a business day to learn and develop skills The constraints of a physical classroom do not apply to e-learning. This provides better service to our employees. We have been working since the inception of the e-learning initiative with the IT department to ensure that employees have access to e-learning with excellent bandwidth at work, anytime, anywhere. Our people are located world-wide, and some do not have as good quality accessibility at home as they do at work. As we move forward we have plans to tailor our offerings so that employees will have a choice of augmented or regular courses so that if bandwidth is a problem they will still be able to get essential knowledge, even though it may not be as multimedia enriched. Our assessments have concluded that the departments in the pilots have universally expressed positive evaluations regarding availability, and accessibility of information. This allows us to state – that, in most cases, our people do not have to be in a classroom on a business day to learn and develop the necessary skills to improve or perform their jobs .

Quicker Delivery Response E-Learning provides the opportunity to get the right training, in the right hands, more quickly: Quicker Development Quicker Distribution Quicker Responsiveness to Business Needs E-learning makes it possible to update or replace training more quickly; as well as respond to new demands for information and skills more quickly. In the pilots, we found that development of e-learning offerings requires more resources, but these resources are diversified more than for the development of traditional classroom courses. This means that even though the cost and resources are greater in the preparation, the real timeline for development is about the same, and in many cases, less. Once a course is developed, it is a simple matter of deploying, and is available for use immediately. Changes or updates to e-learning courses are quicker to implement than in-classroom offerings. Quicker delivery response positions e-learning training and delivery staff to be more nimble and responsive in addressing and delivering information and skills offerings that can be implemented in a more timely manner than has been the case in the past.

Conclusion Improved Worker Performance Lower Total Costs Better Quality Learning Better Learning Service Quicker Delivery Response In this presentation we have shown that e-learning provides great benefit to the bottom line of XYZ. We have presented hard facts from projects that have been developed and executed in several departments within XYZ. The benefits we have enumerated are: E-learning provides workers with both a knowledge management system (KMS) that enhances employee performance. The KMS ensures that the most up-to-date and effective information is immediately available at the specific time of need. In addition, we have demonstrated that our graduated e-learning offerings provide more benefits to XYZ while providing the same quality training as in-classroom training. We have demonstrated that e-learning lowers costs in the form of more productive workers days, faster delivery of material to a larger group of employees, and the economies of scale of e-learning – even paying for itself in a very short period. We have demonstrated that e-learning provides a better quality learning experience for our employees. We have shown that the employees in our pilot are more satisfied with the offerings we have initiated in the pilots, and come away with the skills that improve their work performance at all levels. Finally, we have demonstrated that the e-learning initiative has made training more nimble and responsive to current and future training needs. All of these advantages to XYZ suggest that we continue to expand and establish the e-learning initiative because of the positive impact it makes on our culture, and our bottom line.

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