Business Case
Business Case

The Business Case for E-learning

E-learning equals productivity. A business case for e-learning demonstrates the productivity advantages to an organization, where productivity measures the output of an individual working in an organization against the input costs for supporting the individual in an organization. An analysis of expenditures on e-learning for employee development at Cisco in 2003 showed that every dollar spent yielded $16 dollars in earnings contributions1.

E-learning, because it is implemented on an intranet or the Internet, offers something that no other training, communication, or education tool ever has: accountability on a grand scale. Getting information into the hands of users has traditionally been accomplished in a number of ways: videotapes, laser discs, multimedia CD-ROMs, book, white papers, PowerPoint slides, classroom and individual instruction, and many deployment vehicles. Until e-learning it was impossible effectively or affordably to hold the learner accountable for using the product to actually learn anything, whether it was skills or knowledge based. Today, an LMS allows the testing of each individual on each module or chapter. LMS allows the reporting of progress, adequacy and effectiveness of the content and testing and holds both learners and content developers accountable.

The other advantage of e-learning offers is ease of maintenance. There is no difference between a book, CD-ROM or videotape- all take weeks or months to edit, update, republish and redistribute. With e-learning, maintenance is easier, faster and dramatically cheaper than traditional media.

The disadvantages of classroom instruction are the constraints that apply to prevent it from scaling: number of classrooms, number of instructors, the location, time away from family and job, and the number of students necessary to justify additional expense.

Younger generations expect to rely on tools other than an instructor to gather knowledge and to be able to do so on their own schedule. Comprehensive E-learning systems should have the following components: E-communications, E-training and E-assessment.

Incorporates learning portals that include live and on-demand video, audio content, electronic libraries and archives, electronic conferencing and “anytime-anyplace” access. E-Communication is often referred to as knowledge sharing.

Should incorporate formal and self-paced, modular learning opportunities, a Learning Management System (LMS), relevant content, and a structured approach.

Participants should be able to test their knowledge through online exams, quizzes and should have the ability to get acquired skills validated through certification.

The components of a successful e-learning program are best viewed as a pyramid: As the most familiar and widely used, e-communications represents the first tier of the pyramid, offering the access that a work force needs for empowerment and knowledge sharing. The development of skills through e-training represents the second tier, where the level of use is less widespread and more specific and structured. The third-tier, e-assessment, represents the apex of the pyramid, because the assessment component of the model is the area in which retention and performance can be validated against established benchmarks. When all three components are aligned, then an integrated e-learning system will work.

Envisioning the system as a pyramid allows organizations to think through components and successfully implement an e-learning program. The integration and intersection of the components will generate measurable productivity leaps for any organization.

The above model nurtures a system that allows organization competence and workforce output to be measured and enhanced. In 2003, Cisco systems realized a $142 million financial benefit from this type of comprehensive model1. The same report noted that employees who change jobs acquired the necessary competency up to 40% faster through e-learning than employees who used the classroom to acquire the same knowledge or skills.

1 The Business Case for E-Learning, Tom Kelly & Nader Nanjani, Copyright ©Cisco Press 2005

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