Painting Your Value Picture
By Rick Nigol
 My colleague Michael Grant led an
interesting webinar today titled Budgets
Paint a Picture: How to Use the Budgeting Process to set Your
eLearning Strategy. Twenty-nine participants from a range of
sectors (telecommunications, financial services, legal, medical,
pharma, entertainment, software, business services, government and
education) heard Mike describe how eLearning budgets should be more
than just a collection of figures in a spreadsheet. Budgeting, done
properly, paints a picture of your strategy to use eLearning to
create value for your organization. It is not just a case of "here's
what it costs," but "here is the difference we will make."
When we asked webinar participants what their big
eLearning budgeting challenges are, we heard the following:
-
"identifying what will be required ahead of
time"
-
"making realistic estimates"
-
"people don't appreciate all that goes into
eLearning (especially development costs)"
-
"forecasting requirements for coming
fiscal"
-
"justifying costs for management"
-
"'run overs' of time estimates"
-
"determining proper staffing
levels"
These comments are fairly typical of what we hear
from clients all the time. But they also show a fixation on the cost
side of the equation. Notice that no one said that proving value was
a challenge (although it could be argued that "justifying costs" is
another way of putting this).
Mike laid out four ways of budgeting for
eLearning that exhibit value.
1. Mode Comparison
Compare the development, delivery and opportunity
costs of face-to-face training with eLearning. Although initial
development costs are higher for eLearning, great savings can
realized over subsequent years in lower delivery and opportunity
costs.
2. Hurdle Rate of Return
Some organizations may have already established
"hurdle rates" that any internal investment must clear in order to
be approved. eLearning budgets in such environments must be able to
show that investments in eLearning can realize these minimum returns
via providing net benefits to the organization.
3. Incremental Links to Organization
Metrics
Target your eLearning at improving a key metric
important to the organization (e.g. perhaps part of its balanced
scorecard). These metrics can be around things like improved
customer satisfaction, better processes, etc., and are not
necessarily strictly financial in nature. You measure your
effectiveness in using eLearning to move this metric in a positive
direction and use this experience to drive future approaches.
4. Joint Budgeting
This is where you work with a line department
(e.g. manufacturing, sales, etc.) to create eLearning that addresses
a particular challenge within that department. You work closely with
them in defining what is of value to them. The department shares in
the budget and the risk for the initiative. Again, you measure the
effectiveness of the eLearning intervention in creating value for
the department and use this to demonstrate value to other possible
joint funders.
Bottom line? Make sure your budgets paint a
picture of value, not just cost. It's more likely that you will get
what you ask for this way.
Rick
Nigol is Co-Founder and Director
of Education for eLearn Campus.
| 
