In addition to online courses, many organizations including IBM, Ernst & Young and Verizon Communications, use a "blended" approach, combining online courses with classroom-based activities.

The use of a business case to justify any significant investment is common practice in both industry and government and its use in investment decision making for eLearning is no exception. Its primary focus is a cost-benefit analysis. A thorough analysis includes a comprehensive investigation of all eLearning costs as well as a realistic projection of benefits such as Return On Investment (ROI).

The costs incurred for an organization establishing an eLearning program can be significant. Course conversion costs for existing classroom-based courses are about Rs. 40,000 and up for a two-hour course, depending on the kind of interaction needed. A new course of similar length costs more than Rs. 80,000 to develop. Course conversion and development can be accomplished by hiring an instructional designer and a producer or outsourcing to a company specializing in this work. If you are able to take advantage of off-the-shelf courses, the cost is much more reasonable ranging from just a few thousands to Rs. 15,000.

Another major eLearning cost is the purchase of a Learning Management System (LMS) which manages the launching, assessment and record keeping of the eLearning solution. LMS costs range from few Lac rupees to couple of crores, depending on the functionality desired. Additionally, there are other costs that must be considered and which are often overlooked such as the costs of activities to help prepare employees for eLearning through hands-on training, marketing and public relations.

On the benefit side of the ledger there are well-documented cost savings (ROI) associated with eLearning. These savings include reduced costs for travel, facilities and instructors. For example, Cisco estimated it saved $2.4 million during its first year of eLearning for every 1,000 e-learners.

eLearning also enables cost savings through efficiency, reduced training time and enhanced productivity. Material presented via eLearning takes approximately 50 percent less time than classroom-style presentation. Any number of learners can receive instruction at the same time, therefore reducing the amount of training time. Finally, eLearning minimizes employee time away from the job thus limiting employee productivity loss.

While cost savings (ROI) alone may be sufficient to justify an eLearning investment, some companies are focusing on enhanced employee job performance as a rationale for eLearning. Even though it is difficult to assess a one-to-one correlation of learning experience to performance, companies such as Shell have moved in this direction by incorporating learning in all its business unit scorecards. Ernst & Young learners and supervisors use Web-based surveys to help assess performance change and on-the-job knowledge and skill application. Cisco has reported increased employee productivity attributable to eLearning such as improved efficiencies in using business tools, quicker implementation of tools to a broader scope of employees, and increased workloads while requiring fewer people.

Other forward-looking companies have started ambitious measurement programs to prove eLearning's positive impact on business results. Gartner Group estimates that about 30 percent of its eLearning clients use metrics to chart eLearning impact on company performance. Some of these metrics include reduced time-to-market for new products, improved customer retention and repeat business rates, and increased revenue or market share. As an example of the latter, KPMG Consulting has stated that recent revenue increases in e-commerce and e-business consulting reflect eLearning contribution to the bottom line. Gartner Group estimates that KPMG booked $1 billion in e-business consulting revenue following its eLearning rollout.

Regardless of whether hard financial figures documenting cost savings are used or more intangible benefits such as improved organizational performance, companies throughout industry, as well as government agencies, have been able to prepare strong business cases for eLearning. eLearning has matured to the point that it is able to withstand the scrutiny of a disciplined business case analysis to clearly demonstrate value to any organization.

Turning to the cost side of the equation, eLearning offers several advantages over classroom training. You need to take into account the following factors: