Business Case: IIIE Offering eLearning Program
 
  • eLearning requires very little to no training administration for student course bookings, reserving classrooms or updating training records. Most LMS systems automate or eliminate these processes.
  • The ability of the educator or organization to develop, introduce and roll-out internal product or customer training quickly and on a nationwide or worldwide scale, leading to faster time to market, earlier revenue streams and enhanced competitiveness.
  • The possibility of providing training directly to your customers much more easily, leading to new revenue streams or enhanced product adoption.

    • eLearning also delivers a number of in-tangible organizational benefits:
  • By empowering individuals to develop their own skills when they want, enhanced employee motivation and reduced staff attrition will lead to savings in recruitment costs.
  • eLearning can offer a higher knowledge retention rate (for example, a recent U.S. Congressional study demonstrated a 250% improvement compared to classroom training).

    • Clearly, not all of these paybacks can or will be achieved overnight. However, these represent a realistic set of quantifiable benefits to help build your business case for eLearning. ROI and cost comparison details understanding will we more clear after going through the case study given below.

     
    7.0 Case Study

    National Institute of Productivity Training (NIPT) got an assignment from ABC Motors, a multinational Automobile manufacturing company, for training on "Productivity through Value Stream Mapping". Assuming a traditional classroom training plan for 400 middle management employees, who undergo a one week (5 day) training, travel for half of them (200 employees) in a time constraint of 3 months (5 trainees, 10 locations). Let us compare the same situation to an equivalent eLearning scenario

    Assumptions:
  • Rate for classroom training: Rs. 5000 per employee and eLearning Training is Rs. 3500
    		•
  • Travel, lodging & boarding, local conveyance for employees in the scope of client.
  • Venue in the scope of NIPT
  • Average Cost to the company per employee per month: Rs. 30,000 i.e. Rs. 1200 per day
  • Opportunity cost per employee per day: Rs. 1500. During classroom training the opportunity cost is fully lost as the employee is totally busy with training at a different location but in the case of e-learning the employee can take training anywhere, any time and practically when he is free. But still we have assumed the opportunity cost around 50% as he is partially busy when he is undergoing e-learning training.
  • Average Travel Cost per employee Rs. 3000
  • Lodging, boarding, local conveyance etc. per employee per day Rs. 2000
    •  
    Table 1: IRR for client (ABC Motors) view point
    Cost Breakups
    Class Room training (Rs.)
    e Learning (Rs.)
    Opportunity cost 2,400,000 1,200,000
    Travel cost + Hosting charges (50% of people travelling) 2,600,000 Nil
    Training fees 2,000,000 1,400,000
    Totals 7,000,000 2,600,000
    Analysis
    Cost to the client 7,000,000 2,600,000
    Cost to the client per employee 17,500 6,500
        
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