Business Case: IIIE Offering eLearning Program

 
Table 2: IRR for Training Company (NIPT) view point
Cost BreakUps
Class Room Training (Rs.)
e Learning (Rs.)
Consultant training charges (Rs.3000 per day) 150,000 75,000
Consultant travel + Hosting charges 130,000 Nil
Training venue charges 1,000,000 Nil
Course development cost + Hand outs 210,000 400,000
Learning management systems (1st year amortized) Nil 300,000
Analysis
Cost to the Consultant Group 1,490,000 775,000
Cost to the Consultant Group per employee 3,725 1,938
Profit 510,000 625,000

 

ROI Analysis

The above tables 1 & 2 shows the ROI calculation from ABC Motors (client) view point & other Training company (NIPT) view point. The total cost to the client is around 70 Lac rupees for classroom training of 400 middle management and per employee cost to the client is around Rs. 17, 500 where as the profit to NIPT Consulting group is around 5.1 Lac rupees.

In the second case assuming the training is conducted with the help of e-Learning with similar conditions w.r.t. classroom training. The cost to the client is around 2.6 Lac rupees, i.e. 3 times reduction in training cost to the client or 3 times reduction in the cost of training per employee. Similarly for training company (NIPT) the return on investment for classroom training is around 34% where as in case of eLearning the return on investment is around 80%. This is the profit in only one training event. With the eLearning model, NIPT can deploy the same course in several such training events for various corporate clients. Further, with the eLearning model the training need not remain an "event" but can be offered continuously throughout the year (24x7x365) and lifecycle of the training course. The same course can be offered multiple times as there is no physical restriction on number of candidates.

Pl. note that this figure and calculations are representative and may vary as per case. The case study is a representative to give a feel of ROI.

8.0 Conclusion

Existing learning providers such as colleges, universities, institutions, consulting companies, niche-training agencies etc need to harness the current technologies to expand their markets and retain their existing clientele. Government and nonprofit agencies need to use the new medium to educate the public in a cost-effective manner.

The massive improvements in availability and access to internet, multimedia, telecom and other technologies now allow organizations to meet this challenge by making appropriate choices for cost-effective internal/ external E-Learning solutions.

E-Learning is changing, moving away from simple text -based online courses to becoming integrated with overall business processes. By 2011, the higher education and corporate training markets will likely will remain the largest. Mobile learning and games and simulations are seen as key growth areas.

eLearning Offering from the perspective of IIIE

Applying BPR (Business Processes Re-engineering) of Traditional Training and streamline the process by using internet, multimedia, telecom and other Information technologies with the view of imparting knowledge to the society as a whole.

eLearning offering can be looked as a strategic decision for achieving the Vision & mission of the IIIE:

  • ELearning can foster and assist professional education in Industrial Engineering
  • ELearning will help in intimate, support and disseminate research in IE perspective and practices.
  • ELearning will Intensify Industry-Institution interaction and aggressively 'Market' the benefits of IE profession.
  • ELearning can assist in providing opportunities for acquiring formal and recognized qualification in the field of Industrial Engineering.
  • ELearning will help IIIE foster, assist, conduct, education and research in subjects related to the profession
  • with ELearning IIIE can offer correspondence and other courses
  • By setting examples to other organization for spreading education
  • With above perspective IIIE can adopt eLearning as one of the strategic tools to take IIIE in to 21st century. This strategy will not only become one of the prime revenue sources but also make IIIE as one of the progressive & best institutes in years to come.

        
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