To understand the total benefits derived from e-Learning, you need to define metrics (standard measures) of effectiveness. Only then can you assess the cost effectiveness and ROI of an e-Learning project. To do this, you must go beyond the standard "reaction evaluations" that we are all accustomed to giving and receiving at the end of a course. While these do have some value, particularly for evaluating how much a participant enjoyed the experience (the smile factor), it is necessary to gather more data that will help you answer the question "Were the hours spent in e-Learning, and the dollars invested in people, time, and money well spent?"
To do this you should develop metrics that evaluate e-Learning on 4 levels (Kirkpatrick, 1998 in Setaro, 2001). Click, hold and drag the slider in the interaction below to learn more about each of the 4 levels of evaluation.
After determining the total benefits based on the four levels of evaluation, you need to somehow quantify them in order to calculate true percentage of ROI in an e-Learning project using the following formula:
Multiply the total benefits (TB) of training in dollars by 100 and divide that by the total training program cost (TTC):
TB (in $) x 100 / TTC = ROI %
You will notice that to calculate the ROI you must represent
the total benefits as a dollar value. But how do you assign dollar values
to benefits? This is the challenge. In many cases it is not possible.
You will need to determine for yourself how much this is possible in your
own context based on some of the considerations discussed in the next
lesson.
For further reading on this topic you can access the following
on-line resources: