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Evaluating online learningpixel.gif (807 bytes)

pixel.gif (807 bytes) Measuring return on investment
AT LEVEL 5, we measure the financial impact of the business results realised at level 4. The most popular way of expressing this impact is as a return on investment (ROI).

ROI is calculated as follows:

% ROI = benefits x 100
                   costs

ROI relates to a specified period of time, typically a year or two years. First you measure all of the costs associated with the particular training programme over this period:

  • analysis, design and development costs
  • promotional costs
  • admin costs
  • tutor costs
  • learner costs (time, expenses, lost productivity)
  • equipment and facilities costs
  • evaluation costs

Then you measure the financial benefits obtained over the same period:

  • labour savings
  • productivity increases
  • cost savings

Then you can calculate the ROI.

Let's imagine you have been running an online management training programme and want to calculate the ROI over the first year. You measure the costs as $100,000 and the benefits as $130,000. Your ROI is 130,000 / 100,000 x 100, or 130%.

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