 Evaluating online learning
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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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