Use KPIs to Demonstrate the Value of E-Learning
If you’ve ever had to demonstrate the value of training within your organization, you know that the key lies in being able to measure and demonstrate the return on investment (ROI) of training and e-learning initiatives. Calculating the numbers can be difficult and tedious—but the ability to do so is one of the most important skill sets for instructional designers. The numbers are critical, and the data (hopefully) proves you’re saving your organization time and/or money.
Instructional designers should have a good understanding of key performance indicators (KPIs) to demonstrate training value. KPIs are a way for businesses to use concrete numbers to track progress and reach objectives. They should be aligned directly with business goals—and must be figures that can be measured or counted objectively.
Every organization has a set of KPIs, and each team within that business should also have its own set of KPIs. What kind of KPIs should a training team consider? Here are a few examples:
- Training ROI %
- Reduced costs %
- Increased sales %
- Time savings %
- Reduced error rates %
- Improved output %
Remember: KPIs must directly measure performance, and they must be quantifiable and linked to the organization’s business goals. But training teams often use KPIs that don’t provide much insight into the value of the training itself, such as:
- Dollars spent on training
- Hours of training delivered
- Post-course evaluation scores
These data points are measurable numbers, but they are not indicators of performance. They don’t provide any insights into the end goal of the training, which is improving job performance.
Does the amount of money spent on a training program mean employees’ performance will improve? No. On the other hand, does an increase in post-training sales likely indicate that a program was successful? Yes! But wait ... what if at the same time the training was taking place, an improved sales system was being implemented and a big sales promotion was underway? Could those factors also be responsible for the post-training sales increase? Yes.
That’s why, when you set out to demonstrate the effect of a training solution on a set of KPIs, you need to keep in mind the basics of cause-and-effect experiments: Identify and isolate the possible variables that will affect the outcome before you deliver and evaluate the training.
How can you ensure your training program is measuring appropriate KPIs? And how can you identify possible variables that will affect the KPIs? Follow these simple steps.
Step 1: Identify KPIs Associated with Training Tasks
Since training, at its core, is teaching someone how to do something, the process is based on tasks. Every task carried out in an organization should align with a business goal or a measurable KPI. Your task is to identify those KPIs up front (during the analysis phase, before you start designing the training) by speaking with the appropriate stakeholders.
Here’s an example: You’re designing a training program about a widget for the sales team at Widget Inc. How do you determine the KPIs associated with this widget training? First, identify which specific task the Widget Inc. employee will be trained to do. In this case, the sales team is being trained on a product. So, armed with their product knowledge, what task will they be expected to perform after the training? The answer: They will need to sell the product.
Next, determine which KPIs are tied to the sales team’s performance as it relates to selling the product in question. Tracking the number of sales of that product and the percentage increase that happens post-training would be an ideal performance indicator to track in this situation, for example. To identify these KPIs, you’ll need to interview stakeholders.
Step 2: Identify and Mitigate Variables That Affect KPIs
As previously mentioned, many factors can influence KPIs and affect the outcome of your training. If you want to clearly demonstrate the value of the training alone, you need to identify these factors first. Speak with management and stakeholders to find out the potential variables and then document each one.
Returning to our Widget Inc. example: You’ve determined that one KPI to track is “number of product sales.” So, you chat with the stakeholders involved in the project to identify anything else happening during the time the training is being designed, delivered, and evaluated that could affect this metric. You find out that a big email marketing promotion is lined up for the same week you deliver the training. Whoa! That could affect the KPI in question for sure, so you chat with the marketing team and ask them to delay the campaign by a few weeks, so you can accurately measure the results of your training.
Step 3: Measure KPIs Before Training
Once you’ve identified the metrics you want to track, you’ll need to measure them both before and after the training to see if they’ve changed. If an organization has already identified KPIs that are meaningful to reach business goals, there should be data collection methods in place to gather these metrics. Find out how the organization is tracking the KPIs and get a baseline score to use as a pre-training measure.
At Widget Inc., the sales team creates daily reports from their customer database system to track the number of sales. That is where you get your information for your baseline score.
Step 4: Measure KPIs After Training to Determine the Difference
After the training, get another measure of the numbers and see how they stack up against the pre-training measure. The difference in the metrics should help you prove the actual monetary value of the training initiative. If sales of the widget went up by 10 percent after the training program, and no other variables changed, you can likely attribute that increase to the program.
This is a simple method for using KPIs to track and measure training effectiveness. Have you ever used KPIs to evaluate training initiatives? If yes, how was your experience? What problems did you encounter? I’d love to hear your feedback, so don’t hesitate to leave me a comment below.
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Nice info on the basics of ROI from a training perspective. As Marc says though, the problem we often encounter is the environment or organisation itself. These ROIs typically take longer to plan and execute than the solution would by itself, which normally leads to a lot of resistance. Added to this, the external factors involved are often near impossible to exclude from the analysis which can be tricky. The key in my experience is the role we as IDs/training teams/training departments play in the process of 'performance improvement'. Are we just order takers, are we ticking boxes or are we trusted advisors? I'm sure you would be hard pressed to find anyone in these parts that would argue the fact that training (in its various guises) adds significant value to the performance of th... Expand
An interesting point Tracy. Having been on both sides of that equation, I can say this: ideally, the organization/client has done that analysis prior to hiring the resource. They've identified the gap and appropriated the budget accordingly. It is definitely worth bringing up in your conversations with clients on the front end. Ask those questions, and establish a feedback mechanism with the client for them to share their results after implementation - these are great to be able to add to your portfolio/references. If, for example, the company is seeking a developer to design/develop a new program...what are the business objectives it supports; how is the company measuring success; and at what milestone do they anticipate results...are all questions I would ask during the initial fro... Expand