Cost-Benefit and Cost-Efficiency of Online Learning.rtf by handongqp


									OMDE 690
Charlotte A Donaldson
Final Capstone Project, December 11, 2004

                       Cost-Benefit and Cost-Efficiency of Online Learning1

          When a quality classroom learning program is compared to a quality online
learning program, most of the literature and empiricism has demonstrated people learn
equally well, if not better, through online learning. “In other words, if you assume there is
no detriment to learning with an e-learning [online learning] solution, then your goal
should be to achieve this level of learning at less cost” (Rosenberg, 2001, p. 214).
Learning professionals – both in school settings and in the workplace, or some
combination – are often reluctant to tackle the cost issue and frequently find justifying
the cost of both traditional and online learning to be a challenge. It can be argued that
seldom are learning professionals sufficiently knowledgeable of the financial disciplines,
which need to be embraced in order to communicate with and indeed influence financial
professionals, who will endorse learning programs – or not. With the emergence of
online learning and pursuit of a more productive worker and classroom, both cost
justification and cost benefit calculations have come under additional scrutiny, for
various reasons. Fully understanding how to evaluate and communicate not only the
cost-savings, but also the cost-benefits and cost-efficiencies of online learning is a
powerful tool the learning practitioner is called on to leverage with skillfulness – since
the goal must be to garner support and indeed program selection from organization
decision makers, including those whose leadership specialty is finance.
          However, numbers agility alone is insufficient. The training world is unlike the
factory world in its productivity measurement. In any cost-related analysis of online
learning, this writer contends it is important first that the online learning practitioner is
confident of the complete viability of online learning, with a firm realization that online
learning is not a bargain basement or second class alternative. Otto Peters affirms that

1 This article is an amalgam of work done independently by the author, prior to the work required for the completion of the
     Master’s of Distance Education Capstone Project at the University of Maryland University College, OMDE 690, December
“Distance education [online learning] points towards the future of an information and
learning society” and that distance education “has the power to alter traditional teaching
and learning systems structurally, and to accelerate the change” (2000, p. 246). In other
words, those individuals involved in training and education will certainly help
themselves, their organizations, and their respective learners experience new
opportunities and new benefits found only in learning at a distance – profound
opportunities and benefits not present in the traditional classroom. It can be argued that
to survive, learning professionals will be called on continually to think in totally news
ways about virtually every aspect of learning, including its design and delivery,
obviously its cost benefit and justification, and its strategic position in the business
environment. Learning professionals must become skilled at demonstrating evidence of
cost benefit, when proof is difficult to achieve, which it frequently is.
       This article attempts to introduce the reader to a theoretical framework to position
online learning (with emphasis on the workplace) as a cost-efficient and sound
alternative and complement to traditional classroom learning.
       In any analysis of costs and benefits of traditional face-to-face learning in
business and in academe, it quickly becomes obvious that organizations expect a return
on investment (ROI) beyond the cost savings of the learning program (or event) itself. A
key distinction in measuring cost-benefit analysis is that businesses (including
government, military, corporations, non-profits, etc.) expect measurable performance
improvement in the workplace, after the learning has occurred. Academic education, on
the other hand, is more broad and theoretical-based. Academic work for formal credit is
sometimes perceived as learning for learning’s sake, and, therefore, may demonstrate
less focus on long-term expectations of changed behavior of the learner. Both academe
and business must to some degree, however, remain focused on cost savings of every
learning program, ostensibly to remain in business.
       “In general there are two separate approaches to this subject, each with
       its own literature, analytical tools, and standards for judging quality of
       results — the business practiticioner [sic] approach and an academic
       approach, which stems from human capital theory in economics. The
       business practiticioner [sic] approach to this subject emphasizes logic,
       simplicity, transparency, and practicality. By contrast, the academics
       emphasize scientific rigor and replicatability [sic]” (Glover, Long, Hass, &
       Alemany, 1999, i).

Working definitions and concepts

        For purposes of this article, e-learning, online learning, distance learning,
distance training, and distance education are treated as essentially the same concept,
with the exception that the term training is typically more commonly used in the
workplace, and the term education is typically used more often in academia. (With the
more learner-centric approach online brings, perhaps the term distance learning is most
universal.) Workplace training is typically describes learning that is more narrow, less
lengthy, and seldom provides academic credentials that are associated with academe.
Additionally, there are some discussions here that are clearly related to workplace
training and others specific to academic education; some discussions are applicable to
Cost efficiency of online learning

        The goal to reduce learning costs and make learning ever more cost-efficient is
nothing new, and in fact, was in full execution prior to online (i.e., technology-assisted)
learning becoming a major player in the fields of education and training. The period of
the 1960’s and 1970’s was particularly active in economic and practical evaluation of
new and different educational technologies (Rumble, 1997). Rumble further contends
that cost-efficiency in online learning programs is difficult to speak of holistically, since
there are so many variables (technology investments, media mix, practices, numbers of
students, curriculum, course design efforts, etc.), making virtually every learning system
and its measurement unique to some degree. A learning system is then cost-efficient if
output per unit is less than input per unit costs, relative to other systems. In addition, a
learning system increases its cost-efficiency over time when the output is sustained,
and the input does not increase. A key benefit of self-paced online learning is that
learning units can be deployed to virtually unlimited numbers of learners for an indefinite
period of time. Those leaders with a focus on cost justification can easily grasp this
inherent financial soundness, and learning professionals are wise to publicize this
benefit. (An inherent and somewhat common trap in this type learning deployment is to
abandon pedagogical soundness, in order to deliver electronic page-turning modules
quickly, which fail and subsequently turn learners off to all online learning for extended
periods of time; obviously, this approach denigrates financial and learning environment
through a “penny-wise and pound-foolish” strategy.)

       It seems simply obvious that when a very broad view of cost-efficiency is
considered, this view must include a careful analysis of results, reactions, and
experiences of the learner, where learner time-savings and access benefits are
significant, although quite difficult to quantify. Dr. Eugene Rubin, chair of the Master of
Distance Education Program, Graduate School of Management and Technology, at the
University of Maryland University College (UMUC), has often remarked that distance
education is primarily about convenient access for the students. (It is only logical that
more learning should lead to more performance.) A great number of the online students
at UMUC – and other distance learning institutions – would not have matriculated if
distance education were not a viable option, since students are located world-wide, and
many adult working students travel in their jobs and would find attendance in one
geographical classroom a huge obstacle. This access factor alone speaks to an aspect
of the economic fit distance learning often provides, to the teaching unit, the professor
or instructor, and the learner.

       This writer suggests there is a recurring theme in all online learning, whether in
the university or the workplace: while the bottom line is always critical in program
sustainment, it is imperative to look beyond the dollars and cents cost savings to what
benefits are to be derived by all involved, immediately and in future. In an examination
of learning in the workplace, John Berry contends traditional financial metrics to
evaluate online learning is old news, and many organizations “have started ambitious
measurement programs to prove e-learning's positive impact on customer service,
productivity and sales” (Berry, 2000, para 1). Berry further contends that e-learning will
continue its growth, because it is an important driver in transforming the business
enterprise into an e-business organization. Therefore, it seems only sensible and future-
focused to track revenues and market share generated because of new job
competencies, which were conveniently and time-efficiently acquired via online learning.
Why it is necessary to train employees in the workplace

       “Increasing number of adults will need access to learning opportunities
       and continuing training in order to do their jobs….The fact that these
       learners are working adults establishes the parameters [italics added] for
       ways in which this learning should be conceived and delivered. Advances
       in learning technologies and the proliferation of technologies in the
       workplace provide a certain synergy with the needs of adult learners

       [italics added], which is being recognized in the corporate world”
       (Stahmer, 1995, p. 41).

       Workers both deserve and seek training in a rapidly-changing and highly
technical workplace environment. In fact, there exist workplace initiatives, which
combine training and education, with an overall goal of a more productive worker, which
meets requirements of new and changing markets. In other words, this writer contends
the line between education and training has begun to blur and is somewhat insignificant
to those leaders who are investing in market-facing initiatives. In other words, if the
worker learns to be more productive, what does it matter if the cost of the learning came
from a tuition budget or a line of business, market-facing initiative, or some
combination? This current digital age is a time of ubiquitous online infrastructure in the
workplace – where employees, for example, communicate through email and Instant
Messenger™, access documentation and knowledge management systems online, and
file expense reports via a corporate intranet. As Rosenberg (2001) contends, e-learning
uses specific technology in many cases that is not new, does not have to be taught, and
is already a part of the workers’ toolkit – a tremendous cost savings.
       Not only has research indicated workplace learning is important in determining
the future earnings capacity of workers, but also, it is generally believed to impact the
business bottom line positively. Bassi and McMurrer contend that “a portfolio of firms
(across industries) selected because they invest an above-average amount on training
would have returned an average of 45 percent more than the S&P 500 index annually in
recent years. That's right — 45 percent more [italics added]” (2001, para 1). In fact,
these authors implored the United States Securities and Exchange Commission (SEC)
to require publicly held companies to report training investments as an indicator of
financial performance, as the SEC does currently with other key indicators, such as
purchase of capital and research and development investments. One can easily
conclude when ROI is the topic, this Bassi and McMurrer assertion is a convincing story
to share with senior management.
       CPA Dee Witt contends, “the real key is value-added service/products for the
(ultimate) customer. Even if the distance training, for some strange reason, turned out to
be more costly than traditional on-site training – that is VERY valuable information for
management to have in order to make the best, most informed, cost-effective, and
ultimately value-added training decision….Also, the manager MUST know the cost in

total, including time and resources required by his/her own staff members. This
[distance training] is generally a lesser cost and disruption [italics added] to the way the
company does business….” (personal communication, August 24, 2004).

History of ROI

       “ROI is simply a measure of benefit versus cost ….While a long-
       established business practice, ROI analysis remains on the frontier in
       measuring the impact of training” (Glover, Long, Haas, & Alemany, 1999,
       p. 1).

       Developed by DuPont in Wilmington, Delaware to help make business more
manageable, ROI calculations may be a poor fit for the digital age and the merging
training and education workplace in many areas, but in particular in the area of learning
measurement. While ROI is a familiar (i.e., a financial holy grail) term, a more thorough
consideration of ROI may yield some doubts as to its complete applicability in the
modern age. Originally developed over a century ago, here is the ROI formula at its
most basic level:
          Net Income (or Profit)  Sales x Sales  Total Assets = Net Income  Total Assets = ROI
       “It's a fast, convenient financial measure that helps executives understand the
relationships among profit, sales, and total assets. In particular, the model shows how
businesses generate profit and how well a company uses assets to generate sales”
(Sommer, 2002). While determining ROI on learning programs can be a difficult and
iterative process, it is totally logical that senior management wants to realize business
value on its investments and expects to reach this value conclusion, at least in part,
through an expression of ROI. This writer contends the learning professional must re-
educate its leadership to some degree about the learning value proposition.
       Glover et al contend that ROI as an analysis tool works best for cost-benefit
analysis of physical capital and equipment, but falls short in analyzing human
capital.…Three central problems are [1] obtaining accurate measures of the full costs,
[2] measuring benefits without relying on subjective estimates, and perhaps most
difficult, [3] isolating the impact of the training on changes in performance” (1999, p. i). It
can be argued this human capital investment approach is a more comprehensive
assessment and predictor of the business value. The well-educated, well-trained,
productive worker is the final goal, and online learning is arguably an important
facilitator of this goal.
Kirkpatrick’s four levels of training measurement

       It could be argued no discussion of learning evaluation would be complete
without consideration of Donald Kirkpatrick’s four levels:

       (1) reaction of the learner
       (2) measurement of learning achieved in the course
       (3) measurement or observation of changed behavior in the workplace
       (4) assessment of outcomes related to organizational goals.

       It is important to note that while many businesses track Kirkpatrick’s levels one
and two, especially in traditional training programs, accurate tracking and analysis of
levels three and four are in fact less frequently implemented, because that process is
not simple, not practical, not institutionalized, and not inexpensive. However, Raths
(n.d.) contends that corporate financial executives are no longer content to accept only
levels one and two, when such high initial costs are typically associated with moving to
online learning. For example, Raths references Brandon Hall’s contention that a
learning management system (LMS) to support 8,000 workers costs more than half a
million dollars. This type of significant investment understandably calls on learning
professionals to provide some evidence that the learning program is in fact a wise
investment, instead of simply a cost. The literature suggests this is an important
distinction: evidence trumps proof because of the complexity of finding proof. In other
words, if an organization provides online sales training and sales then increase by ten
percent after the completion of training, this is evidence of cost benefit and needs to be
presented to those who fund the learning projects.
       Before leaving this topic, a practical application of Donald Kirkpatrick’s popular
four levels model of training assessment is provided:
       “…Evaluation should always begin with level one, and then, as time and
       budget allows, should move sequentially through levels two, three, and
       four….each successive level represents a more precise measure of the
       effectiveness of the training program, but at the same time requires a
       more rigorous and time-consuming analysis” (Kirkpatrick’s Four Levels…,
       n.d., para 1).

       Because each level uses data from the previous level, the task becomes
increasingly more complex. Level three evaluations are rare, and level four rarer still,
according to this writer’s experience.

                  Figure 1 – The DuPont ROI Model (Nickols, 2000).

ROI is an estimate
       It is obvious this ROI model in Figure 1 is more complex than is generally
contemplated when references are made to ROI, especially by learning professionals
who are yet unfamiliar. An important point is that “originally, ROI was a measure of
return on the total investment in the entire business [italics added], not the ROI of a
project or a product or a training course [italics added] or any other isolated aspect of a
business” (Nickols, 2000). (Learning modules are often isolated events.)
       It is common knowledge in financial circles that informed guesses are part of all
financial decision making. For example, how many years will a PC be operable and
current, so that an accurate rate of amortization may be applied? When will new
technological advances make current software outdated? Or, how much good will does
hiring a former football star add to the balance sheet? One could logically conclude that

an educated best guess from the learning professionals, in conjunction with the financial
professionals, is standard operational procedure throughout business and academe.
Cross (2001) contends that e-learning being a continuous process across the enterprise
changes all the rules, where training in the past tended to be a one-shot deal for an
individual business unit. E-learning generally requires a more strategic initiative [and
investment], as it parallels e-business initiatives.
Criticisms of ROI for measuring training impact

       “Today's accounting systems and reporting requirements are still firmly rooted in
the industrial era, even though we are now squarely in the midst of the knowledge age.
This results in the investor equivalent of driving your car by looking in the rear view
mirror” (Bassi & McMurrer, 2001, para 2). In a search of the literature, references to ROI
as a measure of the past instead of an indicator of the future represent a recurring
theme. Jay Cross contends, “the DuPont model fails to recognize the value of
intangibles and is mainly a backward look rather than a guide to the future. It is totally
inappropriate in this day and age [italics added]” (personal communication, September
3, 2004).
       It is simply obvious that measuring training impact, whether online or traditional,
is puzzling and daunting, at best. One reason human capital development is so difficult
to measure is that fully trained and competent employees can be a fleeting asset, one
that can leave the organization at any moment, unlike an investment in inventory or
buildings. This inherent challenge of human capital volatility is perhaps a reason that
senior management relentlessly seek a comfort level of training ROI feedback, although
they are certainly aware (and can be adroitly reminded by learning professionals) that
terminations and resignations change the entire picture of the perceived investment,
benefit, and value proposition of delivered training. In fact, there are no accounting
standards related to training and education investment or reporting. Those
organizations bold enough to report training statistics risk speaking in an unknown
language to investors.

Training is traditionally a good investment and research indicates connection to
improved business performance

       Bassi and McMurrer conducted a study of organizations that spend an above
average amount on training and development and found remarkable evidence that

showed improved business performance and shareholder return the following year. In
other words, investments in training are reliable predictors of improved financial
performance. Although admittedly an imperfect measure (again, evidence vs. proof), it
can be argued this observation is worthy of consideration. “After controlling for all
available information on the firm, this variable [employee training expenditures] is far
more important in determining return than capital investments or research and
development expenditures, for example” (2001, para 7).
       In the continuing quest to leverage ROI appropriately and fairly, Conner (n.d.,
para 3) provides the following additional response to the question of What is ROI:
      ROI is a traditional financial measure based on historic data.
      ROI is a backward-looking metric, providing no insights for improving business
       results in the future
      ROI has often been used for self-justification rather than continuous

       Conner further contends the truly difficult part of calculating ROI is to identify all
the total financial benefit the entire organization realizes, before the total financial cost
of designing, developing, producing, delivering, and maintaining that program is
deducted. This writer contends that looking beyond a total financial benefit is important,
too. For example, a reputation of a better-trained workforce could be viewed as a draw
in recruiting top talent – how can that benefit be properly expressed on the balance
sheet or income statement? Interestingly, it has been said that good training and failed
training are booked the same way in the accounting department.

       However, and this writer contends this point is key, it can be vigorously argued it
would be a mistake to attempt to sell a large online learning project to senior
management without speaking of ROI, and without comparing the benefits of online to
traditional delivery. As the old saying goes, to convince someone, the speaker must
speak in the listener’s language. The “trick of the trade” is to speak enough ROI to
convince decision makers that the online learning project is a healthy investment,
instead of a draining cost. Therefore, it is critical to expand and connect the long-term
benefits of the training investment to those important intangibles of satisfied customers,
increased revenue, lowered expenses, reduced turnover, improved employee morale,
and so on.

Aligning learning with business objectives

        Current thinking in learning circles emphasizes the importance of aligning
learning initiatives with business objectives. The old idea of training “just because,” or
as a luxury or a reward must be firmly and permanently set aside. This alignment of
business and learning objectives ostensibly implies an understanding of what senior
management are thinking and what they are seeking for the organization, as they
attempt to manage a difficult balancing act and to choose among many attractive and
potentially important and profitable projects and investments. “My experience has
shown that most senior executives have more faith in ‘gut feeling’ than in numbers. The
numbers are input, but the decision is broader than that. Results from an Information
Week survey reveal that ‘More companies are justifying their e-business ventures not in
terms of ROI, but in terms of strategic goals [italics added]. Creating or maintaining a
competitive edge was cited most often as the reason for deploying an application’”
(Cross, 2001, para 49).
        For example, at Aurum Technology2, the proprietary product was a full-
functioned and competitive banking software system, marketed to banks and credit
unions throughout the United States. However, many of Aurum’s customers had
discontinued attending traditional classroom software release training, because it
required a group of their managers and subject matter experts to journey to Aurum’s
office at least twice yearly to learn of new enhancements and how to implement them to
serve their respective markets. While these new enhancements would without question
help them differentiate themselves in their local markets, hearing complaints about the
product’s perceived narrowness was something senior management battled more often
than they would have liked. When the customer training department wanted to add an
e-learning program (live, synchronous, video-conferencing via Kinko’s nationwide video-
conference centers), the learning group approached senior management with a
business plan that would increase customer attendance at release training and
therefore, make the customers more aware of the product’s robustness – a well-known
and important business objective. In other words, the learning group aligned a training
goal with a well-known business need in order to cost justify online learning. In a very

2 Aurum Technology Inc. was a financial services vendor for banks and credit unions, which merged with Fidelity
    Information Services in 2003. Aurum received a 2001 United States Distance Learning Association Award for this
    online learning initiative. Charlotte Donaldson was the Project Manager at Aurum who led this initiative.
short time, customer attendance at training increased 900 percent, providing customers
with extensive product knowledge they needed to differentiate their financial offerings in
their markets. And, this online learning program became an additional source of income
that (1) positioned the training department to fund a full-blown e-learning program, and
(2) provided additional funds available for other training department expenditures.
Another less obvious cost benefit was that instructors were on the road less, and
suffered less burnout; therefore, employee turnover was impacted positively. This is
exactly the kind of news learning professionals must share with senior management,
who are aware what turnover costs the organization.
       While online learning cost-efficiency is the focus of this article, one could easily
conclude that measuring the benefit of training is similar, whether the learning program
is traditional, online, or some combination (blended). What may be different is more
leadership and financial scrutiny of online learning investments, which may not yet be
as familiar, in a more competitive economy and marketplace.
       Measuring the benefit of online learning, so that it can be cost-justified, can be
approached from many genuine perspectives. For example, the Chief Learning Officer
(CLO) will likely consider e-learning costs (design, development, delivery,
administration, infrastructure, staff training, and sustainment) to be justified, if over time,
more learners can successfully complete training courses for improved performance in
the workplace, at an overall cost less than travel to and from a face-to-face session,
coupled with absence from the workplace. This type of cost-justification is often referred
to as cost savings. Typically, Kirkpatrick Levels I and II vaguely reinforce this claim to
success; often, this is the point where many organizations stopped their evaluations.
However, the business manager must evaluate business metrics and expects to see a
discernible difference of improved performance in the workplace by those who have
completed training programs (e.g., when online customer service training is completed
and customer satisfaction scores increase, these statistics need to be delivered to
management). The business manager most likely can then feel justified in approving
training expenditures when individual performance in the workplace can be measured
as a gain (Kirkpatrick’s Level III). The corporation, moreover, expects to see
improvements in business – increased sales, reduced costs, higher levels of customer
satisfaction, etc. – that can be directly related to shareholder value (Kirkpatrick’s Level

       Cross (2001) contends all these measures are complementary and are valid.
Hopefully, each group understands each other’s goals well enough that the entire
organization benefits from a well-thought-out mutually derived and mutually beneficial
How to track business results

       As alluded to previously, it is a recurring theme in a search of the literature that
“training for training’s sake” is not part of the current business environment, where
downsizing, competition, and global impact require financial agility and precision, along
with optimum worker productivity. Therefore, it is important that there is consensus
among learning professionals and the line of business on the value proposition related
to solving the business problem – with training, or with other performance improvement
interventions (incentives, leadership, motivation, tools, systems, etc.). The tried and true
gap analysis – what is the current situation, what does the situation need to be, what
would it take to change, and what would happen if we did nothing – can be valuable in
establishing current performance metrics and desired metrics, so that organizations
know when they have succeeded – and exactly how well – in solving the business
problem. Obviously, the next step after gap analysis is to identify the content and
learning objectives to eliminate identified gaps.
       From another measurement perspective, Cross provides that attaching an
expected dollar value to elimination of the deficiencies is one method to establish
agreed upon tangible projections and outcomes. “You're focusing sustained attention on
solving problems and adding value, and you're identifying tangible values for each skill
to be taught. As a result, you're forging a partnership with the business unit client based
on his or her core concern: performance” (2001, paras 30 & 31). However, this writer
maintains, cost justifying online learning – or any learning – remains challenging.

       “In our current business climate senior management is demanding cost
       justification more than ever. Human resource directors want to comply, but
       they are faced with two unpopular choices: invest time and energy into
       learning how to scientifically analyze training return on investment (a
       daunting task involving mathematical calculations, gathering significant
       amounts of data and statistical analysis) or hiring an outside firm to
       generate ROI reports” (Taylor, n.d., para 1).

       Taylor (n.d.) further advocates a process undertaken with students themselves to
set after-training goals and quantify benefits and impact of training. First, he asks his
students to set their goals, and then enumerate the personal benefits they expect to
receive from the training, once their goals are achieved. He contends this action sets
the motivation to achieve benefit goals. Next, he boldly immerses the students and
ultimately the organization into ROI, by asking students to calculate the financial impact
reaching their goal will have on their organizations, since he contends goals can
absolutely be translated to hard numbers. Here is a list of the type of questions Taylor
        how much time will this save?
        how much inventory will be reduced?
        by streamlining this area, what additional projects will there be time to
        how much more efficient will I be? (n.d., para 5)

         The above questions are easily understood by leadership. Next, each student is
asked to choose the easiest component to translating answers into hard numbers –
employee compensation. There are many ways to turn these questions into hard line
numbers, but it can be argued the easiest and most familiar is employee compensation.
While Taylor does not add the benefits factor, which is often quoted as between thirty-
five and forty percent, he instructs students to use their rounded hourly wage. For
example, if a student makes $60,000 annually, his/her hourly wage is $30.00 (annual
salary divided by 2). “For every hour saved because of hitting that goal (based on the
employee's training session [and based on the employee’s own projections]) the
employee is that much more productive, thus more valued to the company” (n.d., para
5). Next, the projected savings are extrapolated over a year to predict costs savings per
annum. Taylor wisely adds two more steps, which hopefully lead to action: (1) list the
daily tasks required to achieve the goals and (2) share results with managers, for
validation and support. “This approach also gives supervising managers (i.e., HR
Directors) concrete financial projections they can relate to senior management
regarding training return on investment” (para 7).

Why the focus on online learning ROI?

         This writer contends that in some cases, where organizations have high amounts
of online learning, it is not so much the increased focus on ROI for online learning, but
rather a focus on learning programs overall. Conner (n.d.) contends that any effective

learning programs that could be done for a cost savings and with less travel would have
a propensity to increase the cost savings over time, all other things being equal.

       “For the past 20 years, there's been a kind of 'hope and a prayer' attitude
       about learning. Companies would look at a program, see the possible
       value, and try it. They were willing to take chances. That trial and error era
       is over. Now, companies want to see results [italics added]. Measuring
       value and return on investment for training and elearning dollars has
       always been important, but now organizations want to be assured that the
       training they're spending money on actually works” (Conner, n.d., para 1).

Comparison of elements of benefit and costs, between traditional and online learning

       Perhaps the most obvious argument for the cost benefit of online learning over
traditional learning is that the organization can add value via online learning in fresh,
new, and innovative ways – where opportunity and benefit were previously unavailable
in traditional learning. For example, how does one place a predictable dollar value on an
online learning module, which the employee can take just-in-time, as driven by need,
and learn just-enough, with a just-for-me approach? This benefit becomes particularly
valuable when the learning place is flexible, the learning time is decreased, and
significant absences from the workplace are minimized by avoiding attendance at
multiple-day courses. Further, how does one evaluate the opportunity and usefulness of
a learner having time for reflection and re-taking the training for an enhanced
understanding, if certain elements are yet to be mastered. Then, skipping what is
known, and all this learning is accomplished without abandoning or delaying productivity
in the workplace, or adding additional training costs. Further, and from a learning
development perspective, how can one precisely and financially measure the benefit of
a re-usable learning object that saves training development time and time-to-market for
other training modules and, ultimately, other learners? In other words, how does one
calculate the true financial benefit of a more quickly trained and performing workforce,
because of online learning that can be taken concurrently, instead of consecutively in
“their turn” in the classroom? This writer contends the synergistic benefits alone of a
trained and ready workforce are simply obvious. A word of caution: online learning,
however, is not a panacea or a type of silver bullet, although many mistakenly and to
the organization’s detriment, think of it that way, after the technological solution alone is
determined. Further, bad or unnecessary training, given to those who are not ready to

learn, for whatever reason (or, worse, when training is not the right solution), can occur
whether classroom or online.
       While cost justification and cost benefit arguments are made for both traditional
and online learning, as alluded to earlier, time-to-market is often an advantage of online
learning that cannot be overlooked, for its economic and customer-serving value.
Children’s Healthcare of Atlanta reports an interesting example. An expensive and
patient-inconvenient problem was identified with the completion of a routine laboratory
test. The test was being done incorrectly, resulting in tests having to be re-done. This
re-do was a duplication of costs to the hospital, an inconvenience to the patients, and it
created a delay in the physicians’ diagnostics, which could ostensibly impact the
patients’ health. Within one month after creating a brief and inexpensive asynchronous
online course, all the required staff had completed the training. “But a reduction in
training costs wasn’t the only payoff for Children’s Healthcare. ‘The procedural error rate
dropped to zero….’ And that resulted in a savings in term of the supplies, equipment,
and manpower no longer needed to repeat the lab test” (Raths, n.d., para 3).
       Additionally, but importantly, a fundamental truth of online learning is that there is
no evidence that traditional learning is superior (Moore & Kearsley, 1996). All other
things being equal, sustainable, repeatable, and consistent online learning simply
makes sense, both financially and from a performance perspective, in many cases.
Costs to be considered when evaluating traditional and online learning

       A complete list of every financial aspect to consider is difficult to create, because
of the uniqueness of training requirements and the huge range of online solutions, and
of course, such a list could quickly be out of date. Table One below displays some
elements of which to be aware, as learning professionals focus on their respective

       Table 1 – Elements of Cost to be Considered

       Classroom Elements                    Online learning Elements
       Facilities (building, amortization,   Training platform (servers, intranet,
       rental/lease, utilities, insurance,   software licenses, maintenance,
       cleaning, etc.)                       infrastructure, support staff)
       Equipment (furniture, PCs, flip       PCs, laptops, networks, intranets,
       charts, boards, overheads             software
       displays, training
       systems/servers, etc.)
       Supplies (printing, workbooks,      Supplies (CDs, supplemental
       refreshments, meals, pens,          workbooks, supporting Knowledge
       markers, etc.)                      Management (KM) sites)
       Administration (registration and    Administration (registration and
       tracking systems, invitations,      tracking systems, invitations,
       reminders, evaluations, etc.)       reminders, evaluations, etc.)
       Course development (designers,      Course development (web
       subject matter experts, editors,    development, designers, subject
       etc.)                               matter experts, editors, etc.)
       Course delivery (instructors,       Support (Facilitators or coaches,
       facilitators, support staff         help desk, training customer
       overhead)                           service)
       Learner time away from work         Learner readiness for online
       (overtime for coverage)             learning

       To determine effectiveness of an online learning program, Conner (n.d.)
recommends measuring the following, at minimum:

          Enrollment – are learners beginning the courses?
          Activity – are learners moving through the courses?
          Completion – what is the rate of completion?
          Scores – how well did learners do on testing?
          Feedback and Surveys – what is the perception of success?

Why it is important to evaluate training

       Shepherd (1999) lists the following as important reasons to evaluate training in
the workplace.

Table 2 – Why Evaluate Training (Shepherd, 1999)
To validate training as a business tool  Training – one of many actions taken to
                                            improve performance and profitability.
                                         Proper evaluation is important, in order
                                            to compare it against other methods of
                                            performance improvement [e.g.,
                                            systems, leadership, incentives].

To justify the costs incurred in training         Training budgets are cut when money
                                                   is tight.
                                                  Only by thorough, quantitative analysis
                                                   can training departments make the
                                                   case necessary to resist these cuts.

To help improve the design of training            Continuous improvement provides a
                                                   better value proposition for the
                                                  Without formal evaluation, the basis for
                                                   changes can only be subjective.

To help in selecting training methods             Fortunately, a variety of delivery
                                                   methods exist: classroom, blended, on
                                                   the job, self-study, etc.
                                                  Using comparative evaluation
                                                   techniques, organisations can make
                                                   rational decisions about the methods to

       When comparing traditional learning with online learning, Rumble (1997)
contends the evidence supports that online learning can be more cost efficient, but it is
not necessarily the case, and therefore, learning professionals are required to perform
due diligence in media and delivery analysis and selection. For example, if the audience
for elaborately designed and developed asynchronous courseware is small, economies
of scale cannot occur, as happens when audiences are larger, and the course can last
for long periods of time without adjustment or revision. In other words, setup costs can
be too large to justify online development.
Time compression generally associated with online learning
       One benefit that is generally associated with online learning is that it is time
compressed, since the learner progresses at his/her speed and time spent on
socializing activities are minimized. When looking at the cost of time away from the job
and job coverage issues, this time compression is attractive and worthy of factoring into
the financial analysis.
A brief look at academic distance education
       Rumble (1997) contends that it has long been thought that distance education
can likely be the most cost-efficient means of expanding higher education. “Costs of
traditional education are driven by labour costs of classroom teachers” (Rumble, 1997,
pp. 120-121); labor costs are directly related to the number of students to be educated,

and therefore, costs increases as the number of students increases. “Distance
education changes the production function [italics added] of education by substituting a
range of media for classroom teachers” (Rumble, 1997, p. 121), which then offers mass
production opportunities in many cases. However, as stated before, it can be difficult to
compare cost efficiency of distance education with that of traditional education. For
example, care must be taken that fair comparisons are made in the type of student (full-
time vs. part-time), drop-out levels, capital costs, fixed costs, recurrent costs, division of
labor for course development and delivery, accurate student learning hours, and so
         Rumble (n.d.) has developed a tool (refer to Rumble’s Cost Justification
Model, <>) for the quick analysis of
comparing costs between e-learning and traditional learning. The major conclusions one
reaches by using such a tool are (1) that the high and growing cost and inconvenience
of business travel and non-productive times can be overcome through online learning
and, conversely, (2) that expensive e-learning development for small groups is not
generally cost-efficient.

“Will the dogs eat the dog food?”

         Aside from financial and pedagogical aspects of the traditional versus online
learning question, it is important to note that online learning does meet resistance in
some cases from the learners themselves, although as time progresses in the digital
age, this aversion appears to lessen. Perhaps this resistance can be related to fear of
change, or apprehension of the new or unknown, and perhaps it is self-selection. In
speaking of an online degree pursuit, Eugene Rubin (Ramirez, 2003) contends there
are those that simply have distaste for learning online and simply would not try it. In
business, there has been some success in teaching people how to learn online, by
offering brief, non-threatening, and yes, even fun, live online learning or blended events
to familiarize employees with what it is “all about.” This writer contends once the time,
convenience, and place benefits “click,” some employees then begin to prefer online
learning, and become somewhat impatient in a traditional class. Even very sociable
learners can make this transition and can then become advocates (or, even zealots) for
the convenience benefits of blended and online learning. For example, even an
extroverted worker can still spend a sleepless night individually learning how to improve

his Microsoft Excel™ or business writing skills, all from the comforts of his home PC
A focus on the value of online learning

       Rosenberg (2001) contends that organizations will receive the value of online
learning because of the aggregated ability (1) to save money (costs savings), (2) to
generate enhanced skill and knowledge (which leads to improved job performance and
business results), and (3) provide essential anytime-anywhere access to anyone, all at
the speed at which global business now operates, and indeed, demands. Therefore, the
value proposition for e-learning is:

 “e-learning cost efficiency + e-learning quality + e-learning service + e-learning
               speed = e-learning value” (Rosenberg, 2001, p. 227).

       Rosenberg also addresses the arbitrary (and this writer contends misguided) but
commonplace business goal of converting a specific percentage of a training program to
e-learning. This goal can be reached by “playing around” with the numbers (numbers of
training days, numbers of students, numbers of courses, etc.). However, a less-focused
accounting goal and more-focused value proposition would be to do an assessment of
the impact of the e-learning to the business overall. For example, quickly training sales
representatives on new product enhancements through convenient e-learning perhaps
makes more sense than purchasing off-the-shelf Microsoft PowerPoint training for those
who might take the course “sometime in the future.” Both examples would qualify as a
conversion to e-learning, but which would be more meaningful to business goals and
which would be more cost-beneficial overall?
A simple financial comparison between classroom and online

       As mentioned earlier, one often overlooked aspect of deployment of online
learning is the time-to-market aspect of a trained and ready workforce that online
learning can bring about faster and more comprehensively. For example, a business is
about to shift from Netscape email to Microsoft Outlook email. Here is an example of a
cost-benefit analysis, where traditional versus online learning “off-the-shelf” training is

Table 3 – Option One – 100% classroom training
      # of employees to be trained 1,200
      # of classrooms available    3
      # of days of training        1
      # of employees in each class 10
      # of external contract       3
      instructors to be hired
      Cost per day per instructor  $500
      # of elapsed days to train   1,200 employees  10 per class = 120
      1,200 employees              one-day classes  3 classrooms = 40
                                   elapsed days
      Cost for instructors           120 x $500 = $60,000
      Cost for employee being      Average annual salary and benefits =
      away from the workplace      $62,400  2,080 hours = $30 per hour.
                                   $30 per hour x 8 hours x 1,200 employees
                                   = $288,0003
      Total costs to competency in $60,000 + $288,000 = $348,000 after 40
      the workplace                elapsed days

Table 4 – Option Two – 100% online learning
      # of employees to be trained 1,200
      # of copies of concurrent e- Virtually unlimited
      learning training available
      # of days of training        4 hours4
      Cost per employee for        $150
      # of elapsed days to train   Virtually unlimited, but realistically could
      1,200 employees              occur in 10 days
      Cost for training Cost for    $100 x 1,200 = $120,000
      Cost for employee being      Average annual salary and benefits =
      away from the workplace      $62,400  2,080 hours = $30 per hour.
                                   $30 per hour x 4 hours x 1,200 employees
                                   = $144,000
      Total costs to competency in $120,000 + $144,000 = $264,000 in 10
      the workplace                elapsed days

          The examples above are not meant to be complete, because each situation
requires a common sense approach of all the factors impacting the cost-efficiency. For
example, a blended element could be considered: a brief kickoff being delivered through
desktop web conferencing, using a web conferencing system that requires no travel for

3 This comparison of instructor time versus student time away from the workplace reinforces the point made by Rosenberg
     (2001) that the largest expenditure is not in instructor costs but in lost opportunity costs when students are away from the
4 Rosenberg (2001) contends that e-learning is typically more efficient, because it can take from twenty-five to sixty percent less
    time to convey the same amount of information as in a traditional classroom setting.
instructors or students and no additional expenditure (assuming seat license purchases
have already been made and seat time is available). To extrapolate further the benefits
of speedier online learning in this example, what is the real benefit to the organization of
having a trained and ready workforce in one-fourth the time? Certainly, overall
productivity from online learning would be enhanced, whereas the delay in traditional
classroom learning could represent real business delays, and therefore, costs.

Determining online development costs

       Boettcher (2004) contends that in the current online learning development
environment, online practitioners quite possibly can determine cost without factoring in
capital costs for setup of online hardware and software, instructional learning curve
(costs for tool training, professional development for online learning, research, learning
management systems (LMS), etc.) as was required a few years. Based on the growth of
online learning in the workplace, learning practitioners can often assume these basics of
online development are in place, or at most, are added in as a recapture type cost.
Boettcher also contends there are three five-year periods involved in online learning:

Table 5 – Progression of Online Learning

First 5-year period …        Next 5-year period           Last 5-year period
Launch online learning       Establish course             Refine and
                             infrastructure and course    Institutionalize online
                             development model            learning
 Hardware and                Infrastructure              Infrastructure,
   software                     development                  including networking
                                                             and support, is
 Support and training        Learning management           assumed and part of
                                systems (LMS) and            campus environment
 Infrastructure                support
   development                                             Wireless
                              Networking and               communications
 Networking and                wireless access
   access to network                                        access everywhere
                              Faculty and student
                                personal knowledge

       Boettcher (2004) further contends that in the academic world, a commonly used
estimate for faculty to develop one online course (assuming all other things being equal)

has moved from approximately 800 hours to a little over 400 hours. Obviously, those
universities that train faculty how to convert traditional courses to online courses the
faculty will teach, have made a commitment to their online learning programs.5

          “This is faculty time, and does not include the time for other support
          personnel, such as project managers, instructional designers, or other
          support. However, as faculty develop expertise, as the tools get better,
          designing and developing online instruction becomes closer to the time
          required for developing face-to-face instruction. It is the transformational
          design and the building of technology habits that takes time now…. We
          have many challenges going forward in this area as the standards and
          metrics for costing instruction remain in flux and difficult to define—
          probably because the instructional mission is so integrated with an
          institution’s multiple missions.” (Boettcher, 2004, paras 8 and 16).
Online learning successes – both financial and from the learner’s viewpoint – in the
          “Corporations, too, see e-learning as a cost-effective way to get better-
          educated employees. Indeed, corporate spending on e-learning is
          expected to more than quadruple by 2005, to $18 billion, estimates IDC.
          At IBM, some 200,000 employees received education or training online
          last year, and 75% of the company's Basic Blue course for new managers
          is online. The move cut IBM's training bill by $350 million last year,
          because online courses don't require travel” (Symonds, 2001).
          Walker (2003) contends that virtual learning in the workplace will become one of
the major uses of the Internet – in fact, it is predicted by pundits to become as pervasive
as email. In the workplace, speed of instructional delivery and learning retention rates
become a financial focus, clearly understood by leaders who make the decisions to fund
online learning. Further, Walker reports Home Depot has cut learning time in half and
doubled retention [italics added]. This calculation is exactly the direction business
leaders desire. In other words, this report is a clear expression of return on investment
businesses seek. Another powerful and pervasive example of online learning being
faster with better retention is expressed by McDonald’s Restaurants. Walker contends
McDonald’s electronic learning stations are located in about one-third of their
restaurants; training costs are fifteen to twenty-five percent less with online solutions,
which are planned for all 30,000 restaurants world-wide.

5 University of Maryland University College has created a required course for their faculty. Until faculty successfully completes
     the course, online delivery is not allowed.
       Interestingly, Home Depot considers its kiosk-delivered self-paced online
learning superior to a more passive classroom experience. If learners fail to “click” their
way through, the learners will not receive the needed information. This writer contends
Home Depot has experienced the most popular and economical benefits of online
learning: just-in-time and just-enough learning for improved performance in the
workplace. Jusela of Home Depot also reports, according to Walker (2003), the
capability the web facilitates in keeping learning materials updated. With the thousands
of products Home Depot stocks, classroom learning materials would be out of date
before being printed, while web-based-training facilitates scalable real-time updates and
company-wide distribution of data.

       Walker (2003) illuminates another economic aspect of online learning alluded to
earlier: employee learning time compression. Black and Decker’s training executive,
Walker reports, estimates one hour of online learning (developed internally) is replacing
an average of three to four hours of classroom time. Not only does instructor time in this
type scenario contribute a significant cost savings, but more importantly, employee time
away from the required productivity in the workplace is minimized. This employee time
savings is another clear example of online learning as a cost justification and cost
benefit to the bottom line. Generally speaking, employees, customers, and partners in
the workplace find corporate online learning to be convenient and in fact, a preferred
method, once technical hurdles and feelings of isolation are overcome.

       The United States Army has worked to provide both workplace virtual learning
and university distance education that is embraced by its learners/soldiers. Aside from
pervasive online learning during work hours, over 30,000 soldiers have been enrolled in
online degree programs, at eArmyU ( From these encouraging
reports, one could logically conclude the existence of online learning success in the
military workplace, where both leaders and employees are satisfied with online learning.

       “Quantifying savings isn't easy, but the Justice Department took a stab at it in
evaluating a pilot for leadership training…. The department said it was able to train
more than 10 times the number of managers in leadership skills at less cost using
electronic courses from a commercial vendor. The department estimated that it saved
$10.5 million by enabling managers to take 4,247 electronic courses over two years,
compared with the cost of classroom training…. The Justice Department found that 71
percent of those who took the online courses -- produced by a San Francisco vendor,
Ninth House Network -- rated them ‘equal or superior’ to classroom training” (Walker,
2003, paras 13 and 14).

         While Walker (2003) cautions these examples do not necessarily indicate that
online learning is “booming,” there is solid evidence it can be a very desirable choice, as
long as technology availability is not misinterpreted as a guarantee for a positive
learning outcome.

         One could then logically ask the question: if online learning is then often proven
to be cost justified and of cost benefit, what is the future of online learning in the
workplace? Greenspan (2003) quotes Brandon Hall as predicting estimates of online
learning growth from $10.3 billion in 2002 to $83.1 billion in 2006, and to $212 billion by
the year 2011. “The [online learning growth] trend is evidenced by an 80 percent growth
increase from The University of Phoenix Online — whose virtual campuses boasted
72,230 students as of May 2003” (para 2). In addition to the workplace and higher
education, online learning appears to be cost justified in some cases, according to a
recent survey conducted among K-12 schools6:

        Laptop usage increased forty-three percent in one school year
        Wireless network usage increased fifty percent from the previous year (Report
         highlights technology trends … para 3).

         Further, Greenspan (2003) quotes Market Data Retrieval as MDR presents some
admittedly intriguing data:

        one-third of K-12 schools currently offer online learning
        over half of high schools in rural areas offer online learning for specialized
        over one-third offer continuing education online to faculty (this is similar to
         workplace learning).

6 “Technology in Education 2002, a report released by Market Data Retrieval last October [2002], illustrates the tremendous
    impact government programs and local initiatives have had in making technology in the classroom a reality for children
    across the United States. The report also points out that despite rapid improvements in ratios of students to computers,
    networks, high-speed Internet access, and classroom access, teachers still have difficulty integrating technology into
    classroom instruction” (retrieved October 19, 2004 from <>). The report is based on
    a survey conducted during the 2001-2002 school year that reached 87,100 public schools in the U.S. and received a 29%

Choosing course types to optimize ROI

       When thinking of aligning online learning goals with business goals, it appears
those in the information technology (IT) field consider online learning a good
investment. “Integration and e-learning [italics added] have proven to be two of the best
areas of IT investment, according to Nucleus Research analysts in a 2002 publication
on technology investments that were bringing high returns” (E-learning: Planning…,
para 1). The study evaluated both small and multi-billion dollar online learning programs
where some leaders estimated online learning ROI to be an astounding 1000 percent!
Successful online learning launch strategies incorporated this advice:

       1. Determine business goals before technology vendor discussions begin
       2. Choose a short launch time, less than six months
       3. Plan to move employees to the new system – success will not happen by
       4. Train everyone involved with the new technologies and face adoption issues
       head on.
       Those launching online learning programs need to be clear about where they
expect to experience ROI success. For example, many expect to save money on travel
and instructor costs. Others expect to see measurable gains in productivity and
contribution in the workplace by those who completed the online learning programs.
One interesting aspect is to determine what type of online learning course makes sense
for the organization.

Table 6 – Online Course Types (E-learning: Planning…)

Low Fidelity                Medium Fidelity              High Fidelity
 Requires least student-  Relies more on           Customized to needs
   teacher interaction       student-teacher           of each learner
 Best choice for                                    Requires lots of
   replacement (reduce     Influences job             student-teacher
   training expenditures     performance and           interaction and
   while preserving          corporate revenues        personal evaluation of
   instructional value of    more directly             progress
   original subject
   matter)                 Related online may       Generates ROI by
                             cost more, but            using technology
 Ease of assessment         payback is better         (e.g., using a blended
   [evaluation]                                        solution to boost
                           Most traditional models    productivity while
 Ease of conversion to          fall into this category.       reducing delivery
   web conferencing                                             costs)
                               Weigh benefits (e.g.,
   [e.g., Excel™ course         reduced travel)
   converted from               against development
   classroom to                 and infrastructure
   PlaceWare™ or                costs
   WebEx™ offering]

       “For the most strategic deployments, they [researchers] recommend you
       identify low-fidelity courses you can deliver at a lower cost, and provide
       high-fidelity e-learning courses to improve the overall quality of learning”
       (E-learning: Planning…, para 7).
Making a business case for online learning

       Ward (2002) contends that businesses must clearly demonstrate to leadership
that choosing to support online learning will yield both concrete and direct organizational
benefits. This ostensibly means that establishing ROI through simply cutting costs is
only the beginning, as online learning can then positively impact performance in the
workplace, in line with organizational initiatives.

       While leaders will popularly espouse a belief that employees are the most
important assets (human capital), and that the digital age has arrived, the training
department continues to be perceived in some cases as a support function to benefit
employees. What learning organizations must do to be funded – and in fact, to survive –
is to position the training value proposition as an imperative and valuable contributor to
organizational performance. Core processes learning of any type (traditional, blended,
online) is, therefore, a driver, instead of a drain of profit. This writer contends effective
online learning can further enhance both overall ROI and productivity in many cases.

       For example, if a current and traditional customer service training course takes
five days, and online or blended learning reduces that to three days, the initial costs
savings are obvious. If ten new representatives go through training each month, one
can quickly see these savings.

Table 7 – Example comparison of traditional training to online learning

Traditional    5 days x 10 employees = 50 employee days x 12 months = 600
Training       person days of training x $150 daily pay rate = $90,000 employee
Program        training costs annually
Online          3 days X 10 employees = 30 employee days x 12 months = 360
                person days of training x $150 daily pay rate = $54,000 employee
Learning        training costs annually
Cost            $90,000 - $54,000 = $36,000 – a forty percent reduction

       It is also important for learning professionals and other leaders to anticipate the
benefits of a more quickly trained and ready work force, and the impact that can have
on the business. One method could be to ask the financial leaders – in advance! – what
specific ROI estimate would be appropriate when training days are cut, for example, by
forty percent, with that forty percent in time savings being added to the workplace
output, rather than to the training effort.

       Ward reminds the learning professional that high turnover rates can be offset to
some degree because headcount could be reduced when customer service
representatives can move more quickly to the job. “The salaries of those employees are
added to the other benefits. In R&D, e-learning…tools can be positioned to get products
and services put together more quickly and efficiently. This shortens cycle times…”
(2002, para 15) and gives workers more time to do the jobs for which the workers were
hired. It is simply obvious this financial-impact logic appeals to those leaders
responsible for doing the difficult work of keeping the organization viable and profitable.
Therefore, learning professionals are called upon to either reduce costs or drive
revenue around core processes – or ideally, to achieve both goals. To do otherwise is
almost certain failure. This writer contends online learning is a key to this important
opportunity in many cases – the appropriate analysis can drive the value proposition,
which identifies those opportunities that are most promising for an online solution.
“Driving profits and reducing costs will never go out of style in the mind of a c-level
executive….” (2002, para 20).

A closing look at academia and online learning as a delivery choice

       As mentioned earlier, measurement for education is typically expressed
differently from measurement for training in the workplace. Typically, in online
education, number of student learning hours (SLH) is an indicator, or common
denominator. If one looks at the law of supply and demand, the workplace driver of
lifelong learning for the adult has had a positive impact on the demand for higher
education. Not only is there a growth in enrollment, partly due to an expanding
population, but also there is an increase in student expenditure (Jewett, 2000). Like any
business, institutions of higher education must find the profitable blend between faculty
productivity and costs per students. It can be argued the pursuit of online learning as
both a way to attract students and a method to manage costs (e.g., less brick and
mortar) is a current phenomenon. There is hardly an institution of higher education in
the new millennium that is not involved to some degree in online delivery of the
educational product.


       While substantial progress has been made, this writer contends the first hurdle to
overcome in positioning online learning as an effective investment is to convince
leaders and learners of its viability. This challenge is not insignificant, but is a
cornerstone for online learning program success.
       Once beyond that hurdle, learning professionals must prepare themselves to
align online learning with business objectives and to demonstrate measurable evidence
that these programs do directly and positively impact the bottom line, improve the
organization in many important ways, and make an investment for the organization’s
future. Some key points in achieving cost justification and cost benefit have been
surfaced herein: attaching dollar values to eliminating deficiencies, reducing travel
costs, increasing employee retention rates, and positioning online learning as a valuable
contributor to organizational performance. The mission to decrease costs and increase
revenue can never be abandoned.
       While there are many indicators that online learning is beginning to emerge as a
cost-beneficial choice, supporters of online learning must continue to frame online
learning from an economic and organizational health viewpoint. Otherwise, learning
professionals may be doomed to fight for survival and may lose the opportunity of their
professional lifetimes, to change the face of learning forever.


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