The ROI of Digital Knowledge

Return On Investment

The benefits of training and development for individuals are well-known. However, a common question that often gets unanswered is, what is the return on investment (ROI) of training?

Looking at the last few decades, it is clear that the evidence on the business impact of learning has been largely sparse. According to one report, less than five percent of Learning & Development (L&D) programs are assessed for ROI. There is great deal of evidence that the majority of organizations do not track and measure training.

At the same time, the interest in measuring the business impact of training and development has never been higher. Business leaders understand that L&D investments of today are critical for developing the workforce of the future and survivability of their organizations.

Right Intentions But Wrong Tools

In his landmark work, “The Training Measurement Book,” Josh Bersin illustrates that Kirkpatrick’s Four Levels and Phillip’s Return on Investment (ROI) are the two widely used training measurement methods in today’s organizations.

Having been invented before the era of digital learning, these methods are used to evaluate instructor-led training contributions to businesses. However, neither method manages to make causal connections between reaction to training, retention rates, transfer rates, and productivity conversion rates.

Kirkpatrick’s measurement model demonstrates a taxonomy outlining four preferred outcomes: Satisfaction (Reaction), Learning, Application (Job Impact), and Results. But these outcomes can occur at any time without any tangible impact to business.

Similarly, Phillips’ ROI has done very little but to add a fifth layer to Kirkpatrick’s. The pattern remains the same: no tangible cascade effects, no established causal connections between how acquired skills and knowledge can impact the bottom line.

Leveraging Artificial Intelligence and Digital Platforms

By taking learning out of classrooms and bringing experiential learning into a digital platform, organizations can systematically measure the business impact of training activities and ROI.

Artificial intelligence (AI) and a well designed Learning Management System (LMS) will do more than just registering employees into courses and tracking completions. In fact, traditional eLearning has evolved to offer a more permeable structure of knowledge. AI can offer real-time knowledge transfer, proof of behavior, increased privacy, and most importantly, a more relevant and effective Knowledge Experience (KX) that will produce a more engaged learner and a more productive workforce. And of course, all of this can be tracked directly towards business results. If programmed the right way, it can establish causal chains all the way from needs assessment to desired business results, and the effects of each training intervention.

This leads to three actionable improvements for businesses:

  • Establishing causal links between how individual and team performances come to influence the bottom line effectiveness
  • Developing timely interventions such as post-training support functions, follow-ups and supervisory clarifications that will maximize training results, and
  • Digitization of training workflow creating a more effective and scalable organization

Increase Your ROI of Training

At Xpan, we understand how important it is for organizations to measure the impact of training, learning, and development activities for their business outcomes. It is our mission to ensure that your digital knowledge solution investments drive your business outcomes.

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