How to Build a Business Case for Formalization of Learning Analytics

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Speaker: Jeffrey BerkChief Operating OfficerKnowledgeAdvisors

Moderator: Deanna Hartley Senior EditorChief Learning Officer magazine

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Deanna HartleySenior EditorChief Learning Officer magazine

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Jeffrey BerkChief Operating OfficerKnowledgeAdvisors

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How to Build a Business Case to Measure the Effectiveness of Learning Programs

Jeffrey BerkChief Operating Officer

www.knowledgeadvisors.com

© KnowledgeAdvisors. All rights reserved.

Agenda

9

Provide brief overview of KnowledgeAdvisorsDescribe the challenges of leadership programsDiscuss the types of leadership metrics Articulate the business case components Compute the business case and provide examplesReview techniques to further the business caseConclude with a Top 10 Business Case List


Leader in Learning & Talent Analytics

Continuously Improve

Optimize Results

450+ Clients

9 of 10 TrainingHall of Fame

5 CLOsof the Year

4 of 5 Best Places to Work

Onboarding EDITION

Learning EDITION

Leadership EDITION

Engagement EDITION

Capabilities EDITION

Performance EDITION

1st Year Retention

Speed to Performance

Expertise & Skills

Workforce Performance

Manager Capability

Strategic Vision & Execution

Bench Strength

Talent for Future Success

Retention of Talent

Workforce Productivity

Goal Achievement

Organizational Alignment

Manager Capability

Strategic Vision & Execution

Decision Support

How do we reduce turnover among leaders?What are the gaps for our emerging leaders?What leadership areas need development?

Why does it matter?

14

It’s about having a quality control system for leadership programs

It’s about ensuring credible executive reporting that showcases value, impact, and utilization of leadership programs

It’s about maintaining advanced analytics that provide data to drive toward high performing leaders


Leadership Development KPIs

15

Outcome Metrics - Business Outcomes Leader RetentionEmployee EngagementEmployee RetentionLeader Performance RatingLeader Financial Management

Effectiveness Metrics – Program PerformanceDelivery QualityKnowledge GainApplication to JobBusiness AlignmentValue

Efficiency Metrics – Cost and Activity# of Participants% of Employees TrainedTotal L&D InvestmentL&D Investment per ParticipantCourses UtilizedClasses ConductedInstructors UtilizedLocations Used © KnowledgeAdvisors. All rights reserved.

Business Case Components

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1. Increased leader productivity– Improved performance in running training like a business– Improved workforce performance through data driven decision-making– Research shows 2.4% improvement in performance from analytics

2. Reduced waste (scrap learning in leader programs)– Over half of training investments are not optimally used– Most organizations waste .5% to 2% of revenue on under-used training– Lack of manager follow-through is a significant problem

3. Reduced administration in measuring leader programs– Majority of time spent on measurement is transactional and tactical– Talented practitioners are doing data compilation vs. data analysis– Data is not provided with any relevant reference points to make sense


Performance - Examples

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1. Major services firm realized $200,000 increased annual profit by using predictive analytics capabilities.

2. Through measurement a leading federal agency significantly increased output and business impact without increasing budget over a 3 year period.

3. Major telecommunications firm using metrics was able to increase sales by $1.25 million dollars through better supply chain management.

4. 15,000 hours in improved productivity by a floral company in identifying appropriate training investments via data analysis.


Performance - Calculation

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$1,000,000,000 Revenue

25% Labor Percentage

$250,000,000 Labor Cost

1% Increased Productivity from Measurement%

$2,500,000 Increased Performance from Measurement


Waste - Examples

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1. 25 retail stores avoided $100,000 of wasted training. Retail store training measured after first of six weeks saw 1 set of ineffective trainers and discontinued using them.

2. Instructor compared herself to other instructors and changed approach. 6 months of additional sessions performed better to avoid at least $100,000 in scrap learning.

3. $500,000 in funding gained by measuring scrap learning. Services firm measured training results and found high quality but low impact. The program was retained and additional funding rewarded to consult with managers on increasing impact.


Waste- Calculation

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Description

$1,000,000,000 Revenue

1% L&D as % of Revenue

$10,000,000 L&D Investment

50% Waste or Unrealized Value %

$5,000,000 Waste or Unrealized Value

5% Waste Reduction from Measurement%

$250,000 Waste Reduction from Measurement


Admin - Examples

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1. 75% reduction in administration costs from automating measurement process vs. manual measurement.

2. 15 minutes to retrieve actionable data for decision-making vs. 15 hours prior to automating the measurement process. This automation of 1 report alone saved over $36,000 per year.

3. $400,000 savings by major accounting firm that used smarter measurement in a practical way to yield similar results compared to complex and burdensome alternative measurement techniques


Admin - Calculation

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Description

$55,000 Salary of 1 FTE admin for metrics

$50,000 Cost avoided from unnecessary analysis

$50,000 Cost to replicate fraction of benchmarks

75% Admin savings from measurement and benchmarks

$116,250 Administration Savings from Measurement


Summary – Business Case

23

Value Summary

$2,500,000 Performance Gain

$250,000 Waste or Scrap Avoided

$116,250 Administration Savings

$2,866,250 Total Quantified Value


A Tale of Two Programs

24 © KnowledgeAdvisors. All rights reserved.

1. Company A went back 2 years… and identified that they had 1,019 people rated #3, “needs improvement” in recent performance reviews

2. They calculated that they spent an average of$13,090 per year on highly visible leadership development (Coaching, counseling, mentoring, retraining and manager time) to elevate them to #1’s ,“high performers”

3. They identified 2 years later… the number that were currently ranked as #1’s, was ZERO

A Tale of Two Programs


Leadership program with optional ‘project’Determine if optional project influenced employee retention in leadership programEmployees with no learning projects averaged a turnover rate of 21%Employees with 2 or more learning projects averaged a turnover rate of 2%Clearly the control group vs. learning group shows a difference

Furthering the Case

26

Create a 1 page business case (simple and concise). Emphasize productivity, waste and admin.

Put a brief scorecard together that has at least 1 metric for outcome, effectiveness and efficiency data.

Do a pilot of analytics. Evaluate your training in an analytics tool, compare to benchmarks, view results in reports, dashboards and scorecards.


Dashboard/Executive Reports


Top 10 Business Case List


1. Alerts. Metrics should alert you to breakdowns.



1. Alerts. Metrics should alert you to breakdowns.2. Predictive Measures. Metrics should forecast value/ROI.



1. Alerts. Metrics should alert you to breakdowns.2. Predictive Measures. Metrics should forecast value/ROI.3. Social Learning. Metrics to validate informal learning.



1. Alerts. Metrics should alert you to breakdowns.2. Predictive Measures. Metrics should forecast value/ROI.3. Social Learning. Metrics to validate informal learning.4. Qualitative Analysis. Harness feedback quickly.



1. Alerts. Metrics should alert you to breakdowns.2. Predictive Measures. Metrics should forecast value/ROI.3. Social Learning. Metrics to validate informal learning.4. Qualitative Analysis. Harness feedback quickly.5. Business Outcomes. Measure alignment to results.



1. Alerts. Metrics should alert you to breakdowns.2. Predictive Measures. Metrics should forecast value/ROI.3. Social Learning. Metrics to validate informal learning.4. Qualitative Analysis. Harness feedback quickly.5. Business Outcomes. Measure alignment to results.6. Cycle Time. Automate reporting to stakeholders.



1. Alerts. Metrics should alert you to breakdowns.2. Predictive Measures. Metrics should forecast value/ROI.3. Social Learning. Metrics to validate informal learning.4. Qualitative Analysis. Harness feedback quickly.5. Business Outcomes. Measure alignment to results.6. Cycle Time. Automate reporting to stakeholders.7. Cost Savings. Reduce admin and increase data use.



1. Alerts. Metrics should alert you to breakdowns.2. Predictive Measures. Metrics should forecast value/ROI.3. Social Learning. Metrics to validate informal learning.4. Qualitative Analysis. Harness feedback quickly.5. Business Outcomes. Measure alignment to results.6. Cycle Time. Automate reporting to stakeholders.7. Cost Savings. Reduce admin and increase data use.8. LMS ROI. Combine LMS data for powerful reporting.



1. Alerts. Metrics should alert you to breakdowns.2. Predictive Measures. Metrics should forecast value/ROI.3. Social Learning. Metrics to validate informal learning.4. Qualitative Analysis. Harness feedback quickly.5. Business Outcomes. Measure alignment to results.6. Cycle Time. Automate reporting to stakeholders.7. Cost Savings. Reduce admin and increase data use.8. LMS ROI. Combine LMS data for powerful reporting.9. Waste Reduction. Identify scrap and ways to reduce it.



1. Alerts. Metrics should alert you to breakdowns.2. Predictive Measures. Metrics should forecast value/ROI.3. Social Learning. Metrics to validate informal learning.4. Qualitative Analysis. Harness feedback quickly.5. Business Outcomes. Measure alignment to results.6. Cycle Time. Automate reporting to stakeholders.7. Cost Savings. Reduce admin and increase data use.8. LMS ROI. Combine LMS data for powerful reporting.9. Waste Reduction. Identify scrap and ways to reduce it.10.Business Insights. Data-driven decisions.

Next Steps

38

Thank you for explaining your needs to us

Just ask and we can…. • Send you a business case

templateProvide a sample leadership dashboard and sample leadership executive reportProvide a business case white paper emphasizing quantifiable benefits to analytics in L&D


Contact Us

39

For further information contact:

Jeffrey BerkChief Operating Officer+1 312 [email protected]


mailto:[email protected]

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Jeffrey BerkChief Operating OfficerKnowledgeAdvisors

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How to Build a Business Case for Formalization of Learning Analytics