Can Online Training Save $$?


October 1999

Can Online Training Save $$?


Companies are embracing on-line learning to address many of their training needs, though questions remain whether Web-based training saves money over traditional formats. In “Real ROI Numbers” (Training & Development, August 1999), Rober Schriver and Steve Giles describe a study they conducted to assess benefits and savings for intranet training at a nuclear facility in Oak Ridge, Tennessee.

The Oak Ridge National Laboratory is owned the US government. When this study began in 1996, Lockheed Martin Energy Research was the management and operations (M&O) contractor at Oak Ridge. The workforce at the facility was more than18,000 strong, consisting of craft personnel, professional staff, and prominent scientists. Because training was such a large budget item for Lockheed, managers hoped to reap significant savings by using the company’s intranet whenever possible for delivery of instruction.

The company was required to address several preliminary issues to make intranet training feasible. These included security issues in a highly sensitive work environment, platform selection, course identification and structure, and deciding when it was appropriate for Web-based learning to replace classroom instruction.

The authors evaluated almost 11,000 Web-based courses. Using the existing cost-accounting system, all expenses were recorded for the project. The largest savings from Web-based instruction resulted from participants not needing to travel to class. Some courses on the Web also took less time to complete than classroom savings. Another area of savings was in simplified record-keeping which reduced costs in instructor hours. The authors also considered less tangible benefits such as classes that were eliminated, space freed for other uses, employees not needing to wait until a class was available, and employees avoiding disruption to productive schedules. The bottom line, the authors report, was a total gross savings of $1,690,519 with a net savings of $1,511,652 and an impressive return on investment. CIDMIconNewsletter