Needs Assessment:


Careful study of the needs of the company is required before recommending training or documentation.



Example:

Using the 80/20 Rule, an analysis is conducted of business processes used by 80% of employees. Time and expense reporting are identified. Although standard software is used for reporting both, business rules and account codes are unique to the company. An analysis of existing documentation and training costs, as well as hidden costs such as accounting errors are reviewed. A return on investment (ROI) calculation made to determine if CBT/WBT (computer based training/web based training) would be cost effective.



Cost / Benefit Analysis:

Key Assumptions

  • Training of 100 new employees in groups of 10 over one-year period. Classes arranged in 10 sessions of 2 hours to cover both time and expense reporting policies and procedures.
    Total 200 employee hours, 20 instructor hours.
  • Accounting identifies approximately 2% reporting errors for both activities for all employees (1000 total) over a one-year period. Average time to complete and reprocess a report with an error 0.5 hour. 1000 employees with weekly time reports plus 1 monthly expense report equals 64, 000 transactions, 1040 which contain errors.
  • Assumes instructor salary of $65K, average employee salary of $30K
  • Assumes CBT/WBT development at 40 hours per hour of instruction @ $150/hr.


    Financial Summary


    Alternative A - Traditional Training

    Employee Wages, 200 hours $ 2,900
    Instructor/Department Manager Costs, 20 hours $ 625
    2 % Reporting Error Costs $ 7,540
    Total Cost $11,065



    Alternative B - CBT/WBT Training

    Assumes instruction will be completed by employee on line. On line training is estimated to take approximately 50% of classroom instruction time. This reduces actual total training from 2 hours to 1 hour. Readily available process documentation and training expected to reduce monthly reporting errors from 2% to 1%.

    Employee Wages, 100 hours $ 1,450
    Development -1 hour Training Materials (WBT/CBT) $ 5,000
    Reduction to 1% Error Costs $ 3,770
    Total Cost $10,220

    Summary of savings of WBT/CBT in comparison with traditional training:
    Alternative B:
    First year savings of $ 845.
    Second year and beyond: (Development costs removed) Annual savings of $5,845.



    Capital Requirement

    Example A has no capital requirement and assumes no classroom costs.
    Example B has a capital requirement to allow access to a web interface for deployment of web pages.
    If not already available internally, access can be obtained for as little as $100 per month.