CLOs know that learning is imperative to success with enterprise software rollouts, but how do you justify your case to the other leaders of your organization? With PeopleSoft’s help, learning executives can not only build the case to justify investments
by Site Staff
December 17, 2003
CLOs know that learning is imperative to success with enterprise software rollouts, but how do you justify your case to the other leaders of your organization? With PeopleSoft’s help, learning executives cannot only build the case to justify investments in training, they can also track the success of their investments.
PeopleSoft recently announced a new tool for planning and measuring ROI that will help its prospects and customers predict the ROI of their investments in software training and then track their results. The tool will help learning executives build the business case to support their education programs.
With large enterprise-wide software rollouts, training for end-users is imperative for success, yet when budgets are on the line, training is often one of the first cuts. The results of these cuts can be disastrous for the success of the project. According to Robin Gunn, vice president of education services for PeopleSoft Global Services, industry experts report that trained employees get up to speed five times faster than employees who are not trained. This can save companies thousands of dollars per employee.
If companies can save so much simply by ensuring the workforce is trained prior to enterprise software rollouts, why do they so often cut the budgets for training? Part of the problem is the difficulty many learning executives have in supporting their investments in training. “One of the issues that we’ve encountered working with our customers over the last couple of years is obviously that the scrutiny around any type of spend in corporations has gone up dramatically,” said Bill Henry, vice president of marketing and strategy for PeopleSoft Global Services. “And one of the things our customers have struggled with is how do they sit down and build out the education plan both for the project team who’s going to be doing the implementation or the upgrade project, as well as for the end-users to help them get up to speed and get productive with the new system quickly.”
But building out the education plan isn’t enough, if down the road the budget for that education is going to be cut. “Many CLOs went about building the education program, making sure all of the things were in place that were needed, and then at some point in time, there’s a budget cut or earnings pressure, and things start getting cut,” Henry said. “Many of our customers tell us that they have had trouble justifying the economic benefits of their education program and that their programs were cut more than they thought they should be because other people were able to better justify their expenditures or better quantify the benefits.”
Tom Cooper, director of education strategy for PeopleSoft Global Services, said that often, people will put together the business plan for the implementation of enterprise software and include training simply as a cost. He explained that PeopleSoft customers actually want to show the value of the education program to ensure that the budget doesn’t get cut, but also that the right amount of training is delivered to ensure the maximum return on the company’s investment in the new software.
PeopleSoft ROI for Training allows learning executives to move beyond cost to use ROI metrics that correspond with the business objectives of their organization. Cooper explained, “We’ll come in free of charge with the delivery managers and get an understanding of what they’re doing and what their business objectives are and gather those business objectives and then put in estimates for the total cost and the total benefits.”
Henry explained that it’s not just about helping the customer build the right training program, but building the business case to support that training and providing the framework to track the results over the life cycle of the enterprise software project life cycle. “They can track it and make sure that the actual results line up with the intended results,” he said.
The PeopleSoft approach to building the business case for enterprise software training differs from traditional solutions, which simply compare the cost differences between using different training media, such as e-learning and instructor-led training. “We’re not focusing in on benefits such as getting your students or employees up to speed faster or maybe reducing the support calls,” said Cooper. “And by doing that, they can shift from saying, ‘Hey it’s going to cost this much, and we might save some if we go e-learning,’ to ‘This entire education program is going to cost $800,000, and we’re going to see $1.1 million in benefits driven from reducing the time to get up to speed and reducing our support calls.”
He added, “It just gives it a little bit more validity as they take that up the chain to their C-level folks to be able to provide more value from their education program.”
Henry explained that education is a critical part of the cost of an enterprise software project, but is easy to cut if there are not demonstrable, quantitative results. For example, Henry said that PeopleSoft had worked with a customer using the ROI too in prototype mode. This particular customer was looking at the cost of getting the users of a new CRM infrastructure up to the level of productivity they were at with the old system without using training. “It was going to take them five times longer to get productive without training as it would take them with training,” he said. “And we did the math, and it worked out to be that more than $3,000 per user was the real economic benefit from having a comprehensive end-user training solution.”
Henry said one of the great benefits for CLOs is that the tool will allow them to use the language of the CFO to make their business case. “This really translates the learning agenda that they know is the right thing for the business into the dollar impact to the business. They need that to talk to the CFO,” said Henry. “This tool and this service really help translate from the language of implementing software and learning into the language of finance and ensure that you’re able to justify the education programs that you know you need as part of the enterprise software project.”
Ultimately, the chief aim of many learning executives is to ensure than company training contributes to the success of the business and the achievement of the goals of the organization. Cooper said the tool “will help them align their education program with the corporate objectives, and I think that’s something that all CLOs are always looking at.” He added that PeopleSoft ROI for Training will allow CLOs to demonstrate how their education objectives tie into the overall corporate objectives.
PeopleSoft ROI for Training is a free tool and is available now. For more information, go to http://www.peoplesoft.com.
Emily Hollis is associate editor for Chief Learning Officer Magazine. She can be reached at firstname.lastname@example.org
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