ROI ain't what it used to be, according to Jay Cross, resident guru and curmudgeon emeritus of the Internet Time Group. With the possible exception of Autodesk's visionary Wayne Hodgins, no one else on the high seas of e-learning has Cross's foresight or humor. With a prescience bordering on the clairvoyant, Cross is constantly sought out for his industry forecasts and insights.

As to ROI, Cross is typically irreverent: "ROI is a traditional financial measure, developed by DuPont, and once credited with making General Motors manageable. But it hasn't kept pace with the times. The R is no longer the famous bottom line, and the I is more likely a subscription fee than a one-time payment."

Cross insists that traditional ROI matrices are an anachronism when applied to online learning. Why? Because traditional ROI has no measuring stick to distinguish a good idea from a bad one, so excellent training hits the books at the same value as bad. The trend and empha­sis is on understanding business strategy and goals and how training moves the organization along. Maybe the future is ROS, return on strategy.

Thus, Cross discourages e-learning proponents from try­ing to sell e-learning via ROI talk. "Consultants relentlessly drive home this message: `If you want to sell a big project internally, you've got to talk ROI ... it's the language senior managers understand ... being fluent in ROI talk enables you to position an e-learning proj­ect as an investment rather than a cost ... it's the secret handshake that gets you into the inner circle of those who control budget dollars, et cetera and et cetera.'

"Well, it's reality-check time," Cross counters. "Talking the ROI talk won't enable you to pass yourself off as an astute businessperson. You have the same chance of passing for French with a beret and Berlitz phrase book. A little knowledge can be a dangerous thing." Cross believes that executives making a significant business decision consider a wide range of factors and in­tricate potential trade-offs, such as these:

• How risks must be weighed against rewards
• How short-term aims need to be sorted from the long-term ones
• That any undertaking must align with strategic initiatives
• That scarce resources call for shrewd horse trading

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But remember what Jay Cross said about ROI: it ain't what it used to be. The old yardsticks no longer apply, and they can actually get in the way. As Cross posits, "Why measure incremental improvements when you're seeking the Holy Grail?"

True, traditional financial analysis works in most busi­ness accounting, but it goes askew when measuring intel­lectual capital and other off-the-balance-sheet improvements. Making business decisions entails a wide range of factors and involves intricate trade-offs-it's not all bottom-line dollars and cents.

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Says Cross, "Unless your training (or e-learning) unit sells training for a fee-generating its own revenues-the re­turns on investment come from satisfying the needs of busi­ness unit managers." He advises that linking e-learning re­sults to business results is more useful than coming up with pseudo-ROI figures. "The only valid training ROI is business ROI.’”

International Data Corporation (IDC) studied the buying behavior of corporate and IT training managers and con­cluded that ROI will no longer be measured in savings or re­duced cost of training. Instead, attention will be directed to "measurable changes to business metrics resulting from training investments." Those benefits will only emerge, how­ever, if vendors focus on solid instructional design and engaging learning environments.

Thus, a senior manager's appraisal of e-learning's impact is often visceral (gut instinct), based on how satisfied he or she is with employee performance and how much of that improvement the manager can ascribe to e-learning. As Cross puts it, "Feelings win out because the assumptions used to create the (ROI) numbers can always be challenged. Projects that evoke the best feelings make the cut."'

Why? Because managers own the problems that train­ing solves-online or offline. They're generally pragmatic, and their overriding interest is to get the job done now, if not sooner. The business unit manager is often e-learning's primary sponsor-along with HR and IT. Moreover, the manager understands the goal of any training, since it is he or she who oversees the environment in which performance gaps occur. Thus, the first step in measuring e-learning's impact on performance is eliciting the business manager's answer to the classic query "What's in it for me?"

When the learning is completed, assess the results according to benchmark measurements established with the unit manager. "Extrapolate behavior changes into measurable business," counsels Jay Cross. "There's no room for vagueness-and no backing away from visible quantitative evidence." He also suggests that further interviewing and a review of business results may be useful.

Finally, Cross advises presenting any findings and a simple cost/benefit analysis to the business manager or training sponsor-not a full-blown "ROI."

As Cross and others point out, present-day accounting is an anachronism when applied to e-learning. "Traditional accounting only recognizes physical entities," Cross explains. "Intangibles are valued at zero. Vast areas of human pro­ductivity-ideas, abilities, experience, insight, esprit de corps, motivation-lie outside its vision field. It doesn't rec­ognize that people become more valuable over time."

To many corporate executives today, Cross, the traditional concept of training ROI is obsolete. Business unit managers value time more than ROI. Major decisions are based on descriptive business cases, not pro forma budgets. Senior executives tend to be more interested in the top line (dynamic growth from new markets and innovation) than the bottom line (the accounting fiction of profits). Why? The answer, according to Cross, is simple:

"The 'Net changes everything."

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HOW TO CAPITALIZE ON E-LEARNING

Look to the learner. What are the real needs? What are the options available?

As Jay Cross points out, investment analysts seem to think that harvesting the rewards of e-learning is a breeze. "Simply convert your existing content to digital form, slap it onto the corporate intranet, and immediately save millions in travel, bricks and mortar, and instructor salaries while training all those IT workers everyone needs."18 Alas, such is not the case. You've got to customize the learning for the learners.

Epilogue: What to Do Now?

WHAT WORKS FOR YOU

One thing is certain-e-learning will evolve into something so simple, so eloquent yet all-pervasive and natural, that our grandchildren will wonder with dismay why we didn't see it coming. We believe that Wayne Hodgins, Marcia Conner, Jay Cross, and a host of others in the field are correct when they say that we're just watching this universe form. It will cool and coalesce to become so much a part of our everyday lives, we won't even think of it as a separate facet of work or play. It'll simply be how we do things.

As we said when we began, nothing is the same as before. Old technologies are changing; classroom walls are rearranging. As Jay Cross puts it so well, "The 'Net changes everything."

Or, the way we see it, the net of online learning that works is a net-net benefit for everyone, everywhere.