An article in CIO magazine, Cisco on Video (by Megan Santosus, March 8, 2004), and subtitled "The networking equipment giant is sure of the return on investment for its e-learning system" points out the difficulties in defining ROI for many IT initiatives today:

"The dilemma: While the cost of technologies have a definitive price tag, the benefits—more informed employees, streamlined communication with customers, repeatable and consistent processes—often do not. "

The article explores Cisco's video elearning system, vSearch to "hold virtual team meetings and new technology meetings and to support product launches, all activities that previously required travel to classroom sites. In all, says Kelly, Cisco uses vSearch for 50 live broadcasts each month."

According to Tom Kelly, Cisco's vice president of the Internet learning solutions group, the cost savings for fiscal year 2002 are estimates at $133 million, but only a portion of this can be directly tied to the elearning system.

"For ISO training, for example, Cisco budgeted $1.6 million; in the end, the company spent $16,000 by moving the training to video and audio online."

"As for direct cost savings, there's one solid area Cisco can point to. Using vSearch, Cisco has taught people how to do shipping and returns the exact same way in the event of a manufacturing problem. "By changing to a better process, we've saved $300,000 per quarter," Kelly says."

Those two items account for under $3 million. Where does the other $130+ million of savings come from?

"... there are a lot of benefits that—while seemingly logical—don't yet have a direct line back to vSearch. For example, when the salesforce trained 60 percent of a select group of salespeople on a targeted technology, revenues for that group did go up. Kelly is now trying to figure out if there's a direct cause-and-effect relationship between e-learning and revenues. "

While these figures may not be enough to convince your organization invest in a video elearning, Cisco isn't waiting for the hard numbers - it's already strongly convinced of the value it's getting.

10:15:09 AM    
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