DIGITAL LEARNING BUSINESS CASE TOOL

Purpose:
The intent of this tool is to help build robust business cases to quantify and project the impact that a digital
learning program will have on the organization and its stakeholders.
Contents:
a)A list of the common value drivers that are behind digital learning business cases: ORANGE TAB
b)Detailed information around each step in the business case creation process PURPLE TAB
c) Sample Excel spreadsheet templates to fill out at each step of the process: GREEN TABS
- You can use the Excel spreadsheet templates on their own if you are familiar with the
process to follow already. Otherwise, it is recommended that you read the information around
each process step information beforehand to gain a deeper understanding.
- The Excel spreadsheet templates are meant as a starting point. Given that each organization
and digital learning program is unique, the templates will most likely require some degree of
customization to be relevant in any given case.
- As a general rule, it is best to avoid hard-coded data or references to external Excel
spreadsheets throughout the Excel business case model in order to facilitate others
understanding, using, or editing the model.

Classification of Metrics
Value Driver Overview

Value Driver Detail

Sample Metrics to Quantify Impact of Value Drivers

- Quantifiable = can be quantified more easily and included in the

financial projections of the core business case
Notes
- Enhancing = more difficult to quantify and should be included as
a supplement to the core business case in the "non financial
impact assessment" step

Mission-Related Value Drivers

Program reach

Learner outcomes

Programs ability to serve

a wide beneficiary base

Core content learning

achieved

Learning efficiency of
core content

Content quality
Ancillary learning
achieved

Learner job search

success
Learner engagement

Learner support

# of program enrollments

Quantifiable

# of program graduates
Diversity of beneficiaries reached

Quantifiable
Enhancing

Average improvement in learner assessment scores

Quantifiable

Flexibility of access to training

Enhancing

Customization of content to learner context, needs, learning style, and

skill level
Immediacy of feedback
Practical learning application opportunities
Consistency of content delivery across delivery modes

Enhancing
Enhancing
Enhancing

Digital learning allows programs to segment learners automatically and customize their course through the program, allowing for a broader range of beneficiaries to be served effectively.
In the context of digital learning, this comes down not only to traditional quiz-like assessments but to automated adaptive learning and gamification technology report outputs. As a result, the metrics are more granular and indicative of
true skill improvements.

Digital learning allows learners to acquire content to the same level of proficiency faster than traditional mediums

Scenario-based learning and gamification allow learners to apply the content in simulated environments to reinforce the learning while getting immediate feedback on their performance.
Digital learnings increased level of integration across delivery modes decreases the dependence of content quality on individual instructor proficiency.
Ease of content updates through the digital medium allows the content to be increasingly current and relevant through more frequent modifications. It also allows for greater involvement from program partners, increasing learners
exposure to diverse expertise.

Content relevance & update frequency

Enhancing

Average improvement in learners IT skill assessment scores

Quantifiable

IT skills are critical in the modern job market. Digital learning familiarizes learners with technology tools during the learning process, improving their proficiency in these IT skills.

Improvement in learner's self-directed learning abilities

# of learners that got a job after the training
# of these learners still employed 6, 12, 24 months after training
completion?

Enhancing
Quantifiable

Digital learning often involved a greater extent of self-navigation of content and self-learning which build learner independence and confidence

Learner earnings increase post-training relative to their pre-training

earning level.
Average amount of time spent engaging with the program
Program drop-out rates
Course re-enrollment rates (students who enroll in other courses upon
completing a course)

Extent of learner support Flexibility of learner support

Extent of alumni career
support services

Enhancing

- The ability to reach more learners with the program, across geographical boundaries, is a key advantage of the digital medium.
- The intention to grow enrollments through Internet-supported learning is cited as a key factor in digital learning program success by 59% of respondents in a research study several years ago (Abel, 2005).
- Online learning has been rapidly growing around the world and has thus been a major driver of growth for educational and upskilling institutions. The growth rate has been 15% in the US for the past several years, but the rest of the
world has been catching up. The projected 5 year growth rate is 6% in Western Europe, 17% in Asia, 8% in the Middle East, and 15% in Africa, with the world's most rapidly growing e-learning markets being Malaysia and Vietnam
(Cournoyer, 2014).
- In a survey recently conducted by Accenture of its Skills to Succeed partner organizations, the reported average projected growth rate was 12% from 2015 to 2017.

Quantifiable

From a benchmarking perspective, in a survey recently conducted by Accenture of its Skills to Succeed partner organizations, 76% of beneficiaries secured a job within 9 months of program completion.

Quantifiable
Enhancing
Quantifiable
Enhancing
Enhancing

Digital learning is capable of overcoming the constraints of both training time and place, giving learners access to the materials and support they need anytime, anyplace.

Number of alumni accessing the services

Frequency of access
Amount of time they spend using the services

Quantifiable
Quantifiable
Quantifiable

The ability to offer continued support to alumni (in terms of ongoing training and career-related aid) at minimal cost is a key advantage of digital learning

# of staff, time, and effort required to track program performance

Quantifiable

The automated nature of data collection in digital learning often reduces the cost and effort required to track program performance while increasing the quality of the data (real-time information with minimal human error)

Learner assessment quality

Enhancing

Digital learning improves the ability and speed of testing learner skill levels through elements like adaptive and gamified learning.

Learner progress tracking

Enhancing

Tracking of time on task and program participation (e.g. number and frequency of social platform comments) that digital learning enables through LMS gives a more detailed picture of learner progress and engagement.

# of content development partners

Enhancing

Operational Value Drivers

Program tracking

Collaboration with program

partners

Quality and speed of

program tracking

Content development
partner collaboration

% of content developed jointly with partners

Content delivery partner # of content delivery partners
collaboration
% of content delivered jointly with partners

Quantifiable
Enhancing
Quantifiable

Total funding the organization receives

How much revenue the Public - private funding mix
learning program brings Geographic constraints on funding
to the organization
Revenue per beneficiary

Quantifiable
Enhancing
Enhancing

Financial Value Drivers

Program funding

Program costs

Quantifiable

Digital learning allows organizations to access funding across geographical boundaries, growing the pool of potential funders.

The revenue per beneficiary can vary, however, relative to the non-digital learning equivalent depending on the program structure. Generally speaking it is lower for digital learning, but this must be balanced with the size of the
beneficiary base to analyze the net revenue impact.
A recent study found that eLearning typically requires from 40% to 60% less instructor time than the same material delivered in a traditional classroom setting (Evans, 2013).

Instructor salary cost

Quantifiable

Instructor training and development cost

Quantifiable

KIPP LA provides an interesting example of instructor cost reduction through the use of digital learning. In order to deal with severe budget cuts, the program transitioned from a classroom model to a rotational blended learning model.
This allowed them to increase classroom size by 40% (from 20 to 28 students), reducing instructor time allocated per student, while maintaining top-quality students results.

Instructor travel costs (time and expenses)

Quantifiable

Two key reasons behind instances where digital learning is more demanding on instructor time, are (Educause, 2003):
- The lack of instructor understanding that digital learning requires a shift in pedagogy and program structure (and a lack of training and support to help them achieve this)
- A lack of social platform as part of the digital learning program. Adding this social interaction too helps to reduce repetition of learner questions and enables learners to help each other in many cases, reducing instructor time needed to
do so.

Instructor-to student ratio

Quantifiable

Instructor costs per

beneficiary

- Since very few physical learning materials need to be created there are no printing/binding/distribution costs of these materials. Once the content is ready, it can be distributed to a nearly unlimited number of learners at no additional
cost (Epic Learning Group, 2012).
- There is also a multitude of open-source resources online that can be leveraged when developing digital content, leading to less rework from a content creation perspective and thus saving development time and costs.
- However, if content is developed from scratch it can actually sometimes be more expensive to build than traditional content due to the technology that must be put in place to support it. Below is one estimate of the comparative
average times and costs of developing both an in-person training course hour as well as the digital equivalents (Chapman, 2010).
Content costs

Cost of new course material creation and maintenance (time and

expenses)

Quantifiable

Capital costs

Building/facility cost (purchase or lease)

Equipment cost (purchase or lease)

Quantifiable
Quantifiable

In-Person Learning:
43 hours; $6K
Basic Digital Learning:
79 hours; $10K
Intermediate Digital Learning:
184 hours; $19K
Advanced Digital Learning:
490 hours; $50K
While building and facility costs are generally lower for digital learning programs, equipment costs can be higher due to the technology infrastructure requirements.

Program support system

Cost of purchasing and maintaining the program support IT
Quantifiable
Costs can vary tremendously depending on the IT platforms level of complexity and flexibility. It is important to consider the program objectives and needs against the various available options in detail before making the selection.
costs
NOTE: A major advantage of digital learning programs is their ability to deliver high-quality learning content to a large number of learners at a fraction of non-digital program costs. This has been the key driver of the corporate sector increasingly transitioning to the digital medium for their workforce development programs, with over 42% of Fortune 500 companies having already done so (Cournoyer, 2014). A recent study showed that by
switching to digital learning corporations saved 50%-70% of their training costs (Gutierrez, 2012).
-Dow Chemical reduced their average training cost per learner (per course) from $95 to $11 by transitioning to online delivery, which amounted to an 88% cost saving (Kineo, 2014).
-IBM reported that it was able to deliver five times more training to its employees at one-third the cost by switching to online learning, leading to an estimated cost saving of $200 million (Evans, 2013).
-Ernst & Young reduced training costs by 35% by switching to a blended model, achieving the same learner results while reducing their time spent on training by 52%. The organization was able to condense 2,900 hours of classroom training into 700 hours of web-based learning, 200 hours of distance learning and 500 hours of classroom instruction (Kineo, 2014).
These cost benefits are not restricted to corporate players they can be equally powerful for governmental and not-for-profit organizations. A recent eLearning Guild member survey of 32K cross-sector organizations reported the following breakdown of ongoing digital learning costs per learner:
- 22% of members reported a cost of <$10
- 31% of members reported a cost of $10 - $49
- 11% of members reported a cost of $50 - $99
- 19% of members reported a cost of $100 - $150
- 17% of members reported a cost of >$150
While the majority of these member organizations are in the US, there is some representation from Canada, Europe, India, the UK, Asia/Pacific, Australia, Middle East, South & Central America, and Africa.
As an additional data point, a recent survey conducted by Accenture of its Skills to Succeed partner organizations showed that 70% of organizations had a cost less than $300 per beneficiary.

Process Step

Details
The incremental operating impact that the digital learning program will have on the organization is the difference in operating impact that the organization
will experience with digital learning (to-be state) as compared to the operating impact that the organization will see without digital learning (as-is state).

1. Estimate Digital Learning Operating Impact

This requires the modeling of what both the as-is and to-be states will look like in the future - the differences between the two states are generally driven
by Digital Learning Value Drivers (see "driver definitions" tab for details).
a) As-Is State (without digital learning)

Develop a Process Map for the Organization

As you prepare to build the business case, you must identify at a high level which areas and processes of the organization will be affected by digital
learning to define which of them need to be modelled in the business case. To do so, you must examine your organization and stakeholders to see
which ones are most relevant to the digital learning operational impact analysis. Building a process map for the organization may be useful to gain a
deeper understanding of this (it generally includes major process areas, personnel supporting each area and an overview of what is done at each
process step). This helps define which organizational areas will be modelled in the business case.
Identify relevant value drivers, noting how and to what degree the project will affect them
Value drivers are areas of an organization that are key contributors to the organization's performance and impact. The "Driver Definition" tab
includes some of the key value drivers that are often most relevant to organizations introducing digital learning. Not all of them will be relevant to
your organization and some that are relevant to your context may be missing from the list. It is critical that you select the value drivers most
relevant to you from the existing list and add any additional ones that may be needed - reviewing the process map you created in the previous step
will help you do so.
Outline data requirements and assumptions
Those value drivers that are quantifiable should form the core of your business case. For each of these drivers, metrics need to be identified that will
allow you to measure the level of each value driver. Specific data requirements should then be defined for each of these metrics.
Collect data and document sources
Collecting reliable data from credible sources can be challenging, but doing so it crucial to a robust business case. Some possible sources of data
include:
- Company reports / internal resources
- Market / analyst reports, especially for economic trends factored into the model
- Benchmark studies of other organizations
Always be sure to document the selected data sources in detail. Questions inevitably arise. With a ready source list, you can answer them quickly.
Build As-Is Model in Excel (Current + Forecast) for specific time horizon
Columns B through F in the GREEN tab of this document called "Business Case Template Core" provide a possible starting point for building your asis state business case model . This will show what the organization's operating impact would look like in the future without digital learning (status
quo mode) year over year.
A very straight-forward model would simply assume that today's operating impact would be replicated in the future. However, realistically operating
impact would change even without the introduction of digital learning due to (e.g. the program may grow, trends could change, etc.) Assumptions
around this must be made (and documented) to get to a realistic picture of what the future would look like for the organization under the current
mode of operating (without digital learning).

b) To-Be State (with digital learning)

Review goals of the digital learning project and proposed new capabilities
Re-affirm that the areas of the organization & value drivers identified in the previous (As-Is state) step will in fact be the ones affected by the digital
learning project
Determine the timing that these value drivers will most likely be impacted due to the digital learning program
This is a very important step. If the project promises a 25% reduction in instructor salary expense, for example, should you assume 5% per year over
5 years or 0 in years 1-3 and then 12.5% for years 4-5? Timing assumptions are made based on your knowledge of the project and the organizational
context/plans as well as the judgment of you and your team.
Build To-Be model in Excel by using the As-Is model as a starting point and incorporating the changes defined in the steps above
Columns J through L in the GREEN tab of this document called "Business Case Template Core" provide a possible starting point for building your to-be
state business case model . This will show what the organization's operating impact would look like in the future with digital learning year over year.

c) Comparison of As-Is State (without digital learning )& To-Be

State (with digital learning)

For every year (or time period) included in the analysis, subtract the total As-Is operating impact from the total To-Be operating impact.
This should give you one final number representing the incremental operating impact per year (or time period).
Columns N through P in the GREEN tab of this document called "Business Case Template Core" provide a possible starting point for modelling this.
Review the results and conduct high level "reasonableness" checks to ensure that all Excel calculations were done correctly.

2. Estimate Digital Learning Investment Outflows

Identify all categories of investment required by the project

Investment cash flows are expenses incurred (one-time or recurring) in order to complete the project. If the project is not undertaken, none of the
investment cash flows will be required. Categories of investment include:
Hardware
Software
Labor (e.g. opportunity cost of pulling personnel away from regular jobs to implement the digital learning project)
Consulting and other third party services
Marketing/communications/training required for program roll-out and implementation
Fixed assets (e.g. property, plant, and equipment)
Sometimes a gray area between operating and investment impact can exist. For example, if the project includes new hardware and software (both
typically considered investment cash flows), how should you classify ongoing maintenance and repair expenses related to the new hardware and
software? If you anticipate such expenses might only recur for the useful life of the project (e.g. the time horizon of your business case), you and
your team might agree to classify them as investment cash flows. If you reasonably anticipate that such expenses will continue indefinitely into the
future, you might need to classify them as operating cash flows. You should work closely with your client and team to determine the appropriate
choice in each situation.
Estimate the cost and timing of each investment
People who have worked on other, similar projects can be a good source of information. Other potential data sources are:
- Company reports/internal resources
- Benchmark studies (can provide information for what other organizations invested in similar digital learning projects)
- Vendor reports (can provide high level estimates of costs associated with new hardware, software, and other types of investments)
- Analysis from similar digital learning projects undertaken by the organization in the past (if you cannot find similar projects, work closely with
experts or use your judgment based on your understanding of the project and situation)
Build the Investment model in Excel
Rows 61 through 71 in the GREEN tab of this document called "Business Case Template Core" provide a possible starting point for building your
model . This will show what the organization's up-front investment in the digital learning program will need to be.

3. Calculate the Net Impact of the Digital Learning Project

The net impact of the digital learning project is calculated as the difference between the operating & investment impact of the program without digital
learning (As-Is State) and with digital learning (To-Be State).
This figure is generally expressed as Return on Investment (ROI).
ROI = (Net Operating Impact - Investment)/Investment
ROI represents the number of times a project returns its initial investment over its lifetime. An ROI of 5.5 means that over its life a project returns the
investment plus 5.5 times the investment.
Generally it takes more than one year to break even and start reaping the benefits of investment in digital learning, so ROI is generally measured over a 35 year period
Basing the ROI of the full-scale digital learning program on the results of a pilot (when possible) is optimal in order to increase confidence in the projections
"Enhancing" impacts include items that may be too difficult or controversial to quantify, yet are important to a full view of the rationale for/against a digital
learning project. They may be linked to the organizations strategic objectives or represent the desired outcomes of the project. Some examples are:

4. Examine the impact of "enhancing" value drivers

Please refer to the "enhancing value drivers" in the "Driver Definition" tab for more detail on some of the common ones used in digital learning program
business cases.
While the business case should not rest on these "enhancing" impacts, a description of the key ones is often included in the business case as a way to set
context for the financial analysis and complement it.
Identify non-financial impacts that should be included in the business case
Decide with the team how to position these impacts within the business case (e.g. how important each of these drivers is to the
organization's strategy)
The GREEN "Enhancing Value Driver Analysis" tab of this document can serve as a starting point for this.

BUSINESS CASE SUMMARY:

Cummulative Return on Investment
Mission-Related ROI
Enrollments
Graduates
Improvement in average learner assessment score
# of learners that got a job after the training
# of learners still employed 12 months after training
completion
Learner earnings increase post-training relative to their pretraining earning level
Alumni supported
Alumni support hours delivered
Financial ROI

2014

2015

2016

2017

0.0017
0.0014
0.0000%
0.0012

0.1234
0.1104
0.0005%
0.1051

0.1620
0.1566
0.0005%
0.1465

0.0012

0.1034

0.1434

0.0000%
0.0001
0.0026
34%

0.0015%
0.0098
0.2846
89%

0.0015%
0.0157
0.5014
149%

BUSINESS CASE DETAILS:

As-Is Scenario (No Digital Learning)
Forecast
Forecast
Forecast
2015
2016
2017

Actual

Operating Impact

2014

To-Be Scenario (With Digital Learning)

Forecast
Forecast
Forecast
2015
2016
2017

Mission-Related Value Drivers

(NOTE: Mission value is not cumulative. The units of each metric and value driver vary so they must be analyzed individually and never added)
Program Reach
# of program enrollments
1000
1080
1166
1260
% change in program enrollments
8%
8%
8%
# of program graduates
700
756
816
882
Graduation rate
70%
70%
70%
70%
Learner Outcomes
Average learner assessment score
60%
63%
67%
77%
# of graduates that got a job after the training
600
665
735
811
% of graduates that got a job after the training
86%
88%
90%
92%
# of graduates still employed 12 months after training
550
643
694
794
completion
% of graduates still employed 12 months after training
completion
Graduate earnings increase post-training relative to their pretraining earning level
# of alumni served
% change in # of alumni served
Alumni support hours delivered
% change in # of alumni support hours delivered
Financial Value Drivers
Funding
Total funding the organization receives
Revenue per enrolled beneficiary
Revenue per graduate
Costs
Instructor salary cost
# of instructors
Average instructor salary
% change in average instructor salary
Instructor training and development cost
Average training and development cost per instructor
Instructor travel costs (time and expenses)
Average travel costs per instructor
Cost of new course material creation and maintenance (time
and expenses)
# of courses
Average cost of new course material creation and maintenance
(per course)

2017

2000
100%
1500
75%

2400
20%
1920
80%

2880
20%
2448
85%

920
92%
744
5%

1234
12%
1104
10%

1620
12%
1566
15%

68%
1350
90%

72%
1786
93%

82%
2277
93%

5%
685
2%

5%
1051
3%

5%
1465
1%
1434

1290

1728

2228

647

1034

85%

85%

90%

86%

90%

91%

1%

5%

1%

40%

45%

50%

55%

55%

65%

70%

10%

15%

15%

20
1500
-

21
5%
1575
5%

22
5%
1654
5%

23
5%
1736
5%

80
300%
3000
100%

120
50%
4500
50%

180
50%
6750
50%

59
295%
1425
95%

98
45%
2846
45%

157
45%
5014
45%

1,500,000 $
1,389 $
1,984 $

1,500,000 $
1,286 $
1,837 $

1,500,000
1,191
1,701

$
$
$

1,500,000 $
625 $
781 $

1,500,000
521
613

1,012,378
30
33,746
4%
15,000
500
12,000
400

84,000

1,500,000
1,500
2,143

$
$
$

900,000
30
30,000
15,000
500
12,000
400

60,000

$
$
$
$

2016

79%

$
$
$

As-Is vs. To-Be Scenario Comparison

2015

$
$
$
$
$

10

936,000
30
31,200
4%
15,000
500
12,000
400

$
$
$
$
$
$

973,440
30
32,448
4%
15,000
500
12,000
400

72,000 $
12

$
$
$
$
$
$

78,000 $
13

$
$
$
$
$

14

2,050,000 $
1,025 $
1,367 $
780,000
25
31,200
4%
2,500
100
5,000
200

$
$
$
$
$
$

135,000 $
15

648,960
20
32,448
4%
1,500
75
-

$
$
$
$
$
$

180,000 $
20

607,427
18
33,746
4%
1,350
75
225,000

$
$
$
$
$
$
$
$
$

550,000 $
(364) $
(617) $
(156,000)
-5
0%
(12,500)
(400)
(7,000)
(200)

25

$
$
$
$
$
$

63,000 $
3

$
(661) $
(1,056) $
(324,480)
-10
0%
(13,500)
(425)
(12,000)
(400)

$
$
$
$
$
$

102,000 $
7

6,000

6,000 $

6,000 $

6,000

9,000 $

9,000 $

9,000

3,000 $

3,000 $

150

150 $

150 $

150

25 $

25 $

25

(125) $

(125) $

# of staff hours spent tracking program performance

Average per hour cost of staff tracking program
Building/facility maintenance cost
Equipment maintenance cost
Program support IT system maintenance cost
Total Incremental Financial Value

$
$
$
$
$

50
100,000
5,000
2,000
405,850

$
$
$
$
$

50
100,000
5,000
2,000
269,472

$
$
$
$
$

50
20,000
10,000
4,000
632,198

$
$
$
$
$

3
50
100,000
5,000
2,000
357,850

3
$
$
$
$
$

50
100,000
5,000
2,000
314,410

3
$
$
$
$
$

0.5
50
20,000
10,000
4,000
1,093,475

0.5
$
$
$
$
$

50
20,000
10,000
4,000
635,515

0.5
$
$
$
$
$

-3

-3
$
$
$
$
$

Forecast
2015

Capital Investment
Facilities (purchase or lease)
Equipment (purchase or lease)
# of additional devices needed for the program
Price of each device needed for the program
Digital learning software platform
TOTAL

(80,000)
5,000
2,000
735,625

$
$

50,000
100
$
500
$
500,000
$ 550,000.00

(80,000)
5,000
2,000
321,105

$
$
$

(404,951)
-12
0%
(13,650)
(425)
(12,000)
(400)
141,000

10,000
20
500
10,000.00

3,000
(125)
-3

$
$
$
$
$

Forecast
2016
$
$

(670)
(1,088)

11

Cost of tracking program performance (# of staff & time)

Source

(80,000)
5,000
2,000
362,726
Forecast
2017

$
$
$
$
$

10,000
20
500
10,000.00

Source

Importance of Value Driver to

Organization's Strategic
Mission

Ability of Digital Learning

Program to Deliver Against
This Value Driver

(5 = high, 1 = low)
5
5

(5 = high, 1 = low)
5
5

Enhancing Value Driver

Importance
25
25

Customization of content to learner context, needs, learning style, and

skill level
Practical learning application opportunities
Consistency of content delivery across delivery modes
Learner assessment quality
Total funding the organization receives
# of content development partners
% of content developed jointly with partners
Content relevance & update frequency
Program drop-out rates

5
5
5
4
5
4
4
3
5

4
4
4
5
4
4
4
5
3

20
20
20
20
20
16
16
15
15

Course re-enrollment rates (students who enroll in other courses upon

completing a course)
Learner progress tracking
Immediacy of feedback
Flexibility of learner support
# of content delivery partners
% of content delivered jointly with partners
Average improvement in learners IT skill assessment scores
Improvement in learner's self-directed learning abilities
Average amount of time spent engaging with the program
Public - private funding mix
Geographic constraints on funding

5
3
4
3
4
4
3
3
2
2
1

3
5
3
4
3
3
3
3
2
2
2

15
15
12
12
12
12
9
9
4
4
2

Enhancing Value Driver Project Impact

Diversity of beneficiaries reached
Flexibility of access to training