ROI Methodology - White Paper by Talentuum

8/14/2019 ROI Methodology - White Paper by Talentuum

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HowtoshowthevalueofyourHRprojects? Page1

TheROIMethodology,asimpleandprovenwaytodoit.

HellofellowHRprofessional,

Didyou

know

that

Canadian

organizations

invest

over

$13

billion

inlearninganddevelopmentactivitieseveryyear?*.Thatsalotof

money!Buthowarethese investmentsjustified?Howtochoose

one program over another?How to knowwhich ones are truly

profitableforyourorganization?Youhaveheardthosequestions

before,Iassume.IknowIhave.

Surveys answered by participantsjust dont cut it anymore. The importance of

demonstratingthevalueofHRinitiativeshasneverbeensocritical,especiallyinthe

currentcostcuttingenvironment.IthinkthatHRprofessionalsmustnowdevelopa

language and use an approach that allows them to answer the question most

executivesask:

WHATWILLBETHERETURNONMYHRINVESTMENT?

Used by HR professionals and learning & development experts in hundreds of

organizations

around

the

world,

the

ROI

Methodology

is

now

a

proven

process

to

measuretheROIofmostHRprojects.ThisapproachisnewinCanada,aswearethe

firstCanadianfirmtobeCertifiedROIProfessional(CRP).

Butasweallveryknow,wecaninterpretnumbersaswewish.Arigorousprocessis

thereforeessential.Otherwise,theresultsofsuchastudyareasuselessastheinput

itself. The following case study should give you a pretty good idea of this

methodology.Ihopeyouenjoyitandlearnsomethingintheprocess.

Allmybest!

ClaudeMacDonald

PresidentandCEO

TALENTUUMInc. *Source:ASTD


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DescriptionoftheHRProject

ABCCommunications isawirelesscommunicationsproviderthatsells itssolutions

to organizations of all sizes. In business for 15 years, the company employs

142people.Thebusinessdevelopmentteam (58professionals) isdivided intotwo

groups: SMB and Enterprise. Each team is given yearly objectives and team

membersarerecognisedonindividualandgroupresults.

InMarchof2009,atwodaybusinessdevelopmentprogramwasdeliveredforthe

entiresalesforce.Giventhescopeoftheprojectand itsdirect impactonstrategic

goals,aROIstudywasconducted.

This training initiative addressed key elements in the consultative business

developmentprocessnamely:

Theimportanceofattitudeandpersonalaccountability Relationshipsellingthe#1sellingmethod Recognizingandadaptingtodifferentstyles Prospectingleveragingexistingcustomersandhowtogeneratereferrals The1stmeetinghowtosetthestageandcontroltheintroductorymeeting Designingandpresentingsolutions Anticipating,handlingandcontrollingobjections Thetop10closingmethods

The twoday programs were delivered to class sizes of approximately 810

participants. Each seminarwas conducted to ensure a dynamic and high energy

facilitationstyle,withmaximuminteractionwithparticipants.Realworldchallenges

specific tosellingABCproductsandserviceswerebrought forwardanddealtwith

usingthecollaborativeinputofteammates,aswellasthecollectiveexperienceand

wisdomofthegroup.


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ABCCommunicationswouldbe satisfiedand renew its trainingprogram if

the ROIwas over 25%. So Talentuum conducted the following ROI study

comprisedofthesefourkeysteps:

Step1Planning

Whateverisnotmeasuredisverydifficulttoimprove.Thereforebusinessalignment

isoneof thecornerstonesof theROImethodology.This initialstepallowedus to

identify the various objectives indicated in the lefthand columnof the following

tables.

Step2

Data

Collection

a. LEVEL1 ReactionDataTable1

Objectives(80%) Results

Subjectinformation 95.8%

Courseobjectivesclearlydefined 96.4%

Objectivesmet 96.7%

Rateofpresentation 96.6%


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b. LEVEL2 LearningDataTable2

Objectives Results

Referraltechnique Averageof8.2/10basedonevaluationgrid

Objectionhandlingtechnique Averageof7.6/10basedonevaluationgrid

Closingtechniques Averageof8.6/10basedonevaluationgrid

c. LEVEL3 ApplicationDataTable

3

Objectives Results

Increasetheuseofthebehaviourstyle

approachtoadapttothecustomer

(atleast50%oftheparticipants)

61% Multipletimesaweek

36% Afewtimesamonth

Increasethenumberofreferralsobtained


90%obtainedbetween1to10referrals

Improvetheobjectionhandlingapproach

usedby

participants


48%usedthenewmethodmultipletimes

aweek

Getagoodlevelofconfidenceinthe

methodstaught


48% Alotofconfidence

50% Someconfidence

Getverygoodsupportfrommanagers,

havingthemtakereinforcementinitiatives

meetings,coaching,referralblitzes,etc.

(atleast

80%

of

the

participants)

34% Stronglyagreed

64% Agreed


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d. LEVEL4 BusinessImpactTable4

Objectives Results

Identifyelementsofthetrainingthathave

hadthegreatestimpactonparticipants

performanceinthepasttwomonths

21% Thefrequentuseofbenefits

statement

21% Theadaptationtothecustomer's

behaviourstyleinthesellingprocess

21% Theuseoftheobjectivehandling

method

15% Theuseofthereferencerequest

techniquemadetocustomers

Getapositiveimpactonparticipants

performance(80%)

35% Verypositive

64% Positive

Increasesalesresultingfromreferrals

(atleast50%oftheparticipantssoldusing

referrals)

60% 1to3sales

20% 4to7

5% 7to9

15% Morethan10

Increasesalesusingmethodsthat

participantshavebeentrainedon(atleast

25%ofparticipantsobtainedupto7sales

more)

38% 1to3sales

20% 4to7

7% 7to9

35%More

than

10


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Step3Analysis

a. IsolatingtheEffectsoftheProgramIn thesurvey,peoplewereasked toestimate the impact theprogramhadon

theirsalesresults.Asecondquestionwasaskedonthelevelofconfidencethey

had in thatestimate.The average contributionof theprogram,basedon the

56questionnairescompiledwas33.6%.

b. IsolatingtheEffectsoftheProgramTheintangiblebenefitsfromthisprogramweresignificant:

Employeesmotivationandsatisfaction Levelofengagementofthesalesforce Adoptionofnewpresentationtemplates Salesprocessimprovements Closerpartnershipbetweensalesmanagerandsalesrepresentatives.


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Step4Reporting

a. TotalProgramCostsTable5

DeliveryCosts SMB Enterprise

Salariesandemployeebenefits5832$ 18792$

Programmaterialsandsupplies 378$ 406$

Facilitatorcosts 8640$ 9280$

Facilitiesrental 779 $ 2538 $

TotalDeliveryCost 15629 $ 31016 $

EvaluationCosts(ProratedbetweenSMBand

Enterprise) 814$ 874$

TotalProgramCost 16443$ 31890$

b. RevenuesGeneratedbyProgramAccording

to

participants,

these

techniques

generated

sales

of

about

290

units

or$243,600.

Table6

Sales vs Training Program - actual results

Units sold 1 4 7 10

Occurrences 21 11 5 19

Total units sold 21 44 35 190 290

1 YR Revenues 17 640 $ 36 960 $ 29 400 $ 159 600 $ 243 600 $


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In order to reflect the contribution of the program on sales results, the

forecastedrevenueswereadjustedbymultiplyingthetotalforecastedrevenue

by 33.6% (average contribution of the program based on participants

evaluation).

Table7

Revenues SMB Enterprise

Sales vs Training Program 117,450 $ 126,150 $

Contribution of program 33.57% 33.57%

Forecasted revenues 39,428 $ 42,349 $

c. CalculatingtheROIsROICalculationSMB

ROI=$39,428 $16,443 =140%

$16,443

ROICalculationEnterprise

ROI=$42,349 $31,890 = 33%

$31,890

Conclusion:BothROIswerewellabovethe25%initialobjective.


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Inthisstudy,credibilityofthedatawasbasedonsixkeyelements:

1.Thequantityofquestionnairesreceivedandcompleted(56over58participants)

wassufficienttogetrepresentativeandcredibleresultsforthisROIstudy.

2.

The

information

for

the

analysis

was

provided

directly

from

the

participants.

The

salesrepresentativeshadnoreasontobebiased.

3.Theprinciplenodata,no improvementwasultraconservative inthedata

collection.

5.Thedatawasadjustedtoaccountforthepotentialerroroftheestimate.

6.Alldirectandindirectcostswereconsideredinthetrainingcosts.


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1. Alignprogramstobusinessneeds2. Showcontributionsofselectedprograms3. Buildstaffmorale4. Justify/defendbudgets5. Improvesupportforprograms(startingwithseniormanagement)6. Enhancedesignandimplementationprocesses7. Identifyinefficientprogramsthatneedtoberedesignedoreliminated8. Identifysuccessfulprogramsthatcanbeimplementedinotherareas


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Measuring the trueROIofanyproject isdelicate.EvenmoresowithHRprojects.

Themostcommonpitfallsare:

1. NotgettingyourCEOsbuyinontheprincipleofmeasuringthevalueofprojects.2. NothavingtheCFOinvolvedintheROIplanningprocess.3. Nothavinga fewROIChampionswithin theorganizationbefore you initiateastudy.

4. Skippingthebusinessalignmentphaseinordertosavetime.5. Nothavinganybaselinedatatocomparewith.6. Poor planning of themethods thatwill be used to isolate the effects of thesolution.

7. Notcapturingthedataattheappropriatetime.8. TryingtoconductROIstudiesoneveryproject.

Only10to15%ofprojectsshouldbeconsideredforlevel5study.


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A FEW WoRDS ABOUT TALENTUUM

Talentuums mission is to transform human performance intomeasurable business results. Talentuum offers solutions to:

f ALIGN people and projects on measurable objectives

f DEVELOP strong teams, sales managers & sales peoplef MEASURE and show the value of projects

Talentuum is the ROI Institutes Canadian partner. Our certified ROI professionalscan make you benefit from the methodology in three ways:

TALENTUUM is the only Canadian firm to have received the CRP(Certified ROI Professional) recognition from the ROI Institute.

A u t h o r s I n f o r m at i o n

Would You Like To Know MorE?

f Visit our Web Site at: www.talentuum.com

f Continue the conversation at: http://methodologieroi.wordpress.com/

f Or better yet, pick up the phone and lets discuss the value of this approach for one of your projects.

TALENTUUM INC. 475 Dumont Boulevard, Suite 200, Dorval, Quebec, Canada H9S 5W2 Tel: (514) 697-2542

Licence: Creative Commons Attribution Noncommercial Right to copy, distribute and transmit the work, while attributing the work to the author.

Mr. Claude MacDonald is President and founder

of Talentuum. Over the last 20 years, he has

trained over 15,000 managers, professionals and

employees from various prominent organizations

in Canada. He has held management positions in

both training and business development.Email: [email protected]

LinkedIn Profile: http://ca.linkedin.com/in/claudemacdonald

Louis Larochelle is a senior associate and the

ROI practice leader of Talentuum. Over the

last 20 years, Mr. Larochelle has held key business

development positions. He offers high level

expertise on the improvement of business

processes and the ROI assessment of any project.Email: [email protected] Profile: http://ca.linkedin.com/in/louislarochelle

ROI ClinicsROI workshops help youfamiliarize yourself with this

methodology and allowyou to assess how this approach

can be implemented.

ROI StudiesOur certified practitionersare able to produce reliableand credible ROI studies to

demonstrate the value of themajority of your projects.

ROI CertificationYour organization may certifyits own ROI practitioners andthus develop a culture basedon results and accountability.

e e e


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ROI Methodology - White Paper by Talentuum

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