Using the ROI Methodology to measure the success of major programs has increased in recent years, driven in part by the chief financial officer. In good economic times, expenditures increase, and leaders work to properly allocate investments. In tough economic times, programs and processes that yield the best results are most likely to survive restructuring efforts.
Several revealing symptoms indicate an organization is ready to implement ROI.
1. Pressure from senior management to measure results. This pressure can be a direct requirement or a subtle expression of concern about program and/or process value.
2. Extremely low investment in measurement, evaluation and analytics.Chief learning officers spend about 1 percent of their budget on measurement and evaluation processes. Investments lower than this amount may indicate there is little, if any, measurement or evaluation taking place. Expenditures in the 3 to 5 percent range represent best practice for serious evaluation.
3. Recent program disasters. Every organization has major programs that were implemented without success. When there are multiple program failures, the program’s owner often bears direct responsibility or blame. These failures may prompt an ROI forecast prior to implementing new programs.
4. A new CLO or leader in the function.A new CLOoften serves as a catalyst to objectively review previous programs’ success rates with fresh eyes.
5. Managers’ desire to build centers of excellence. Some managers strive to build leading-edge functions, and they may build comprehensive analytics processes into the strategy. They set the pace for analytics by emphasizing they are serious about accountability to their functions.
6. Lack of management support.In some cases, the learning function's image suffers to the point that management no longer supports its efforts. A bad image may be caused by a number of factors but a lack of credibleresults isoften a cause.
Here's a quiz to help you determine if you're ready for ROI:
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