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8/14/2019 ROI Methodology - White Paper by Talentuum
1/14
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
8/14/2019 ROI Methodology - White Paper by Talentuum
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HowtoshowthevalueofyourHRprojects? Page2
TheROIMethodology,asimpleandprovenwaytodoit.
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.
8/14/2019 ROI Methodology - White Paper by Talentuum
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TheROIMethodology,asimpleandprovenwaytodoit.
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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TheROIMethodology,asimpleandprovenwaytodoit.
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
(atleast70%oftheparticipants)
90%obtainedbetween1to10referrals
Improvetheobjectionhandlingapproach
usedby
participants
(atleast40%oftheparticipants)
48%usedthenewmethodmultipletimes
aweek
Getagoodlevelofconfidenceinthe
methodstaught
(atleast90%oftheparticipants)
48% Alotofconfidence
50% Someconfidence
Getverygoodsupportfrommanagers,
havingthemtakereinforcementinitiatives
meetings,coaching,referralblitzes,etc.
(atleast
80%
of
the
participants)
34% Stronglyagreed
64% Agreed
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TheROIMethodology,asimpleandprovenwaytodoit.
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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TheROIMethodology,asimpleandprovenwaytodoit.
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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TheROIMethodology,asimpleandprovenwaytodoit.
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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TheROIMethodology,asimpleandprovenwaytodoit.
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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HowtoshowthevalueofyourHRprojects? Page9
TheROIMethodology,asimpleandprovenwaytodoit.
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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TheROIMethodology,asimpleandprovenwaytodoit.
1. Alignprogramstobusinessneeds2. Showcontributionsofselectedprograms3. Buildstaffmorale4. Justify/defendbudgets5. Improvesupportforprograms(startingwithseniormanagement)6. Enhancedesignandimplementationprocesses7. Identifyinefficientprogramsthatneedtoberedesignedoreliminated8. Identifysuccessfulprogramsthatcanbeimplementedinotherareas
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TheROIMethodology,asimpleandprovenwaytodoit.
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
8/14/2019 ROI Methodology - White Paper by Talentuum
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