Calculating ROI on EPSS for Learning @ the Point of Work

In a campaign to introduce electronic performance support system (EPSS) technology, an innovative and evolved approach to learning, chances are great that you are going to have “SELL” somebody on the idea. You might be surprised WHO will be the first to dig in their heels. Even more surprising…well maybe not…is the reason for the resistance. If you are thinking along the lines of what innovation has the potential to do to embedded training traditions and paradigms, you are on the money. Yup…we’re talking “CHANGE”, and that implies wearing a “sales hat” and backing up the rhetoric of your “sales pitch” with evidence. Turns out, the evidence I found during my most recent campaign confirms a new learning paradigm is here now and waiting for us to implement.

First – The “Pitch”

I have several previous blogs posts that talk about the rapidly increasing importance of supporting workforce performance in the work context [a.k.a. the new classroom]. While we are referencing what learning occurs, the greater emphasis is on where, when how, and to whom it occurs. My background as a performance consultant may skew my vision of driving sustained human performance evidenced by tangible business outcomes, but it is a perspective that is coming quickly to the forefront. The promise of “performance impact”, at least for me, has a direct relationship to business outcomes. Just looking at where and when from an impact perspective, we should be able to agree that the classroom and/or on-line training courses do not represent that particular ground zero. Manifestation of impact happens in the work context.

Most of us are figuring out how to do more with less. The velocity of business demand is continuous. The demand for flawless execution in our workflows is continuous. The presence of CHANGE is continuous. Are the learning opportunities for our workforce as continuous? Not unless we go to their ground zero and address their moments of learning need (Figure #1) when they surface. Sadly, the moments of need that carry the greatest business risk of creating loss, generating material waste, exposing the business to legal liabilities, all happen in the work context. AND…it happens after training has been accomplished.

Moments of Potential Failure

Figure 1

Many of you have seen this graphic before, so apologies for the déjà vu moment, but I continually refer back to this because it is foundational to the “innovation sales pitch” one must make to evolve the scope and charter of training. Dr. Conrad Gottfredson developed these “moments” a few years ago, and I must confess that they have been the most significant nuggets of personal learning I can recall acquiring in many years. This graphic has also served as my most effective “sales collateral” when describing the approach to a client.

The first two moments of need define our current training paradigm – the 5% or so of the 2080-hour work year where the workforce is engaged in some form of formal learning [training]. This 5% represents the domain where we have demonstrated our collective training excellence. This 5% is also where Josh Bersin’s research [2009] shows that up to 80% of our training resources are directed.

The “pitch” I am suggesting shines the light downstream into the post-training work context  – the other 95% of the work-year where performers are @ the point of work. This is where we [Training] often do not have a presence. It is out of scope and not part of our charter. Perpetuating both of those conditions are dead wrong and counter to making a positive contribution to sustained capability to the business.

The last three moments of need are where we see the implications that the application of learning has the greatest potential to impact the business. The assets applied in this downstream environment are most likely not linear. They have no learning objectives. They do not adhere to ADDIE. They do not play well […or at all…] with the LMS. Heck, they may have absolutely nothing to do with training at all. Hmm…nothing to do with training, but everything to do with performance.

Our “evolved” mission requires that Training step up and design, develop, and deliver [make accessible] learning assets that match the moments of need – and to do that, they should be accessible at the moment of need – in a work-context friendly amount – are in a readily consumable format – and accessible to/from the right devices.

Now that is a mouthful, and I have actually seen the verbalization of this description disrupt the comfort zone of members of the training organization. On the flip-side, I have coincidentally witnessed the stakeholders on the operational side of the business resonate with enthusiasm. They know firsthand what is at risk in the work context, because that is where they live every day…and once a year…get evaluated on their performance. Notice I mentioned “performance” not “knowledge attainment” of their workforce. Performance success and/or failure can be tagged directly to hard dollars, and the best sources for that insight are the stakeholders who live with the results…or lack of them. Impact those dollars, and you have a partner/advocate for your cause.

Second – The ROI Drill

On more than one campaign I have been faced with coming up with “hard dollar projected savings” for the investment in a piece of new learning technology. One of the most difficult was for the LMS. There was a tie for “easiest” business case to write between Virtual Classroom (VC) technology and a new Electronic Performance Support System (EPSS). Believe it or not, the ROI for EPSS was over 460%, and that was based only on two criteria:

  • Impact to productivity through reduction of workforce time spent in search mode; and,
  • Impact to productivity through reduction of formal training time

The hardest and most time-consuming part of the whole study was the research for relevant data given we had no in-house experience or historical data to reference. I found some data used by the EPSS vendors themselves [always suspected of being a bit self-serving], and also found studies from several research houses including Accenture, Outsell and Butler Group. There were others, but these seemed most relevant to a search effort that fell into the last three moments of need where the worker is in the work context – @ the point of work.

I built a spreadsheet to handle the what-if scenarios across both of these points of impact and played through numerous iterations. If I went with the study result data I acquired from my research, the ROI numbers were ridiculously high, and I knew no bean-counter would approve funds on pie-in-the-sky projections for payback, so I went in the other direction – ridiculously conservative including:

  • Research showed over half the target population would utilize search on a regular basis – so I went with only 25% of 50% of the total population that would ever need to use SEARCH
  • Research averaged across all sources showed an average of 7.92 hours per week spent in SEARCH mode – so I went with 3 hours
  • Our internal numbers showed a loaded wage rate of over $50/hour – so I went with $35/hour
  • Research showed an average of 20% productive time saved in the search process – so I went with 5%

Hourly productivity gained from those conservative assumptions translated to nearly $500K on a workforce of 7,000…which by the way was about half of the total population. EPSS investment was $180K in year 1 [the biggest pop for sure] and showed ROI of 154%. Note that this ROI is ONLY based upon productivity as measured by wages…nothing was included for what additional value/revenue that might be generated by the redeployment of resource time. I also did not include the costs associated with “finding the wrong information” and then acting on it. According to the research studies, that is also a consideration not to overlook.

The second impact [reduced training time] was the one that turned out to be the scariest of all – not to me – but to every red-blooded trainer and instructional designer – hence, the fear of EPSS-initiated change. If classroom or on-line training is reduced, the need for those who design and deliver said training are not nearly as necessary to the mission. I will say this about that – “Bummer!”

Sucks to be a trainer, right? Heck no it does not! What might suck about being a trainer is disruption of the comfort of existing paradigms, not to mention the potential need to evolve with the dynamic learning environment they SHOULD be tasked to support in the larger scope. Implications are that learning new work context-centric skills, like performance consulting, process and workflow analysis, will become a priority. Instructional designers have a change card to deal with as well. ADDIE, and it’s linear focus, still works for the formal training, but what we see happening to formal training is a new look and feel that is comprised of more object-based emphasis on scenario-based learning using the EPSS tool “live” and engaging directly with the technology AND the learning assets that they will be expected to use on the job. Training becomes very role and task-centric with heavy emphasis on role-based scenarios. Oddly, a larger portion of that “formal” learning can even shift away from formal venues and take place @ the point of work – where the learner is within their respective workflow. Managers can walk through “training” in staff meetings – no trainer required. As a result training time goes down and productive time is redeployable to other value-generating activities.

Okay, so that is the rant part of the second piece, now here are the numbers from several vendors, a Taipei University Technology Study, and actual results from four large EPSS users. These numbers focus on the actual reduction of time spent in formal training.

  • All research data showed an average reduction in training time at 68.8% – high-end at 83% – low-end at 50% – so I went with 12.5% – a two-hour reduction on a planned 16-hour curriculum.
  • Again our internal numbers showed a loaded wage rate of over $50/hour – so I went with $35/hour

Similar results – hourly productivity gained from those assumptions translated to $490K on a workforce of 7,000…half of the total population. Again, EPSS investment was $180K in the first year and the numbers showed ROI of 171.7% Note that this ROI is ONLY based upon productivity as measured by wages…nothing was included for what additional value/revenue that might be generated by the redeployment of resource time. Additionally,  I did not factor in any benefit from reduced trainer overhead or redeployment of their time.


In both calculations I threw the individual benefits gained against the total cost of the EPSS investment to see what ROI would look like at each point of impact. When combined, the ROI shot up to 426.4% using my ridiculously low assumptions. Actual data results pumped up ROI to over 1,000%. Okay, so those numbers were used to satisfy the bean-counters. Those numbers also embarrassed some people into grudgingly agreeing to “give EPSS a try”. From where I sat, the integration of EPSS planted a huge seed of change within a learning organization.

Granted this application was focused on on-line business applications, and that tracks with what EPSS could brag as their sweet spot back from the days of Gloria Geary. For me, that is why EPSS has been so slow to catch on; a history of mistaken application identity combined with a training organization fighting to keep their jobs. When you throw in the advent of Web 2.0 technology, suddenly EPSS does not have to be aligned or embedded within an actual application. Any “process” from a two-person workflow to an enterprise-wide on-boarding initiative can be supported by an appropriately configured EPSS.

Does one always need an EPSS? My position is…not always. An EPSS gives you many features that make the investment worthwhile – ridiculous ROI notwithstanding. For smaller companies, getting the right learning into the right hands at the right moment in the right amount in the right format to/from the right devices define the desired outcome for learning assets. A Web services portal based on WordPress can do some of that for free if you can live with decreased functionality.

By now it should be obvious; I am a huge fan of EPSS technology and the concept that is more real than ever because of it – learning @ the point of work. In fact, the evolution of EPSS technology through Web 2.0 has breathed new life into what was previously a limited-use, on-line HELP application. The new generation EPSS platforms have changed the rules of engagement to equip the workforce to perform their work. It no longer matters whether the process is “system-based” or a human experience workflow. Training departments now find themselves slipping behind the knowledge curve in the race to inject performance agility into the workforce and enable increased capacity to sustain human performance outcomes.

Gary Wise
Learning & Performance Solutions Strategist
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Twitter: Gdogwise