Assessing your learning investment

- We are going to need a lot of technology tools…to make our learning initiative a success.…We have the money, so just go out and buy it.…I hear this from learning practitioners all the time.…They believe that if it's in the budget,…they can just purchase it without any further thought.…But not so fast.…For major purchases, especially learning technologies,…leaders expect you to show how these purchases…will benefit the organization…qualitatively and quantitatively.…

A common approach to do this is conducting a…breakeven analysis, often referred to as…cost-volume-profit.…This is when leaders evaluate at which point…they'll continue to make profits when…adding additional costs.…Let's work through a simple cost benefit example…to provide insight about how decision-makers…evaluate these types of investment decisions.…Mary is the president of BSI, a company that sells…a productivity software.…

BSI sells 4000 units of their software per year…for $200 each.…It costs $120 to make each one.…This gives them a profit of $80 per unit.…