The world of Serious Games and Simulations professionals has been investigating the real cost of “human in the loop” simulations, and it’s been an interesting discussion. The benefits of immersive sims have also been measured for several years now, and I think you’ll find that the statistics entirely validate our early sense that the more realistic the learning, the greater the performance improvement.
Clark Aldrich found that such sims for corporate purposes cost in the neighborhood of $100,000/finished hour to build. This makes rapid development methodology more important than ever if we want to reduce that cost! We’re hoping that our new mLearning rapid development methodology will make learning solution deployment to mobile devices very affordable.
But to consider the cost/benefits equation for immersive simulations in general…
The Value Propositions
Credit card ads to the contrary, nothing in the corporate world is really “priceless.” The right value proposition for realistic simulations and games balances the cost of development (usually high) with the cost of deployment (usually very efficient) and the value of the learning outcome (very effective). Here are some of the elements of the “benefits” side of that equation, based on broad industry experience and some of Aldrich’s findings:
- Reduced learner time to mastery - Sims cover twice as much “content per hour” as traditional eLearning, so a one-hour sim can accomplish what a conventional two-hour program covered. As an element of estimating the cost of a project, this represents a considerable ROI savings in terms of employees’ time-on-job versus time-in-training. The Training Oasis cites Gartner Group’s report that studies have shown that simulation can make a student proficient at a skill four to six months faster than those who took a training class but had no application of the knowledge. This accelerated learning is a key benefit of simulations delivered to any type of audience-executive, manager, instructor or agent.
- Dramatic increase in effectiveness - Sims actually transform real-world behavior and conviction, as measured six months after programs have been deployed, whereas some traditional programs often merely allow an organization to check off a box.
- Infinite scalability over space and time - No human coaches are present to limit use or to force students into awkward and hard to schedule synchronous virtual classes. Sims can typically be deployed world-wide because their interactivity and visual nature make the content natively global. Developers also create a look and feel that will not be dated in a year or two, and can be readily updated, which has always been a problem with video.
- Modularity - Sims can be built one hour at a time, and then linked together. This creates a manageable first sim, with room to grow into more ambitious curricula. Modules can be developed and deployed for just-in-time skill development as a new process is rolled out; the simulation training can mature with the business process.
- Customization - Sims can be highly customized to an organization’s unique requirements, from customized content within an engine to full customization of environment and tone.
- Innate measurement and tracking - Sims requires learners to demonstrate a working, dynamic ability to apply new concepts skills, a feature of great value for both legal and business operations considerations the require certification of capabilities.
- High user acceptance - Employees (across all generations, not only digital natives) rate sims highly for being engaging and for empowering their self-direction in the learning experience.
Hard ROI Data
- ROI studies concluded that training costs dramatically dropped from $763 per employee to a mere $300, while average test results increased from 62% to 92%.
- Immersive simulations had these results: Phase 1 training time was reduced by 50%; Simulation-Based Training reduced onsite training time by 50%; Learning performance increased by 30%; and Overall reduction of training costs by a minimum of 50%.
- One company’s experience in switching from instructor-led training to immersive simulation for one course saw the measured training cost per employee drop from $763 for this course alone to $300 per head, a $463 cost saving per employee. A more detailed analysis of the time and costs benefits showed that the combined direct and indirect savings totaled nearly $10 million over 10 years.
Presenting Your ROI Proposal Effectively
It’s not just what you say but how you say it, especially to C-level executives who make the budget decisions, so consider these helpful hints for that pitch meeting.
- Decrease operating expenses: We’ve been delivering XYZ training using instructor-led classes to teach about 230 people per year. By moving the classes to simulations in e-learning delivery, we should be able to reach more than 1,200 employees without increasing delivery costs while decreasing travel-related expenses. We’ll get more training for each training development dollar spent.
- Increase revenue: Using modest projections and looking at case studies for other sales situations, we feel that e-learning simulations will result in closing $______ in additional sales next quarter.
- Improve employee performance: Our employees’ knowledge is what keeps us ahead of our competition. In this fast-paced business, e-learning simulations will help us ensure that our employees have the right knowledge at the right time, and have experience in applying it effectively through very realistic practice with feedback in the simulations.
- Less time off-task spend in training: With the proposed initiative, we can train our employees anywhere from 50-60% faster.
“In games, learning is the drug.” (Raph Koster, A Theory of Fun for Game Design.) In business, where change is constant, employers need employees who are addicted to learning.
What do you think? How do these stats compare with your experience? How do you plan to use the data and presentation suggestions to pitch your next learning solutions projects? Please share your comments.