What is the value proposition?
Company management often asks for a business case for applying a company-specific learning environment: what is the need and what are the revenues and costs? Company management often asks for a business case for applying a company-specific learning environment: what is the need and what are the revenues and costs? We are happy to discuss the relevant score cards with you.
Key points to consider
Below we discuss the most important points of a business case.
Effectively organizing business activities – using business processes supported by IT systems – requires efforts and time from management and employees. The efforts are not one-off, but require continuous attention because i.) competitors enter the market with better products and services at lower costs, ii.) organizing business activities more effectively can be done by applying innovations in supporting IT systems iii.) because companies wish to comply with (new) legal and contractual obligations.
In short, management pays permanent attention to building and mobilizing knowledge among management and employees because it is simply necessary for the continuity of business operations.
We can divide the returns into i.) meeting the necessary preconditions for successful business operations and ii.) higher productivity and lower costs compared to the situation in which the existing situation would be maintained (opportunity cost).
A. Necessary preconditions
We consider keeping the knowledge of management and employees up to date to effectively manage business processes as a necessary condition for business operations. Effectively protecting trade secrets for strategically essential processes is another necessary condition for business operations.
We can draw a parallel with taking control measures to protect personal data. There are legal requirements for this data that a company must demonstrably comply with. If there is non-compliance, the supervisory authority (Dutch Data Protection Authority) can impose measures such as fines or a penalty that could have an impact on business continuity.
Bringing management and employees to the right knowledge level makes it possible to respond adequately to competitors by innovating, improving and making cheaper products and services, or responding to competitors. Knowledge development ensures increased turnover or maintenance of turnover.
A special revenue category are the opportunity costs that arise when a company invests in the knowledge development of employees. The production costs of products and services become lower compared to the situation in which the company does not invest in knowledge development.
Indicating and calculating revenues is company-specific. By mentioning the benefits of knowledge management, business cases can be made:
- For all business activities, there is overview and insight into the knowledge level of management and employees in their specific roles;
- The need for awareness and training programs at the level of department, role and employee can be determined in a well-founded manner;
- Role-driven awareness and training programs are developed, applied and managed in a user-friendly and effective manner. The company-specific learning environment offers the logistics to apply the programs in a targeted and successful manner, and the organization of company activities becomes more effective;
- The learning environment provides insight into the efforts and results of employees. This overview provides insight into the effectiveness of control measures aimed at compliance with legal and contractual obligations; and
- Employee knowledge management is individual, effective, clear and manageable.
The licensing costs of a company-specific learning environment for a company depend on the number of users and the programs. Calculating operational costs depends on the following estimates:
- Efforts of the employees; and
- If desired, use of professionals.
The costs for designing, compiling, testing, managing and applying awareness and training programs are difficult to estimate. It depends on the nature and size of the business activities, the target group and the skills of the training coordinator.
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