Bridging Impact and Standards: Connecting the ROI Methodology and ISO/TS 30347:2023

The ROI Methodology is the internationally recognized evaluation framework for measuring impact and return on investment, as highlighted by ISO/TS 30347:2023, which sets global benchmarks for learning and development metrics.

โ€œWhatโ€™s it worth?โ€ Whereโ€™s the data?โ€ Whoโ€™s accountable for this?โ€ Training professionals are often challenged when answering these pressing questions about their investments. In todayโ€™s data-driven environment, it is more important than ever for organizations to measure and report the impact and ROI of their training programs, projects, and initiatives. The ROI Methodologyยฎ process is a proven and systematic approach for evaluating any program or project to impact and ROI. This process collects data along five levels: reaction, learning, application, impact, and ROI. These levels create a chain of value that exists for any initiative.

The new standard, ISO 30347:2023, offers guidance on a systematic process model for learning and development (L&D), helping managers and others ensure that L&D efforts are conducted efficiently and effectively to achieve the desired outcomes.

This article explores how implementing both the ISO standard and the ROI Methodology can help companies efficiently demonstrate the tangible and intangible benefits of their initiatives, enhance their investments, and streamline their reporting.

About ISO/TS 30347:2023

The publication of ISO/TS 30347:2023 marked a significant advancement in the field of L&D metrics. This technical specification provides organizations with standardized guidelines for measuring learning outcomes, including the return on investment (ROI) for training and development initiatives. It defines and bridges the reporting gaps between traditional metrics by providing a framework and the concepts, metrics, descriptions, and guidance necessary to create a basic measurement and reporting strategy.

For example, one of the standards for reporting outcomes defines impact as the isolated impact of learning on the organizational goal. For example, if a learning program contributed 20% of the 5% increase in sales, then the impact of learning on sales would be 1% higher sales (20% ร— 5% = 1 %).1

About the ROI Methodology

The globally recognized ROI Methodology is a comprehensive evaluation framework that provides organizations with a clear path to demonstrating the value of their programs. It evaluates at five levels:

  1. Reaction โ€“ How participants react to the program.
  2. Learning โ€“ What participants learned from the program.
  3. Application โ€“ How well participants applied what they learned.
  4. Impact โ€“ The program’s impact on business outcomes.
  5. ROI โ€“ The financial return on the investment, expressed as a percentage.

While all five levels are important, standards, called Guiding Principles, support this methodology. Calculating ROI (Level 5) is critical for both process improvement and efficient use of funds as it provides a monetary figure that demonstrates whether the program’s benefits outweigh its costs, delivering powerful insight to decision-makers.

One of the key components that differentiates the ROI Methodology from other evaluation methods is its emphasis on isolating program effects, one of the guiding principles. Isolation is the process of separating the impact of the program from other variables that may have influenced results. Users of this methodology always follow this step because it is essential to ensure the accuracy and integrity of the evaluation.2

ย Why Isolation is Important

In practice, many outside influences may contribute to improvements in performance, such as market conditions, new technology, or even changes in management. Without isolating the effects of a program, organizations risk attributing those improvements to the program when they may have been caused by other factors.

Isolation techniques, such as control groups, trend line analysis, participant estimates, and others, help remove these influences, providing a clearer picture of how much impact the program itself generated. 3 By doing so, organizations gain confidence in the accuracy of their ROI calculation, knowing that the results they’re seeing are directly attributable to their L&D efforts.

ISO/TS 30347:2023 Reinforces the Importance of Isolation

ISO/TS 30347:2023 acknowledges the importance of isolating variables when measuring a program’s effectiveness. It emphasizes that simply measuring outcomes without considering other factors can lead to misleading conclusions, making the isolation process a critical component of any serious evaluation effort.

Incorporating the ROI Methodology into the ISO standard demonstrates its global relevance and application. By adhering to this international standard, organizations can confidently assess the true value of their investments in people, programs, and projectsโ€”ensuring that investments are driving measurable results and contributing to the bottom line.

By following both the ISO standard guidelines, the 12 steps in the ROI Methodology, and the Guiding Principles, organizations can ensure they are accurately, efficiently, and credibly evaluating and reporting the impact of their initiatives. This alignment between the ISO standard and the ROI Methodology gives program owners a clear path to demonstrating the true value of their investments. To learn more about how to use the ROI Methodology to measure the impact and ROI of your programs, contact ROI Institute.

References:

1International Organization for Standardization. (2023). ISO/TS 30347:2023 Learning and development metrics. Geneva: ISO.

2International Organization for Standardization. (2023). ISO/TS 30347:2023 Learning and development metrics. Geneva: ISO.

3Phillips, J. and Phillips, P. The Handbook of Training Evaluation and Measurement Methods, 4th ed. New York: Routledge, 2016.

Authorsย 

Patti P. Phillips, Ph.D., CEO, ROI Institute, Inc., and Jack J. Phillips, Ph.D., Chairman, ROI Institute, Inc.