How to Measure ROI for Robotics Training
Posted on May 29, 2018 7:00 AM. 6 min read time
How do you measure the impact of robotics training? Calculating ROI for training can be tricky. Here's how to do it simply and effectively.
The return on investment (ROI) for collaborative robot technology is a straightforward calculation. Our downloadable ROI calculator makes it especially simple.
However, the return on training investment (ROTI) is not so clear-cut.
Training is about imparting knowledge to your workforce, which is naturally quite difficult to measure.
How much has your workforce actually learned from a series of training sessions? Does the knowledge translate to real changes in their work? How does it affect the bottom line? These can be tricky to quantify, especially if you're just getting started with robotics.
In this article, we'll show you how to measure the ROI of robotics training. With the right tools and knowledge, it's surprisingly straightforward!
Effective training produces a better ROTI.
A general approach to measuring ROTI
There are three steps to measuring the return on training investment (ROTI):
- Pick metrics that suit your business and are affected by robotics training.
- Track these metrics before and during your robotics training program.
- Use the results to estimate the program's ROTI and improve the effectiveness of future trainings.
The challenge with these three steps is that they're quite broad. Each incorporates several tasks. The first step (picking metrics) involves choosing from hundreds of metrics, some of which are more suitable than others.
Let's take a closer look at the process.
Metrics: the key to ROTI measurement
Metrics let you measure the performance of a business in an objective way. Almost anything can be a metric, as long as it can be reliably measured. We showed how to design your own robotic benchmarks using metrics in a recent infographic.
There are hundreds, if not thousands, of different metrics you could choose from to measure the effectiveness of robotics training on your business.
For instance, robotics training will affect manufacturing metrics like cycle time and yield, economic metrics like revenue growth rate and economic value added, and performance metrics like customer satisfaction and growth rate.
Training permeates the culture of a business, so it can have a far-reaching impact – but its financial return is not as clear as with other investments. That's why ROTI can only be accurately calculated by measuring the impact of training on more specific economic metrics.
How to calculate ROTI
There are two ways to calculate ROTI:
- By applying a rule of thumb, like the 30-to-1 rule.
- By tracking the change in economic metrics compared with the cost of training.
The rule of thumb way
One quick way to estimate ROTI is to use the 30-to-1 rule for delegating tasks, as popularized by author Rory Vaden.
Let's take a simple example (this one comes from Module 3 of our learning program). An automation engineer wants to train a line worker to program a robot for a pick-and-place task:
Imagine that the automation engineer has to perform the programming task once a day, and it takes her 10 minutes each time. The 30-to-1 rule says that it will take the automation engineer 30 times longer to train the line worker to perform the same task to the same level of skill. This would mean 5 hours of training. Over one year (250 working days), the automation engineer herself would spend almost 42 hours on the programming task. Therefore, the ROTI of such a training program is 37 hours per year (42 minus 5 hours). These are 37 hours that she could spend developing new robotic applications.
To turn this into an economic ROTI, use the following equations:
Training Cost = Training Time x (Trainer Hourly Salary + Trainee Hourly Salary)
ROTI = ROTI in Hours x (Trainer Hourly Salary - Trainee Hourly Salary) / Training Cost x 100%
For our example, if the automation engineer earns $49 per hour and the line worker earns $19 per hour, the ROTI would be:
Training Cost = 5 hours x ($49 per hour + $19 per hour) = $340
ROTI = 37 hours x ($49 per hour - $19 per hour) / $340 = 326%
As a ROTI calculation, this use of the 30-to-1 rule is extremely rough.
For example, it doesn't take into account the economic benefit of the automation engineer having an extra 37 hours to develop new applications. It's also not applicable to training sessions that involve more than simple delegation.
However, it's quick, and you don't need to gather a lot of data to complete it.
The economic metrics way
The more accurate method for measuring ROTI uses the same basic equation:
ROTI = Change in Cost of Activity / Total Cost of Training x 100%
Here's how to evaluate the change in cost of activity:
- Choose economic metrics that will be affected by the robotics training.
- Measure these metrics before your robotics training program begins.
- Continue to measure these metrics throughout the training program and after it ends.
- At any time, calculate the total change in cost of activity by summing the changes in each metric.
To calculate the total cost of training, use the tools provided in Module 3 of our learning program.
The simple process for selecting the right metrics
Here at Robotiq, we want to make it as easy as possible for you to start training your own team of in-house robotics experts.
That's why we've created a series of eBooks to help you out. We've taken key business skills and applied them to robotics.
The result is a clear, straightforward process you can apply to your own business right away.
The eBooks are arranged into 10 modules starting with module 1. Together they guide you through the whole process of developing a robotics team, from assessing your business needs, to implementing your training program, to measuring the effectiveness of the program.
Module 8 is available to download right now. This hands-on worksheet shows you how to apply metrics to measure the effectiveness of your in-house robotics training program.
First, design and launch your training program
If you haven't already, you should definitely check out our in-house robotics expertise modules. They guide you step-by-step through the whole process of implementing a successful robotics training program. They discuss why you need in-house robotics expertise, how to assess the robotics needs of your business, how to get the team on board, and how to build an effective training program.
Next, apply metrics to your training program
Module 8 guides you through the process of picking and implementing metrics. At the end of the module you will have chosen the right metrics for your business, as well as the most suitable ways of measuring them.
There are three steps to this process:
- Select the right metrics—The module provides 100 metrics for you to choose from and identifies 29 of the most relevant metrics for a manufacturing business.
- Select the right measurement methods—You and your team will choose the most suitable measurement methods for these metrics and identify which stakeholders will be involved (Module 4 describes how to identify stakeholders).
- Include the metrics in your regular meetings—As part of the training program, you will hold regular meetings with the key stakeholders in your team. This module provides a framework to assess and discuss your chosen metrics. You can then use these assessments to improve your training program.
Remember the maxim "What gets measured gets done." Even one or two quality metrics can help you quantify the ROI of your robotics training.
What would be a good return on training investment for your business? How do you currently measure ROTI? How are you getting on with the modules? Tell us in the comments below or join the discussion on LinkedIn, Twitter, Facebook or the DoF professional robotics community.