Why don’t e-learning vendors ask to get paid by assessing whether it has had a positive business impact? I’m thinking courseware, but KM, LMS installs, etc. should stand up to the same tests.

I thought about this months ago when I read an ft article about the advertising industry (a creative industry role model, but that’s worthy of a seperate post) who, under intense pressure from an ad downturn actually had to develop some creative biz models to justify their existence.

On the same vein, I recently watched a wonderful 30+ minute video from one of the guys at Silver Orange, a web firm, explaining how their business model is to build e-commere sites for free and share the resulting revenue from the sites.

The resulting partnership approach and genuine care applied to projects is revolutionary – if it doesn’t directly impact sales, they won’t build it.

Key benefits of this paid by results approach:

1. shared sense of ownership underpins all project work.
2. if it ain’t going to contribute, there is very little chance it will be done
3. zero ‘end of project’ syndrome – it’s directly in supplier’s best interests to ensure ongoing success of their efforts.

Of course, this approach requires real trust between supplier/client, of course, but if it doesn’t exist in the first place, you’ve got big problems anyway.

It would also create an incredible focus on unearthing tangible business/organisational benefit – no supplier in their right mind would do the work without mapping and importantly, measuring the benefit before undertaking a project – otherwise there’s be no way to correlate payment.

And crappy projects would be a thing of the past – some projects may not get done because above metrics couldn’t be identified – cool, if a project can’t measure any success, why on earth is it being done in the first place?

Clients could sweeten the deal with bonuses for above-expected performance improvements.

Of course, the ad industry has simplistic metrics – increased product sales, but they also measure brand awareness, advert recognition, key demographic activity etc. The e-learning industry with it’s LMS’s, tracking and the ‘business’ with it’s Biz Objects, Crystal Reports etc etc should be able to measure impact with even more granularity and certainty.

The one problem with this model is failure through outside forces – whopping layoffs change attitude of staff, a shitty product undermines sales etc etc – this was dealt with by the ad guys from the ft article, but frustratingly I can’t remember what they said (I’ll look it up later). The commerce website guys simply replied that they chose clients very carefully (based on potential to have positive impact, belief in the client and products etc.)

Is this is a utopian dream? Am I an idealistic nutcase? Can’t clients and suppliers love each other?

Answers on a postcard?