Assessing ROI of your financial modelling training – 5 questions to ask

F1F9 FINANCIAL MODELLING EXPERTS

Author:

Andrew Berkley

Published:

17 Mar 2015

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HR professionals and finance professionals don’t always speak the same language, which can lead to puzzled looks.

But “return on investment” is increasingly used by learning and development teams when assessing the role of training courses in their organisations.

Here are five key questions (with follow-ups!) that analysts and L&D teams alike might ask when assessing the ROI of a financial modelling course:

  1. 1. Is financial modelling a threshold competence or a core competence in your organisation?

A threshold competence is one that people need simply to enter a market – it is what everyone else expects that you will do as a minimum.  A core competence is one that provides competitive advantage and upon which an organisation is prepared to take risk.

“All our people are very good at turning up to work on time” is an example of a threshold competence; “all our people are recognised experts in financing complex deals” is an example of a core competence.

So which is financial modelling: threshold or core?

The answer is that it depends.  Standardised modelling that is easy to review should be a threshold competence but too often organisations and individuals have yet to reach even this level.  Modelling that is sector specific (project finance, renewables, corporate reporting or LBO) is much more likely to be a core competence.

Identifying whether training will help you meet a threshold competence or a core competence is a key question to discuss with a learning and development team.

It helps to prioritise competing training requirements, since organisations can determine competence-led requirements versus nice-to-haves.

What is it that I will be able to do after that training that I can’t do now?  And how will that help my organisation be better at what it does?

  1. 2. Why is training the answer?

There is an automatic assumption that training must be a good thing.  But often training is not sufficient on its own to achieve what an individual wants to get done and what an organisation then expects of them.

Like most classroom based training courses, the most a training course can do is raise awareness.  In good financial modelling training, there is a high chance of a light bulb moment (we frequently have people commenting: “I wish I’d known this years ago”) as people realise the huge benefits and potential of a standardised and structured approach to what they are doing.

A good financial modelling course will answer as a minimum: how do I best communicate complex deals using numbers?  And the best courses will recognise that there is work to be done once the classroom course is finished.

Since no complex deal is identical, an individual must be prepared to practise their modelling and acquire fluency.   A fluent modeller is one who is so comfortable with their spreadsheet environment that they can model without even thinking about it – just as a fluent Russian speaker is one who is so comfortable with their language environment that they can speak in Russian without even thinking about it.

Identifying how fluent a classroom based course will make you and – crucially – what continued support is offered after the course is completed is important.

Could I become a fluent financial modeller without completing a formal training course?  If so, how does the cost compare with formal training?

  1. 3. What is the training provider offering for free?

A good financial modelling training provider will offer lots of material for free.  This is a sign that they want to make certain that a delegate attending one of their courses is absolutely right for the course.

It is also a recognition that financial modelling information should be shared if the financial modelling community is to improve and promote standardised (and therefore, collaborative) modelling.

So why pay for a training course if you can have it all for free through a classroom course?

First, so that an individual can absorb skills, techniques, knowledge and awareness on an immersive basis – free from distraction, calls on their time and other pressures from home or work.

Second, so that an individual can have unfettered access to an expert in the field.  A good lead instructor will arrive at a course with no greater concern than, that delegates on the course meet their learning objectives – each and every one.

Quiz the training provider on what is available for no charge and what is the added value of paid courses: both online and classroom.

What material is being made available for free and what is the added value of a paid course?

  1. 4. Who bears the risk that the training course is not the right one?

“Return on investment” consists of three elements:

– return;

– investment; and

– risk

By investing in a course an organisation hopes for a return (may we humbly suggest: standardised, collaborative financial modelling enthusiastically promoted by skilled practitioners and enjoyed by reviewers that are delighted at how easy, clear and transparent spreadsheets have become).

But such investment carries risk.

One risk is that a course is delivered badly… but delivering a good course is a threshold competence for most good training providers.  And a good training provider will want to do whatever they can to help delegates that have suffered from a bad course.

Another is that the delegate is on the wrong course.  Test out material offered for free to make sure that this risk is minimised.  Good training providers will be only too pleased to talk through with you to make sure that the course will meet your needs – and that you are going on it, at the right time.

Am I convinced that I am attending the right course?  And have I convinced my organisation too?

  1. 5. What outputs and outcomes might the organisation expect?

Investments lead to outputs and outcomes.  An output is a result over which a supplier has a high degree of influence and control e.g. a school can reasonably be expected to supply classrooms, facilities and teachers.  The school management team can reasonably be expected to influence and control the quality associated with the provision of such resources.

But a school’s outcome is pupils that leave school equipped to flourish in the world that awaits them.  Exercising influence and control over that outcome is difficult.

Any good training company can talk about training course outputs: “on completing our course, you will be more productive, weaned off the mouse, full of Excel shortcuts, able to follow a structured approach and so on…”

But also be clear about where their influence and control is weakest.

I hope that at the end of every course F1F9 runs, that every single delegate will be fired up with a zeal for FAST financial modelling such that they return to their organisations and immediately convince the communities in which they work to adopt a financial modelling standard – and stick to it.  And I also know that once the course is complete then my influence and control in respect of that outcome diminishes.

And that’s why at F1F9 we are investing so much in online support for what happens post course.  We want to help our course alumni influence as much as we can the outcomes of their organisations.

What engagement will I have with the training provider once the course is over?  How will they help me make improvements once I am back at my desk?


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Andrew Berkley
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Andrew Berkley
Andrew has spent one half of his career as a finance professional and the other half in learning and development running finance-based training courses. Andrew leads the senior team at F1F9. He has been with F1F9 since 2013.