Why is calculating the ROI of your LMS important? As more and more business processes shift online, encompassing everything from accounts to client support, it’s no surprise that employee training programs are going the same way. Convenience, control, and ease of growth are just three of the many benefits of E-learning. Delivered through a Learning Management System, or LMS, any number of different online learning experiences can be deployed, managed, built-upon and reviewed in-house. It’s a valuable asset, but if you’re looking at investing in a quality LMS, you can expect to incur some costs. In this case, calculating your ROI (or Return On Investment) and seeing whether you’re getting results from your chosen Learning Management System is a smart move.
So, let’s dive into a handful of areas you want to examine when it comes to determining gains and savings in terms of moving your training online.
Calculate Time-Savings Versus Traditional Training
Great training for employees is essential for a workforce that is both confident and efficient. In-work education encourages talented individuals to shine, builds the skills of those just starting out with you, and creates a positive relationship between a business and its staff. Traditional training techniques, via workshops or seminars, can be time-consuming and potentially pretty expensive too – think of travel, accommodation and speaker costs – not to mention the effort that goes into organising these kinds of events. Shifting to E-learning can remove the expense and the logistic headaches by offering targeted training sessions directly to each individual.
Learners can complete courses whenever it’s convenient for them, or in manageable chunks via micro-learning. An LMS is a great time-saver, but it doesn’t mean you skimp on content. In fact, an LMS is a great way to build it. Another way your LMS will help to cut back on time is in the management and evaluation of courses and your employees’ progress. Paperwork generated by training sessions would ordinarily need reviewing, analysing and storing, but a Learning Management System that scans real-time data through robust reporting tools means you’ll not only be reducing your carbon footprint but also minimising the task of evaluating everyone’s learning trajectory. There are many studies out there showing that online training results in quicker skill uptake and continued engagement with learning too. Overall it’s a more stimulating, impactful way to offer training. To drill down further, we’d suggest taking a look at seat-time per training session and the tangible results compared to more traditional forms of teaching.
Review Previous L&D Expense Sheets
They say ‘Time is Money’, but also, money is money and L&D expenses can often run relatively high. Learning and Development for your teams is cash well spent, but do you have a handle on exactly how much you’re spending on more traditional learning experiences? Review your expense sheets to see where your budgets are taking an unnecessary hit. Printed course material is an obvious saving with E-learning but also, how much does it cost your company to take teams away from their work for a day or two or three of lectures and talks? How much are you spending on venues or experiences? And how regularly do you need to do this? In contrast, using their computer or a mobile, your staff could engage with lessons on new topics in a quiet half hour, or spend as little as ten minutes a day brushing up on protocols via entertaining gamified training sessions. A Learning Management System offers long-term interaction with learning, allowing people to build skills module by module. While not all LMS’s are created equal, even the most affordable options should offer a way to grow with your business.
Factor-In Employee Retention Rates
By offering training and skills development to your people, you’re essentially investing in their careers as well as your own business. With a discernable route to promotion and a sense that you value their daily work and want to offer them support to do this well, employees will tend to stay with the company longer. Staff that feel confident in their jobs not only remain with you but they’re also generally happier. What we’re getting at here, is that high staff turnover isn’t great for any business, and neither are unhappy or struggling individuals. The more new folks you have coming in on the regular, the more training you’re going to have to organise, and you guessed it, the more you’ll be spending. If you make the switch online and go for an LMS, you’ll be able to nurture talent and retain them by creating a culture of learning in your company. A Learning Management system can give you the ability to develop in-house certifications, incentivise skill uptake through leaderboards and dynamic modules in multiple formats can make learning attractive and even fun. Ultimately this leads to a competitive edge for your firm since you’ll be holding on to whole teams of motivated, qualified people.
Consider Compatibility And Data Integration Costs
However, at some point, you are going to face some costs associated with your new LMS aside from the initial purchase, and these are generally related to compatibility with any existing software or third-party tools you use. When looking into what savings or gains you’ll make by investing in e-learning, data integration, and any necessary replacement software are key concerns. Do your research when it comes to the resources you might have to provide for migration too, such as extra staff. If you plan well before making the jump and balance this area with the other pros and cons, you should get a nice clear picture of what shifting to a Learning Management System entails for you.
Determine The LMS Learning Curve
A second area you should be evaluating when adopting a Learning Management System also occurs in the period following your purchase. We’re talking learning curves, and how your Learning and Development team are going to roll out the new system. Will your designated admins need some time to get to grips with it? Probably. Will they need any extra resources? Maybe, maybe not. When costing your LMS ROI, these are critical factors. Also, don’t forget your students might need a bit of time to get used to the new way they’re learning too. Some might be incredibly tech-savvy, while others might need a little more support. Are your staff mostly young digital natives, or are they a mixed bunch with some who approach new technology with caution? Consider how much initial encouraging you’re going to need to do, what kind of resources you potentially may need to provide, and include this in your ROI study. Everybody should eventually become pretty comfortable and even happy to train online, but the initial move isn’t always totally free of expense.
Assess The Costs Of Running An LMS
Finally, you’ll need to assess the costs associated with running an LMS to determine your ROI accurately. From the get-go, your choice of Learning Management System will play a significant role in this – and there are a large number of systems available on the market. One decisive factor might be whether you opt for a cloud-based LMS or one that you host in-house. Pros for cloud-based Learning Management Systems include a no-cost installation and maintenance situation and usually, a straightforward user interface, so you’ll additionally be saving some money on administrator training. However, you might end up spending decently on your initial purchase, and perhaps extra over time with licensing fees as you grow your E-learning database. Alternatively, you could opt for an LMS that requires on-site servers. The benefit of this model is that you’ll have total control and they’re mainly upfront about fees at the point of sale. Don’t forget maintenance with either LMS type though, because, for your Learning Management System to yield great results, you will have to pay attention to course building, updating and content development at the very least, outside of set-up or server concerns.
All in all, the LMS you choose has to fit your business model and make financial sense. E-learning is a significant investment in the future of your company, and with careful evaluation when it comes to ROI before you plump for a particular Learning Management System, you’ll likely wonder why you didn’t take the plunge before.
The right LMS for you can significantly upgrade your staff training offering and cut down on the expenses associated with traditional learning methods. By taking into account the efficiency of the software you’re looking at, whether it will save time, reduce your L&D expenses, and cut down on employee turnover, you’ll be left with a clearer view of your position. Ascertain where you might be a little further down the road too – will your firm be comfortably maintaining all the varied streams of online training in five or six years? Or will it get expensive? At the end of the day, conducting a Learning Management System ROI means performing a thorough investigation into initial outlay and projected running costs. It should reveal your ideal system as one that earns you more money than you spend on it.