Increasing the ROI for your new Learning Management System
Before purchasing a Learning Management System (LMS) for your organisation, it is important to develop a Return on Investment (ROI) assessment. This will help find the right LMS for your business with the highest cost savings.
In the past, measuring the ROI of your LMS focused primarily on the cost savings when investing in an LMS. Most LMS ROI calculations use a scenario, such as the one below, to justify the purchase:
Other ROI calculations establish how many staff and contractors need to be trained. The calculations also look at delivering compliance training through an efficient, self-registration LMS, compared with managers delivering face-to-face training.
What to Consider in the ROI for your Learning Management System
The calculations above are a straightforward way to demonstrate the financial benefits for purchasing an LMS; however, the emergence of responsive cloud-based LMS software has delivered many benefits that should be added to an LMS ROI assessment:
- Cloud LMS software has generally reduced the cost of the application
- Ongoing costs (hosting support and training) have also been reduced
- New LMS software delivers additional benefits such as:
- managing risk
- improved dynamic reporting
- personalised training portals
- improved appraisal tools
- tools to improve skills
Using these criteria is a flexible way of measuring the learning management system ROI and helps develop a more comprehensive business case, compared with relying solely on quantitative measures. This frees up time, which links to cost savings.
We suggest that the measurement of the LMS ROI includes both quantitative and qualitative (specific needs, processes and objectives) measurements.
Improvements for the Learning and Development (L&D) team
This relates to time saved and an assessment of how the team will use the time allocated to deliver on KPI’s for the business.
Improvements for learners
This focuses on a more efficient way to deliver training as well as real data for the business. This data may include developing skills, reducing risks, talent identification and dynamic performance data.
Better needs analysis
This has a direct financial impact on reducing the cost of training. The business can better accommodate to all learners and styles through a customised learning and training program. This is not possible in the one-to-many training approach and is a measurement that needs to be identified and monitored.
Improved appraisals process
Improvement in the appraisals process has financial benefits with streamlined administration processes. Benefits need to be measured and included in the ROI as the enhanced process could deliver better business performance.
Better skills management
The right LMS tools can deliver compliance-based training as well as skills development and management. Implementing a skills framework into the LMS can deliver efficient and enhanced tools that will improve business performance and ROI of your Continuing Professional Development (CPD).
Managing risks more efficiently and dynamically is directly related to better skills management. The ability of an LMS to add risk profiling and competency mapping to decisions and assessment in online training can generate considerable cost savings. These savings occur in terms of client retention, non-compliance fines and staff retention.
Better reporting and improved organisational planning
Quality reporting is often a key driver in the decision to purchase. In addition to cost savings achieved from better reporting tools and standard reports, a new learning management system can share this information dynamically with staff and their managers. Streamlined reporting allows the business to make decisions based on real data.
Use these helpful tips and criteria before selecting your new LMS. If you need additional support, please contact us at Mediasphere. We’ll help you empower your human potential.