LMS ROI Leveraging Your elearning Investment
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- Camron Nash
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1 LMS ROI Leveraging Your elearning Investment Expanding the ROI for Your New Learning Management System (LMS) There is little doubt that when assessing the purchase of an LMS for your organisation it is important to develop a Return on Investment (ROI) as part of your business case to support the project. In the past, measuring the LMS ROI has usually focused on the cost savings of investing in an LMS. For instance most LMS ROI calculations use a scenario such as the one below to justify the purchase:
2 Other ROI calculations will calculate how many staff and contractors need to be trained and compare an efficient self-registration LMS to deliver compliance training rather than booking managers to deliver face-to-face training. What to Consider in Your LMS ROI While these calculations are relatively straightforward and demonstrate the financial benefits in purchasing an LMS, the emergence of responsive cloud based LMS software has delivered the following benefits that should be added to a LMS ROI assessment: 1. Cloud LMS software has generally reduced the cost of the application 2. Ongoing costs (hosting support and training) have also been reduced 3. New LMS software delivers additional benefits such as: a. Managing risk b. Improved dynamic reporting c. Personalised training portals d. Improved appraisal tools e. Improved tools to improve skills
3 This more flexible way of measuring the LMS ROI, develops a more comprehensive business case instead of relying solely on quantitative measures (freeing up time which link to cost savings). We suggest that the measurement of the LMS ROI needs to include both quantitative and qualitative (specific needs, processes and objectives) measurements. The Seven LMS ROI Measurements 1. Improvements for the Learning & Development team 2. Improvements for Learners 3. Better Needs Analysis 4. Improved Appraisals Process 5. Better Skills Management 6. Managing Risk 7. Better Reporting & Improved Organisational Planning 1. Improvements for the Learning & Development Team Improvements for the Learning & Development (L&D) team relate to the time saved but an assessment of how the team will use this time allocation to deliver on KPI s for the business. 2. Improvements for Learners Improvements for learners should not focus on just a more efficient way to deliver training but should also include the real data for the business. This data includes developing skills, reducing risk, talent identification and dynamic performance data.
4 3. Better Needs Analysis Better needs analysis will have a direct financial impact in terms of reducing the cost of training. A comprehensive LMS will contribute data dynamically to update the needs analysis. With the ability to deliver a customised learning and training program which is not possible in the one to many training approach, the measurements need to be identified and measured. 4. Improved Appraisals Process A more efficient and detailed appraisals process, could have immediate financial benefits with streamlined administrative processes. Additional benefits needs to be measured and included in the ROI as the slicker process could deliver an enhanced business performance. 5. Better Skills Management The right LMS tools can deliver more than just compliance based training but also include skills development and management. Implementing a Skills Framework as part of the LMS deployment could deliver efficiencies and enhanced tools that will deliver to the business bottom line. This measurement should be included with the ROI. 6. Managing Risk Related to better skills management is the ability to manage risk more efficiently and dynamically. The ability for your LMS to add risk profiling and competency mapping to decisions and assessment in your online training can deliver considerable cost savings to a business in terms of client retention, non-compliance fines and staff retention.
5 7. Better Reporting & Improved Organisational Planning Better reporting is often a key driver in the decision to purchase. In addition to the cost savings achieved from better reporting tools and standard reports, a new LMS can share this information dynamically with staff and their managers. Streamlined reporting allows the business to be more agile and make decision based on real data. So why elearning? Today s organisations experience insufficient training and a lack of knowledge sharing that prevents teams from achieving their greatest potential.
6 The Importance of Real LMS ROI Calculations We recommend that when considering the LMS ROI, don t limit yourself to look only at a scenario based cost saving exercise. The real danger in this approach is that you may select a LMS that delivers only online training. A more comprehensive ROI approach will simplify the selection of the right software for your business. Not all LMS s are the same. Many do not have the tools to deliver on the qualitative measures in your business. The correct LMS can play a pivotal role in delivering enhanced workflows and efficiencies by delivering a personalised and responsive platform that allows your team to respond to changing market place forces. Call us on: or send an to: sales@mediasphere.com.au to find out more about how our LMS is the solution for all of your training needs.
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