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Learning Management Systems have become an indispensable tool for training & elearning companies as well as the corporate for their employee training programs. Most companies use the LMS for internal training & certification, compliance training, employee on-boarding, dealer or partner training and to sell courses online. Organizations spend an average of $70,600 on their LMS annually, a whopping $5,885 per month (Research by Capterra).

Are you really deriving any tangible or intangible benefits from your LMS investments?

Do you or your organization still consider LMS as IT expenditure?

Most likely, the LMS is very loosely tied to your learning and development strategy making it difficult for you to achieve measurable ROI from the investments. Let us look at some of the areas where you can save costs and improve your revenues by deploying a modern Learning Management Systems.

With a modern LMS, you save on

  • Trainer Fees or Salaries as the course can be delivered online
  • Travel and Accommodation expenses as LMS offers anytime, anywhere mobile access
  • Training Facilities and Administrative costs as LMS courses are web or mobile ready
  • Learning assets printing, shipping and distribution costs
  • Downtime, Security Incidents, Fines and Risks if the employees are effectively trained on compliance and Standard Operating Procedures Training

And you gain from

  • More productive work hours per employee as they spend less time on training
  • Faster Training need identification since LMS provides performance reports and feedback
  • Better quality of product or service and more satisfied customers.
  • Faster and more course completion rates
  • Higher employee retention & morale
  • Lower Operating and re-work costs
  • Faster time-to-market due to on-the-go training. This is especially true for Field Sales & Marketing Teams

You can track and measure these to understand the true size of the returns on your LMS investments. Some of these savings and gains are tangible or quantifiable, while others offer intangible benefits. You can calculate the return on your investment by dividing the sum of these gains and savings with the cost of the learning management system.

[Gains + Savings] / Cost of the LMS = Return

Building a business case for your Learning Management System is crucial to demonstrate the business benefits and returns for all the stakeholders in the organization. The L&D or HR teams can use the above method to understand if their existing LMS is proving valuable or not. As research suggests, about 26% of people are unhappy with their current LMS (Research by Capterra). It is imperative for such organizations to carry out a detailed Cost-Benefit analysis of their current LMS. The next time you want to start a new training program, try considering the above mentioned indicators for the ROI calculation.

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