Calculating Learning Management System Costs: 7 Factors eLearning Professionals Should Consider

Finding the right Learning Management System is vital, but calculating all of the costs involved can be a challenge, to say the least. In this article, I will highlight 7 of the most significant Learning Management System costs that you may want to consider when creating your eLearning budget.
Calculating Learning Management System Costs: 7 Factors eLearning Professionals Should Consider

7 Factors eLearning Professionals Should Consider When Calculating Learning Management System Costs

Learning Management Systems are one of the most essential eLearning design and development tools. They give eLearning professionals the ability to create and deploy eLearning courses that are accessible to every member of their audience, as well as to track learner progress. In this article, I’ll offer an in depth look at the costs eLearning professionals can expect when purchasing a Learning Management System.

  1. Setup/Signup expenses.
    The setup fees for Learning Management Systems can vary greatly, depending on the type of LMS, features, and add-ons or upgrades. Some LMS vendors require a one-time fee, while others may ask for a monthly or annual payment. Certain LMS providers even charge extra if you want additional support services, such as email or phone support options. Before purchasing the LMS, it is essential to find out about any hidden upfront costs that can make an unexpected dent in your eLearning budget. Read reviews and speak with their customer service department to verify that the price tag includes any and all services you need.
  2. Per-Use/Per-Learner fee.
    There are certain LMS platforms that require a per-use or per-learner fee. In the case of the Pay-per-Learner (PPL) solutions, you will have to pay a flat fee for every user. In other words, every learner that signs up for your eLearning course and logs into the Learning Management System will result in an additional fee. This can get quite costly if you expect a high turnout for your eLearning course. If you opt for a per-use LMS solution, then you will be expected to pay for every eLearning course user, depending on the LMS vendor’s pricing structure.
  3. Maintenance.
    This can often be one of the most significant costs that you’ll have to bear when using a LMS. In fact, maintenance usually costs roughly 15 to 20 percent of the initial cost of the Learning Management System. It is not a direct fee charged by the LMS vendor, as maintenance will be typically carried out within the organization. For example, integrating the LMS system into your current Learning and Development strategy and updating the software on a regular basis usually involve extra fees. This is one of the primary reasons why cloud-based LMS solutions are so popular, as the LMS vendor will generally update the system automatically at no additional cost.
  4. Licensing fees.
    In some cases, LMS vendors charge a licensing fee that must be renewed periodically, such as every year or bi-annually. In order to continue using the LMS system, eLearning professionals must ensure that they are up-to-date with their licensing fees. The cost of licensing fees differs greatly from vendor to vendor. As such, it’s important to verify if the LMS solution involves just a one-time fee or you will be expected to pay a license renewal fee as well. If a renewal is involved, be sure to ask how much and how often you will be required to pay.
  5. Training.
    After all of the upfront, licensing, and maintenance fees are taken care of, you must then pay to train your eLearning team on how to use the Learning Management System effectively. Depending on the complexity of the LMS, this can be a major expense. Keep in mind that you will also need to carry out regular training sessions, especially if there are updates or changes to the Learning Management System. Not only does training require payroll hours, but you must also cover the cost of the instructor, if necessary. Some LMS providers offer one-on-one training support, but it does come at a price. This is why it’s always wise to choose a LMS that offers a good balance of usability and creative freedom. Selecting a tool that is ideally suited to the skills of your eLearning team and offers them the flexibility they need to develop effective eLearning courses is key.
  6. Learning and Development Staff.
    Even if you are working with a relatively small eLearning organization, you will still need to have the necessary staff on hand in order to use the different facets of the LMS. For example, an Instructional Designer, IT specialist, and eLearning content manager all play vital roles in the eLearning course development process. You may also need dedicated Learning and Development staff to maintain the LMS system and take care of any glitches that may arise, as well as update the eLearning course to include new online content. Get  feedback from your Learning and Development staff prior to signing up for a LMS, as they can give you a clear indication of what functions they are looking for and which skills they can bring to the table.
  7. eLearning Content Developers/Subject Matter Experts.
    This particular cost is often overlooked, as it is not typically regarded as a LMS expense. However, in order to get the most use out of your Learning Management System you will need Subject Matter Experts and eLearning content developers who can provide you with the learning materials you’ll be uploading into your eLearning platform. They can also give you a clear idea of what information needs to be included and what can be omitted. In fact, it may even be wise to consult with a Subject Matter Expert before you choose the best LMS solution, as they can offer insight into which LMS features you’ll need, as well as what online activities or multimedia elements the tool must support.

Knowing about all of the major costs involved can help you choose the best LMS for your needs and your eLearning budget. It can also give you the opportunity to create a more accurate estimate for your next eLearning project, as well as choose the pricing structure that is right for your organization.

Want to learn more about LMS pricing models? Read the article The Insider's Guide To Learning Management Systems' Pricing Models to find out about the different pricing structures available, so that you can determine which is ideally suited for your eLearning.

 
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