8 Expenses You’re Overlooking When Calculating Your LMS Budget
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Overlooked Expenses To Consider When Calculating Your LMS Budget

Did you receive the first bill from your LMS provider and it was much higher than you expected? Many organizations tend to overlook numerous expenses when calculating their learning management system budget. There are several factors associated with an LMS on top of the license and monthly subscription fees. Identifying these "hidden" costs beforehand can help you allocate your resources more effectively, as well as plan ahead for surprise expenses that can cause LMS implementation delays due to budgeting issues. Here are 8 overlooked costs to consider when calculating your LMS budget.

8 Crucial Learning Management System Expenses

1. Set Up And Installation

The signup fee completely depends on the LMS provider. Some providers charge it up front while others may have a monthly subscription fee. You need to ask the LMS provider what the signup costs are and the frequency of payments. Another cost to consider is installation. For example, self-hosted systems require you to download the software onto your local servers and set up the platform. That involves IT techs, LMS admins, and other key players who need to oversee the process.

2. Per User Fee

Many LMS providers have packages that allow a certain number of users to log in to the system. So, if you are looking to add more users there is a fee that must be paid per user, or you can usually upgrade your package to raise this cap. However, if you simply need to add one or two users, then it would be more reasonable to just pay the additional user fee. You should also ask the LMS provider whether they charge per user or "active" user. The latter option only charges for users who have logged into the system within a certain time period, usually the past 30 days.

3. Support Services

Some LMS companies may provide services over chat or phone for free while charging you for visits. Whatever the case may be, you want to make sure that it is clear which services they offer and how much they cost. You should also verify if there are additional fees in case something goes wrong. For example, your team encounters a programming glitch and the LMS vendor must provide one-on-one tech support. This will allow you to put a rough figure in your learning management system budget each year to cover unexpected emergencies.

4. Upgrades And Updates

Like any software, with time the LMS needs to be updated to improve functionality. Some LMS providers may provide updates for free while others have a fee associated with it. As a general rule, cloud-based options provide regular updates to reflect modern tech trends and advancements while self-hosted solutions require you to pay for additional software upgrades. However, you should clarify this with the LMS vendor to avoid unexpected charges down the line.

5. Long-Term Maintenance

Unfortunately, the LMS doesn’t run itself. There’s a significant amount of maintenance involved in upkeeping the system and the content within. This involves a broad range of expenses. From hiring an LMS admin to delegate tasks and manage reports to purchasing LMS add-ons that make life easier for your L&D team and enrich the online training experience. You must also think about the cost of replacing your self-hosted LMS software to accommodate your evolving online training needs. For example, in 2 years your organization will have doubled in size and you need a scalable, flexible tool that can adapt.

6. Team Training

Chances are most of your employees will not be familiar with the LMS. Even if they’ve worked on corporate eLearning projects in the past, they most likely involved a different platform. Especially since there are so many LMS solutions to choose from these days. Thus, they’ll need some basic LMS training to utilize the software’s features to carry out their work duties. Certain LMS vendors include this training in the up-front cost. For example, a trained tech will spend time with your L&D team to show them the ropes and help them maximize functionality. However, even this one-on-one support requires payroll hours and your L&D team will still have to deal with an on-the-job learning curve.

7. Content Creation

While most organizations may opt for creating content on their own, others outsource it to eLearning content providers. After all, they have experts on their team who know the subject matter and how to convey it in an easily digestible format. However, both options come at a cost. Either you have to pay for in-house development, which involves eLearning authoring tools and payroll hours, or hire a vendor to create the online training content on your behalf. You must also consider online training content maintenance and revisions over time when calculating your learning management system budget.

8. Data Migration And Software Integration

You must move your existing data to the new platform and ensure that the LMS is compatible with your current toolbox. Migrating the data requires time and resources. Likewise, if you find that your new LMS doesn’t mesh with your current software, expect additional fees. For example, you’ll have to pay to replace your CRM or eLearning authoring software to prevent future tech obstacles. Pay close attention to the spec support to find an LMS that delivers suitable formats and complements your existing software suite.

Conclusion

This article can help you get a better understanding of how much you will be paying for your new LMS. It also gives you the ability to narrow down your search for the most reasonable LMS provider based on available resources. Keep in mind that while some fees may seem extraneous, they can improve LMS value for money. For example, additional support services are an additional expense, but they enhance the functionality of the software. It’s not simply a matter of how much you’ll pay, but what you’ll get in return. If stakeholders are reluctant to buy-in, remind them of all the rewards they’ll reap with the investment.

Search our online LMS directory to find the best LMS in your price range. It also highlights their key features, support services, and pricing plans so that you can make a well-informed buying decision.

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