Important Things To Consider When Building Your LMS Business Case
There are many powerful reasons why you might be interested in investing in a Learning Management System. Ultimately, it will help your organization save time, preserve resources, and open up additional revenue channels. In order to justify the investment in a new solution, however, you need hard numbers. That’s why leaders in learning and development have to determine return on investment as they try to gain buy-in for a new solution. Docebo’s free LMS Project Toolkit was designed to inform you as to what things to include in your business case to make your executives see how a Learning Management System could bring a significant ROI. You will have to make specific reference to the fields of a company’s presence the LMS will have a positive impact. You will also have to mention how the new LMS is going to battle dissatisfaction with the current learning software. Here is a list of some of the things you need to consider when building out an ROI assessment for an LMS solution.
- Time Savings
A state-of-the-art LMS can help lessen the amount of time for both onboarding and learning administration. Take a sample period and a sample set of learners and roughly approximate how long it takes to get a new employee up to the task. Similarly, determine the time required to build training materials and administer learning programs, and how that process could be shortened after a more efficient eLearning system is implemented. - New Employee Training Costs
Getting a new employee up to speed is no easy task. New talent needs the right training to perform their job sufficiently and even excel at what they do. But training is a huge investment. List the resources required to get a new employee up and running, and tie a cost to each. Include cost to train, cost spent on L&D staff and programs, and so on. However, this is not the only thing you will need to keep in mind. Docebo’s free LMS Project Toolkit was designed to also inform you on various other things you will need to consider when building your business case. - Training Deficiencies
Since you’ve come to the point where you’ve decided an eLearning solution is something your organization will benefit from, you probably already know there are shortcomings with the way things are presently done. Rather than qualitatively describing these deficiencies, break them down on a micro-level and tie them to costs. Are training materials undergoing frequent revisions that require printing and reprinting of paper-based documents? Are employees getting the right knowledge they need, right from the source? Pick apart all of the individual costs that are dragging your training down. - New Solution Costs
Between scoping out new solutions, implementation costs, and solution training, it is no secret that adopting a new Learning Management System is going to require an immediate and ongoing investment of time, money, and resources. Don’t be afraid of these costs, and don’t try and mask them when building out an ROI formula. When presenting your desired solution and ROI to those involved in buying decisions, be direct about the costs tied to the new system you’ll be acquiring. You’ll be thanked for it later. - Drive Revenue
Docebo’s free LMS Project Toolkit will also educate you on this last aspect that will be enhanced after an LMS implementation. Make sure to include that in your business case as well. An LMS can also open up potential revenue streams. Leveraging your LMS to increase customer retention, train partners, sell courses externally, or provide consistent training materials can have a massive impact on ROI, so be sure to include any specific plans for potential revenue channels when building your business case.
A new Learning Management System does not instantly bring in extra revenue, of course. Quite the opposite actually as a new Learning Management System implementation includes extensive internal and partner training and investment of company resources. Docebo’s free LMS Project Toolkit was created to fill you in on everything you need to be aware of when deciding to adopt a new LMS. Once you’ve figured out the costs associated with your existing onboarding processes, use an ROI calculator or a spreadsheet to quantify the investment associated with implementing an LMS.
There are certain considerations you need to make that are related with the internal training aspect of your LMS implementation. First, you need to build an ROI spreadsheet or get an ROI calculator. It helps a lot in breaking down the whole process into concrete numbers. It will also give you the chance to present your business case to your executives and support it with some hard evidence. Secondly, you will need to work with HR to determine several important things such as calculating average time for onboarding, turnover rate, average cost per lost employee, cost to train, costs spent on learning and development staff, cost spent on learning and development programs, as well as overall learning and development expenses.
Then, it’s good to establish the cost of managing paper-based systems and determine the cost of updating training documentation. In addition, you will need to calculate the number and rate of employees hired as well as determine the average cost per hire. Another important aspect is the assessment of hiring cycle time and the need to determine the variables used to measure hiring cycle time. What’s more, you will need to determine the costs spent on recruitment and on assessing LMS vendors. Also, make sure to establish anticipated costs of learning software implementation and training. Last but not least, do not neglect to include cost for partner training and customer training.
Investing in an LMS replacement project is no easy task. LMS implementation is a complicated process that needs extensive organization and planning. You will also need to convince your executives using concrete evidence that can prove what a significant ROI an investment in an LMS can bring.
Download the free LMS Project Toolkit by Docebo and gain further insight into how to build your business case to convince your executive team to invest in a learning platform. The free LMS Project Toolkit will also inform you regarding common LMS features as well as benefits of Learning Management Systems.
