4-Step Guide to Calculate the ROI of Your Learning Management System


Let’s face it. Workplace learning is a crucial layer for the foundation of an organization's success. It is attributed to driving performance, increasing productivity, and thus improving business results. According to Great Place To Work “Companies that invest highly in their employees, including training and development, decrease turnover by 65%”. However, many view the Learning and Development function from a ‘cost-incurring’ lens and with it fail to realize the true potential for emerging learning technologies.

A Learning Management System is a key enabler to boost workplace learning and is an integral tool to deliver and track online training. However, merely having a basic functional LMS isn’t enough in today’s competitive climate where your employees need to be given access to up-date content anywhere and on any device. When you invest in a technologically advanced LMS that offers SaaS (software as a service) solution, you reap a gamut of benefits from it, right from automating learning journeys, leveraging reporting and analytics features, integrating with collaboration and performance management tools, to managing third-party and custom content effectively. In this article, we will shed some light on how investing in a next-gen LMS can maximize your training ROI (Return on Investment) and achieve high value to your business.

Cost Savings

Companies are always on a lookout to reduce expenses which is interpreted as increased revenues. With an advanced LMS, you can reduce the cost of traditional training expenses such as instructor salaries, training facilities and cut down on expenses incurred due to printing, shipping, and storing printed material. With online training, the instructor can provide real-time coaching from anywhere in the world thus eliminating the cost of their transportation and accommodation. Additionally, as the LMS can store records, it can provide instant training audit histories thus eliminating the changes of non-compliance penalties against the organization. Finally, having an LMS provides a centralized access point to all aspects of training thus reducing the costs of maintaining multiple systems. Purchasing a Learning Management System as ‘SaaS’ has its own benefits such as no dedicated internal resources, low recurring fees, and no hardware costs. Besides, you pay for online courses to be delivered on-demand with a convenient ‘pay-per-set’ arrangement.

Improved Productivity and Retention Rates

Organizations that foster a culture of training and development invariably produce high-quality performers. Through an LMS, you can train your employees, new and seasoned, to develop the skills needed to drive high-impact results. With A-players in your organizations, you can gain an advantage over your competitors. Higher employee turnover often results in increased costs for training. Employees having access to the opportunities of professional development are more likely to stay in an organization for a longer time and have a positive impact amongst others. With the help of an LMS, you can develop your own in-house certifications for internal positions that don’t require industry certifications. These can prove to be decent incentives for employees to develop and hone their skills.

Reduced Costs of IT Infrastructure

With a gamut of learning platforms available in the market, each having its pros and cons, the right LMS that aligns to your business goals can maximize your training ROI. LMS that is hosted on-premise requires manpower and hardware to maintain. In contrast to this, a cloud-based LMS can cut down on the cost of in-house data storage that requires costly technical infrastructure. With zero installation and maintenance cost, a cloud-based LMS is simple to use that requires no additional training or upkeep expenses.

Saving Time

An LMS is a powerful tool when it comes to prioritizing employees’ time enabling them to upskill more efficiently. Learners can leverage the offline mobile learning capability of an LMS to access training modules from anywhere and on any device as per their convenience resulting in saving time. For organizations, this means avoiding the trouble of organizing in-person training sessions while effectively delivering online courses. For courses that require human intervention, learners can simply log into their devices at the time of the session thus reducing the time taken to travel back and forth from one training location to another. For some courses that require collaboration for assignment, the LMS is a useful, easy-to-use avenue to conduct meetings and communicate online. Online training eliminates the time-consuming activity of managing paperwork. With an LMS, you can efficiently manage data pertaining to employee development.

In conclusion

Selecting and implementing the apt LMS is a notable investment for any business. This tool can not only boost employee performance but also contribute to saving costs. However, not all LMS investments provide you with the desired ROI. To get the maximum value of your LMS, consider the functionality and efficiency of the software. Opt for an LMS that is feature rich, saves time and expenses and lowers your employee turnover rate in the long run.

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