Three Ways to Measure ROI of Your LMS


Organizations are quite clear about the purpose behind integrating the advanced LMS software into their portals. New employees, who are on-boarded, are required to undergo training to understand their new roles. Even the existing employees are needed to upgrade their skills and know-how so as to adhere to the changes in business requirements and market. That being said, Learning Management System tends to be a bit abstract and strewn in its implementation, and hence it has become a vague praxis. In order to ensure the eLearning platform is yielding the desired results, it is essential for the organizations to measure the ROI of their LMS.

How to measure ROI of your LMS?

return on investment lms

An LMS software solution is capable of disrupting a company’s organizational goals revenue in many distinct ways. 

Here’s an example – If we consider a University and an enterprise, both of these bodies will have two very different approaches when it comes to imparting learning. The University will go the traditional way and provide classroom-based learning and the corporation will typically conduct a once-a-year training event. However, if both the University and the enterprise decide to integrate eLearning courses into their learning programs then they will definitely see an altogether different result. Their learners would benefit most from online eLearning courses. The implementation of eLearning platform yields various cost-effective results and organizations are benefiting the most out of it. 

That being said, there are three general types of ROI that all organizations experience through LMS solutions to varying degrees.

3 areas to consider while determining ROI of your Learning Management System

1. Cutting down the costs

One of the major aspects of LMS  is to reduce the many expenses involved in corporate learning endeavors:

  • LMS cloud solutions reduce IT infrastructure needs – These days, most of the Learning Management Solutions are hosted in the cloud, so the vendor records and maintains each client’s data. There are many times when any client may decide to upgrade from an existing LMS solution that’s hosted on-premise. This upgradation will then require resources and staff to maintain. By upgrading to a cloud LMS solution, an organization can predominantly reduce these costs and can easily measure ROI of their LMS software byproducts. 
  • Reduced corporate learning expenses – For organizations, who are seeking an alternative to the traditional classroom-based learning, LMS is the ultimate platform to confide upon. Those with existing LMS should upgrade to the Learning Experience Platform, so as to earn the same degree in an online setting. Empowering the employees with adequate knowledge and skills demands for a suitable training program. If you’re a company that provides certification reimbursement just like most of the IT businesses do for Microsoft certifications, you should definitely reconsider it. By providing learning courses through an in-house LMS can dramatically reduce your training expenses, whilst offering access to a huge learning audience within your organization.
  • Trailing on compliance – Compliance tracking saves organizations from penalties and helps them maintain a transparent audit history. One of the significant advantages of LMS integration is that employees can undertake online training for compliance-based roles. These roles can cater to healthcare, safety, human resources, and many other sectors. The solution stays on top of on-going certifications i.e. your advanced eLearning software can arrange for renewal training programs, where an employee gets notified about their certifications’ expiry and are urged to enroll. Employers can easily maintain their audit, as everything is recorded in the LMS system to avoid any penalties against your business.
  • Training expenses on assets –  With the inception of eLearning software, organizations don’t have to worry about arranging for training content materials. The learning content is saved digitally which can easily upgraded and tailored for each new batch of learners. 
  • Travel expenses such as air tickets, accommodations, pay, productivity etc. – Businesses, especially the franchisors had to spend on travel and accommodation for their staff’s off-premise training programs. Hotels, conferences, workshops are no longer required. Franchisees can now easily arrange for eLearning sessions for their staff, thereby eliminating the travels and other administrative expenditure. 

2. Saving time

Apart from being cost-effective, an LMS platform can significantly reduce time spent on training. Learning Management System is a useful tool for prioritizing employees’ time, helping them be more efficient in the following ways:

  • Access to eLearning saves learners’ time – Employees can easily access their LMS platform anytime and anywhere as per their convenience, whether its during downtime at the office or at a cafe or home in the evening. Thanks to the onset of mLearning (mobile learning), employees don’t have to do back forth from a lesson’s location. These days most of the lessons may be synchronous, which means there’s an instructor in real-time. Employees will be notified from their mobile learning apps and they just have to log on to the system when the course begins.
  • Faster collaboration – Some learning modules may demand for learners’ collaboration over assignments. With a Learning Management System, meeting and communicating online are made easy. LMS solutions often include discussion boards for learners to share materials and discuss regarding the course through chat.

3. Boosting productivity

LMS can dramatically boost productivity. if leveraged correctly then this eLearning software can yield a long-term impact. Here’s how:

  • Reduced turnover – As per Better Buys research,

Employees who have access to professional development opportunities are more likely to stay.

Even when employees not actively engaged at work, having access to eLearning courses still makes a significant impact on their likeliness to stick around another five years. The reason being, employees, especially the millennials feel empowered by regularly honing their skills and know-how. 

  • Higher engagement – An LMS platform provides high-quality training that leads to high-performing employees. Performance-oriented culture yields several advantages within an organziation. A-level players are more likely to stand out, which has a positive effect on everyone’s daily workflow.
  • In-house certifications – For positions that don’t require an industry certification, companies can still develop their own certifications within the LMS solution. Gamification feature in a Learning Management System such as badges and rewards encourage employees to learn fast and grasp the required knowledge to perform better. Businesses can introduce internal certifications such as leadership training or any soft skill through online training platform. These courses can viably prepare employees for the next steps in their careers.
To conclude…

The cost of an LMS solution varies, mainly depending on the number of learners. But the larger your pool of learners is, the higher your return will be, as you’re no longer spending money on expensive off-premise trips for training and have a greater share of productive employees who are less likely to leave.

Some of these benefits are immeasurable, but with the right LMS solution many metrics can be tracked to give you an accurate ROI. These metrics include attendance and custom scoring, giving your administrative team the data it needs to grow training programs effectively.

Sparkwork can be your start-to-finish guide in upgrading your existing LMS or help you start from the scratch. Book a free demo today here