How to Calculate an LMS Return on Investment (ROI LMS)

We've reached the last and most essential topic in this series, which explains how to build the ROI component of your LMS business case for your external training company.

With this last piece of the business case jigsaw in place, you'll be able to present your case in the best light possible and get approval from top management.

The all-powerful ROI

It ultimately boils down to calculating the Return on Investment (ROI). How the new LMS will enhance productivity and profit in dollars and cents. The majority of senior executives will read this first and, if they don't like it, will stop reading.

Calculating ROI, like calculating a basic interest rate, begins with the net return you expect (which we'll define later) divided by the investment's cost, multiplied by 100, and stated as a percentage.

The Benefits of Using A Learning Management System (LMS ROI)

If you're considering moving to eLearning or at least including some eLearning courses into your learning offering, we can assure you that you've made the correct choice!

There are many reasons why giving eLearning is a smart decision for your training company, but we're going to concentrate on all of the ways that deploying a Learning Management System (LMS) may help you increase your ROI!

1. Reduced Class Operating Costs

The cost of running eLearning courses vs a classroom-based session is a big advantage for any training organization!

Let's take a look at some of the ways an LMS may help you save money:

• Because the lessons are entirely conducted online, you won't require a physical place, saving you money on external venue rental fees. You may utilize these rooms to offer further classroom-based courses if you provide the training yourself, which means more cash!
• There will be no physical classrooms, which means there will be no physical resources, such as textbooks or printouts.

2. The cost of training

DIY is all well and good until it comes to training efforts, in which case it might actually increase the cost of training.

The expense of performing part or all of your training in-house adds up rapidly (and it's not cheap).

The cost of purchasing physical training materials, distributing those resources, and hiring instructors to help people train costs a lot of money.

3. Costs of travel

While traveling on someone else's money may be a lot of fun, businesses benefit financially when they can reduce unneeded travel in general (as long as it doesn't hurt the firm).

When you have a workforce that is partly or totally remote, or offices that are dispersed across the globe, on-demand training alternatives are simpler and less expensive to operate.

The savings add up quickly with a solution that doesn't need travel, per diem, motels, food, or other expenses.

4. Savings of time

Subject matter experts get the most out of a highly collaborative LMS.

Social learning is an important aspect of how we retain new knowledge. Sites like YouTube have had a huge impact on how we learn anything from short repairs to languages to in-depth projects — we've become used to seeking help from others when we need it.

People often tap more senior colleagues on the shoulder for guidance or criticism on the job. People may learn from each other without having to meet in person if they use an LMS that enables subject matter experts to offer their expertise to various audiences at the same time (on their own time). In addition, rather than going to Google, your employees are learning from qualified and reputable sources who are acquainted with your brand.

5. Make a One-of-a-Kind Offer to Attract More Customers

When you buy an LMS for your company and start delivering eLearning courses, you're expanding your teaching options for your students. This might be the last push that any prospective consumers need to get their training from you. Some students may not be able to attend full-time courses, or they may not be able to come to your training facility to participate in the training in person.

They may complete their training with you through eLearning regardless of their other obligations or proximity to your training location.

Would you like to know about this live? Request a Demo. It is totally free, you will be able to observe SuccessFactors operating live, with business scenarios similar to those of your business, and resolve any questions you may have with the advice of a specialized consultant.