How to Calculate Learning Management Platform ROI?

If you have a Learning Management System (LMS) and are wondering how to calculate the Return on Investment (ROI), here’s a quick 6-step guide for you. Using this approach, you can determine how and if your LMS is increasing profits and productivity for your company. 

1. Calculate the time spent 

A learning management platform is designed keeping in mind an employee’s schedule, enabling them to access training modules as and when required. This eliminates the need for a business to spend its time conducting 1:1 sessions with learners. Furthermore, LMS enables faster and improved results as well as enhances the efficiency of training sessions. To calculate LMS ROI, you can determine the payroll hours and employee seat time for each online training activity, and compare it with traditional, on-site training sessions. 

2. Eliminates expenses associated with traditional training models

Deploying an LMS, you can reduce expenses as there is no need to rent a training venue, or dip into the company budget for transportation and living arrangements of the instructors. All you need is a desktop or mobile phone to take up real-time training sessions. With access to an LMS, you get to save on non-compliance penalties as the LMS automates the storage of compliance-conformance records. To calculate the learning management platform ROI in this scenario, pull up the expense sheets of past L&D teams and compliance reports, and eliminate all the training expenses associated with traditional training models. 

3. Review retention rate of top talent

Companies that invest in the professional growth and development of employees are likely to retain employees in the long term. Onboarding new employees is relatively more expensive than retaining existing employees. LMS enables businesses to retain their A-players by providing upskilling opportunities through in-house certifications. Consider the increase in employee retention rates to calculate learning management platform ROI.

4. Factor-in costs incurred due to lack of compatibility and support for integration

If your LMS doesn’t support integration with third-party tools or compatibility with a new training module format, you will need to replace your learning management system. Imagine the heavy cost pertaining to migration of resources and additional tools or personnel required to accomplish the same. An efficient LMS chosen after effective planning can help you cut down on expenses such as these. 

5. Chart the learning curve

Consider how much time and resources are spent on training L&D teams to get acquainted with the learning management platform. This is also applicable to the audience. Does the LMS require orientation and extensive training in getting acclimated to its features? This is an important factor in calculating LMS ROI.

6. Factor in upkeep and maintenance costs

Does your LMS have high running costs? Does it require maintenance? If so, you might end up incurring unnecessary expenses. It is wise to invest in a cloud-based learning management system for a cost-effective solution to conducting training sessions. You need to pay a minimal subscription fee, which is followed by zero installation cost. Regardless of which LMS you opt for, it is important to consider upkeep and development costs while deciding for an LMS budget.

G-Cube is among the fastest-growing learning-tech organization in the entire Asia-Pacific region with 80+ awards in the last 6 years, and a noteworthy experience of 20+ years in the said domain. Our LMS (Learning Management System) Suite is highly compatible to the current eLearning needs of varied industries. For any queries, please do write to us.