10 Ways to Maximize ROI of LMS — Kloudlearn LMS + LXP

According to Investopedia ROI can be defined as a financial metric that is widely used to measure the probability of gaining a return from an investment. It is a ratio that compares the gain or loss from an investment relative to its cost. It is as useful in evaluating the potential return from a stand-alone investment as it is in comparing returns from several investments. Return on investment (ROI) is a crucial metric for any business. So is ROI of LMS.

ROI is important for measuring business success over time and as takes the guesswork out of making future decisions.

Why Calculate Training ROI?

Training is like any other investment; you need to gather data to see if it’s working. Training helps equip your employees with more information and skills that help them do their jobs better.

A negative return means the training isn’t having the desired effect. Maybe it’s too expensive. Or it’s added another layer of task that your overburdened employees don’t have time for.

Why an LMS?

Investing in a new LMS might look like a daunting task for any company, as it requires shortlisting an LMS from several vendors, evaluating various features, customizing the solution, migrating data onto the LMS.

Intelligent use of LMS capabilities can mean the difference between an accurate investment of resources, and spending an L&D budget in the dark.

That is why having a robust ROI measurement system in place is vital to analyze if your employee training is so crucial.

The ROI of a New Learning Management System (LMS)

ROI stands for return on investment. It is an economic indicator that shows the impact of your training program in monetary terms. With ROI, you’re getting past lower-level evaluations of training impact like employee satisfaction and cutting straight to the bottom line: for what we spent, what did we get out of this training?

ROI of an LMS is a purely economic measure. It indicates the benefits of the training program using an LMS, relative to its costs. Benefits include any economic improvements to your company’s operations that flow from your training, such as increased profit or cost savings.

Here are a few factors to be considered :

  • The number of employees enrolled in the LMS?
  • What is the average cost of each course?
  • Do you pay external Instructors for their services?
  • The cost of travel and accommodation for these instructors?
  • What is your annual budget for an LMS?

Let us look at few areas where an LMS can help you optimize your ROI:

Top-line Revenue benefits

Saving on Infrastructure costs

Unless your organization has a large IT team, Cloud-hosted LMS vendors that offer unlimited and ongoing support are proven less costly than per ticket or per hour formats. Managed hosting solutions support the development of eLearning beyond technical fixes, providing man-hour savings, and giving IT and admin teams the freedom to work on other important projects.

Data Security

Using a cloud-hosted LMS platform an organization can take advantage of external security, such as AWS encryption. While just as (if not more) secure than internal data security software, the costs are likely to be significantly less.

Lowering Training administrative costs

To reduce these repeated costs, you need an LMS that allows your enterprise to create courses, organize, and replicate training content, quickly send them off to the relevant parties, and host virtual instructor-led training sessions and recordings that can be stored and re-watched during another training program.

Cut down Travel expenses

Minimizing lost productivity

Collaborative learning benefits

Additionally, your employees are learning from knowledgeable and trusted sources who are familiar with your brand rather than a random Google search.

Reduce attrition

Time for high-level strategy

Analytics and Higher productivity

A major advantage of an LMS is that it is capable of collecting extremely granular learner data to gain a comprehensive and accurate overview of the effectiveness of your eLearning. Learner data can also be compared year-to-year, allowing you to ensure that iterations of the training programs are increasingly effective. In addition, worker performance can be compared year-to-year to evaluate whether your workforce also is becoming increasingly productive.

There’s no doubt that effective training can be an extremely important variable in organizational growth. But it is also important to know whether you are getting an optimal return on your investment. As with all initiatives, the results matter. However, that being said there is no singular approach to measuring the ROI of your training program. There are various qualitative and quantitative factors to consider, such as the training goal, skill level of employees, employee feedback, training engagement, and performance results. It is also imperative to ensure that training is sustainable and a long term endeavor. Training must be a continuous process wherein employees upskill and reskill thereby improving business performance.

Whether you’re looking to understand how to improve the current ROI of your employee training program or looking to implement a new LMS with engaging training courses, we have the expertise to help you reach your goals.

Why choose Kloudlearn?

An AI powered, Personal Learning Cloud that provides a better way to develop, measure and improve your team’s skills.