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LMS ROI: A Guide to the value of an LMS

Employee learning can drive your business to hit key goals and high performance across various KPIs.

Now the question is: how are you going to manage the delivery? A Learning Management System is a top choice, but it’s vital that you first evaluate the financial impact and understand the potential return on investment for your own organisation.

7 mins

Written by Mike Hadlow.

Updated 28/04/2023

Why is understanding LMS ROI important?

If you’re reading this, and researching LMS ROI, then you know that the days of relying on manual process, classroom training and paper-based assessments are getting further behind us – and for good reason. Manual admin is one of the biggest drains of time and resources for HR and L&D, and also makes departments far more prone to mistakes and blind spots.

Companies leave themselves in a vulnerable position if they can’t rely on automated processes and systemised approvals. With the right solution, you can create a valuable financial impact and a strong return on your investment.

If you’re considering investing in a learning management system for your business for the first time, or you are taking a lead in the implementation, it's crucial to consider the financial impact of such an investment.

By evaluating the potential LMS ROI you can make sure it aligns with your business goals and generates measurable outcomes. That way, you can be confident that you're making an informed decision that will benefit your organisation in the long run. 

So, don't skip the financial evaluation! It's essential to assess the potential financial impact of a learning investment and this article will help you do just that.

Understanding LMS ROI

Learning management systems reduce training costs by an average of 25% to 40%

These cost savings associated directly with training are just one of the many metrics that organisations can use to measure the ROI of their investment.

Other important LMS KPIs include those related to increased productivity. By measuring these metrics, organisations can determine the true value of their investment and make further data-driven decisions to optimise their training programmes.

For example:

  • Training plans can be tailored to specific roles and preferred styles of learning, streamlining inductions and development journeys and ensuring learning content is targeted.
  • At the same time, managers can get real-time notifications on course completions, recurring issues and instances of non-compliance. This saves a lot of time and worry, and absorbs a large part of the cost associated with traditional forms of training.

Delivering more with less: areas of efficiency 

How can an LMS make your learning processes quicker, more efficient, and more cost-effective?

A good solution can provide the following efficiencies.  

  1. Reduce time-to-competency 
    Getting your staff up to speed is tough when various aspects of their training are spread far and wide.  An LMS pulls them all into one easy to access, easy to use, and easy to manage system. 
     
  2. Avoid risk of repeat training
    Diagnostic assessments make it possible for L&D managers to get an understanding of what individuals and teams already know, so they can focus on developing the key skills they need to focus on instead of going over old ground and wasting time better used elsewhere.

  3. Remote inductions 
    Now that hybrid and remote work is becoming more commonplace, being able to complete entire or partial inductions from any location, on any device, saves a lot of time and hassle.

  4. Engaged learners 
    The best learning management systems allow your employees to learn anywhere, anytime - whenever suits them. Mobile apps and the right tools can help you engage your learners, whether at their desk or remotely.

LMS KPIs

To truly understand the value of the investment for your organisation, it's essential to track and measure key performance indicators (KPIs). In this section, we'll explore some example metrics that can be used to benchmark and measure the ROI of your LMS. 

Calculating the potential ROI of an LMS for your organisation involves taking into account all of these factors and more.  That’s why we’ve built an online LMS ROI calculator!   Explore the potential ROI your business can achieve by implementing an LMS. 

Why your choice of Learning Management System matters

It's important to note that not all Learning Management Systems are created equal. While each solution aims to provide an efficient and effective learning experience, some may fall short in certain areas, such as: 

  • user experience 
  • functionality 
  • flexibility 

Investing in a subpar system can actually result in frustration for learners and administrators alike, leading to decreased engagement and productivity.  

Moreover, a poorly designed LMS may not offer the necessary data and insights to track and measure the ROI of your training efforts accurately. It's crucial to choose a solution that aligns with your organisation's goals and requirements and can grow and adapt alongside your business needs. (Check out our simple article How to choose an LMS for more on this). 

Your LMS and regulatory compliance 

When evaluating the financial impact of an investment, it's important to consider how well it's equipped to support regulatory compliance. This may include features such as: 

  • automated compliance tracking and reporting 
  • customisable training content to meet specific regulatory requirements 
  • integration with other compliance management tools 

By investing in an LMS that prioritises regulatory compliance, you can not only reduce the risk of costly compliance violations but also streamline your compliance management processes and improve overall organisational efficiency. (Take a look at our article on Learning Management Systems for Compliance) 

Save time and money with eLearning through an LMS 

Traditional learning programmes and training days tend to involve a range of specific costs which quickly add up to a significant amount when multiplied across your workforce: 

  • hiring professional coaches 
  • travel to external sites 
  • food and drink costs  
  • missed working hours 

With eLearning courses accessed via an online solution, your business can reduce these costs by taking a more agile, tech-first approach that doesn’t require staff to travel or take full days off for external training. 

This allows employee learning to sit neatly alongside normal work, rather than in opposition to it. 

It’s also why many organisations are now investing in an LMS and eLearning as a way to cater to the needs of hybrid and remote workers, training from any location is a great way to optimise training processes and get staff up to speed much faster than before. 

Such as being able to access eLearning for: 

Beyond the clear cost and time savings, eLearning makes it far easier for staff to refresh specific areas of knowledge as and when needed. Different formats and styles of content such as virtual classrooms, video walkthroughs, bitesize courses are available to suit a wide range of learning needs.
  
An intuitive Managed Learning system, with an LMS and eLearning, that provides diagnostic assessments also ensures that employees don’t keep repeating the same training again and again – so they can instead focus on developing other, more valuable skills.” 

Jess Gillett, Product Manager The Access Group
Author Mike Hadlow

By Mike Hadlow

Learning Solutions Expert

Mike Hadlow is a learning solutions expert in the Access Learning team. With over ten years in the industry, his role as Business Development Manager sees him deliver Access Learning solutions to organisations looking to offer engagement, performance, safety and compliance.