There are many LMS offerings that have sprouted over the last year, trying to keep up with the rising demand from educators and other institutions. There are numerous colleges and higher education institutions in the country, serving Tier 1 - 3 cities, ensuring reach of quality education and in some cases, meeting basic education needs for the population. With the pandemic disrupting lesson delivery models, most institutions have adapted to the change and adopted various technological offerings to continue educating their students and capturing new student prospects digitally by implementing marketing automation, funnel data analytics and real-time data platforms. A key module of an institution’s online presence is the Learning Management System (LMS). Previously, there were companies like Moodle, Blackboard and others with specialized online lesson delivery features to make accessing lessons as easy as possible but with changing consumption patterns, companies like Google and Microsoft have tailored their systems to serve the same cause. India has become the second largest market for e-learning services after the US and the sector is forecasted to reach ~US$ 11.6 billion by 2026.
With choices aplenty, how do educators gauge the many LMS products that are out there and if their investments in digital offerings are providing the right benefits to students and returns on investment (ROI)? There are a couple of qualitative ways to assess your LMS ROI:
- Compatibility And Data Integration Costs
A new LMS solution may not integrate or be compatible with incumbent tools and systems and perhaps requires the purchase of additional meshing software, which translates to a cost over and above the LMS software. Time to integrate data and team training are also important considerations to make when determining effective ROI of the LMS.
- The Costs Of Setting Up and Running An LMS
It is well established that cloud-based systems are cost-effective with ease of management and navigation. Cloud-based LMS solutions that have zero installation and maintenance costs also save on the expenses of having an in-house data storage system that requires expensive technical infrastructure. Most solutions on the cloud have faster adoption rates therefore staff training time and costs can also be reduced. However, many solutions have their pros and cons and it’s best to forecast what kind of non-monetary investments will be incurred after the LMS is purchased, which is often overlooked when pre-determining LMS ROI.
- Online Training vs. Traditional Training
How is the LMS going to contribute to employee training or student learning in terms of convenience and time. By drawing a comparison of traditional, in-person training and online training, if the benefits derived outweigh the non-financial investments, an LMS purchase is considered to be a worthy one. In today’s world, educators are expected to upskill at a quick pace, and students are expected to build vocational skills. The ease at which the LMS system allows for these targets to be met, the higher the advantage is for the institution. Time translates to money and LMS systems must allow for efficient exchange and management of data, leading to a higher ROI.
- Employee and Student Retention Rates
Employees and educators with access to training and development opportunities are more likely to want to continue in the institution. Through a robust LMS, educational institutions can retain faculty and students and continue to cultivate and hone their skills, which will give them a satisfying learning experience and in turn, increase the competitive edge of the institution. The happier the students and parents are with the delivery of lessons online, the more opportunities there will be for a higher rate of incoming students year on year. A seamless learning experience supported by a good LMS has become the need of the hour and likely to be vital for educators going forward.
- Time to market
A paramount factor to include in the LMS ROI assessment is the time to market. If new course content needs to be added or updated to recent developments, the LMS platform should be able to easily facilitate the mission without the third-party applications and integrations. By including and linking related supplementary materials available on the internet on a regular basis, students won’t have to switch between learning applications and are likely to develop a stickiness to the institution’s LMS platform. This reduces the time and effort required from a teacher outside scheduled classes and inculcates an independent and fulfilling learning experience.
Modern learning experiences usually require significant technology purchases. Implementing an LMS is a significant short to mid-term investment for any business and its economic viability and product usability must be determined before purchase. A key audience to test the usability are the primary users - teachers and students, keeping their teaching and learning requirements in mind. A bottom-up decision on picking the right LMS is preferred over the top-down decision process as the users will be different from the buyer.
Apart from the qualitative methods of assessing LMS ROI, the quantitative methods used are cost-benefit, break-even analysis and net present value (NPV) analysis. Each of these methods come with their own inputs like projected student intake, fixed and variable costs, discounted cash flows and others that go into making the decision to buy.
It is not necessary for learning practitioners to understand what goes into an ROI evaluation but an awareness of it will go a long way in influencing the management in purchasing best-in-class learning technology resources.