What are the points to consider while budgeting for your LMS?
What is the ROI from Online Training? How is ROI calculated for Online Training Program? What is the best budget and investment required for a new online training system? There are various such points to be considered while budgeting for your new Learning Management System.
Organizational objectives, goals, strategies, and plans differ in each organization. Business strategies and implementation plans are well-defined as per short term and long term goals. However, out of a few common points, one of the factors is to retain the top talent in any organization. Being a top leader in your organization, it is your responsibility to keep your employees happy and informed so that they are competitive. Employee professional development is the best way to train them in order to retain them.
Let us consider a few important points that need to be closely considered while budgeting for your new Learning Management System to retain the best employees:
- Return On Investment (ROI)
The most important factor while fixing budget for anything is to think about the Return on Investment (ROI). Obviously, you would like to invest your money where you see good amount of return. Sometimes it may be very difficult to measure the ROI of online knowledge training portal since it is an intangible asset. It is also difficult to measure effectiveness in real terms and with accuracy. As per various studies, it is found that every dollar spent gives you approximately three times return and over the period of time investment needs to be reduced to attain the same or even more return in most of the cases. You can still experience the upward growth pattern for your employees in longer duration. The amount to be invested should be aligned with the business plan and goals that are needed to be achieved.
- Pricing
In today’s world, there are various options available for Learning Management System. The pricing depends on various factors, models for different online businesses as per their business strategy. It is always better to do all sorts of researches on pricing other portals charging for eLearning courses. You should try to find the best pricing model as per your need and to fit your LMS budget. There are primarily three options available for pricing; these are explained below:
- Cloud based
- By User: The pricing model is pay per user. You do not have to download the software to use the eLearning Management System. Users can access the eLearning content at anytime from anywhere. The pricing model is the fee charged on monthly basis to online learner using the Learning Management System. This fee is based on the user and not on the basis of the feature or modules so that even if you don’t want some features and think of reducing the fee, it is not possible in this pricing model. You will have to pay monthly or annual fee to the Learning Management System vendor on the basis of the number of users.
- By Usage: You should pay by usage for your learning management system on the basis of tools and modules. The payment arrangement is on the basis of number of tools used and the number of users. You have flexibility of choosing and using the tools on the basis of the requirement. You should always check and verify with the vendor about the terms and condition of the usage of the tools or the modules.
- By Active User: This is good option for large corporates where you have 100s of users registered on the eLearning Management System. In this pricing model you don’t have to pay on the basis of the registered users but only for the users who have actually taken training courses online at the same time.
- Self Hosted
- Flat Fee: If you can host the Learning Management system, this is the best option. Flat fee pricing is the best option. The fee is not increased due to number of users or the modules used. Flat fee needs to be paid annually to the LMS vendor.
- Perpetual License: An Organization pays a flat fee for the learning management System to the vendor. This perpetual license fee covers all the modules of the product. The organization has to pay the license fee once and then it can download the software so that it can host it locally for using it. This gives them the right to use the LMS for the period they wish to use it. Most of the LMS vendors are providing free upgrades to the system.
- Free LMS:
Open source is the best option to develop any portal. There are various learning Management System options available for free with the help of such open source modules. You need to be a technology person or need to take a person with technology background to help you with the setup and customization of the same as per your requirement. If you take help of an LMS consultant to do the setup and customization for you, ask them for training your employees so that the maximum people can use the same with ease. Check out for any hidden fees, charges, tech support, customer support, or probable issues that may arise in the future with the LMS. You should also try to figure out the maintenance charges if required from the same vendor for the LMS.
As per various studies, it is evident that training of an employee leads to better development and improved business ROI. With the help of reports and its statistics, it is much easier to identify the best budget for your new Learning Management System for training in your organization. Once you are done with setting up the budget for your eLearning Management System, it is then possible to shortlist the best LMS platform for your organization.
Do you need proper guidance to find out the best Learning Management System on the basis of your budget and requirements? Read our next blog to know more about the key criteria to choose the best Learning Management System.