Selecting an LMS: Financial

Don't get surprised by hidden costs and extra add ons!

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Selecting an LMS: Financial

A Learning Management System (LMS) is a big ticket software purchase. But, hidden costs and other ‘add-ons’ could take you by surprise.

One that you didn’t expect.

The purchase of an LMS should create a learning experience that ultimately impacts your bottom line in a positive way.

Does the software provide employees the ability to sell better, save better, be more aware of how they’re using company resources or make them excited to come to work every day?

If not, your LMS is not providing the return on investment (ROI) that it should.

It’s easy to get distracted by fancy feature sets during the LMS selection process. If you’re not paying close attention, there will inevitably be hidden ‘gotchas’ that come up along the way in the form of unplanned expenses and labor costs.

Choosing the wrong LMS has profound financial implications.

Research shows that companies, on average, switch LMSs every few years. This could be because the LMS is difficult to use, it doesn’t evolve with business needs or is not able to integrate with other systems, among other things.

Do you really want to make a very large LMS purchase every few years?

Not to mention, all the staff hours it would take to get it up and running as well as a loss in productivity.

So, how can an LMS increase profitability and productivity?

If you want to make a good financial LMS decision than keep these things in mind during the selection process:

  • Leverage Existing Resources. By utilizing technology you already have, this not only reduces costs dramatically but increases efficiency. Even when it comes to maintenance, your staff already know the system and can quickly and easily make updates when needed.
  • Integration. Systems that are not integrated result in significant increases in cost and resource consumption. It’s wise to choose an LMS that has the ability to easily ‘talk’ to all your other business systems.
  • Talent Development. It costs a lot of money and a loss in production when employees leave. An LMS that engages employees and supports their career journey will save in the long run. 
  • Reporting Analytics. A good LMS will have top notch reporting capabilities so you can drill down to specific information that can connect training performance to essential business results.
  • Compliance. A breach in compliance can result in huge financial penalties. An LMS should have thorough compliance tracking capabilities in case of an audit. 

During the LMS selection process, keep these features top of mind while exploring additional requirements.

The Selection Process

It would be natural to assume that choosing an LMS would be a straightforward process. However, there are certain things during the selection process that may not be obvious and could potentially have a financial impact on your business.

Hidden LMS costs should be considered when selecting an LMS.

The most common hidden costs include,

  • Implementation and Setup Fees. Some vendors charge an extra fee for setting up your system, others don’t. If they do, they should mention it. If they don’t mention it, you should ask about it.
  • Licensing Fees. Some vendors give a license for a limited period of time — six months, one year — and demand a recurring fee after that. You need to pay attention if this fee exists, why it does, and how much it affects the overall cost.
  • Upgrade Fees. Not if, but when your business grows, will the LMS handle it and what kind of cost does that entail?
  • Customization Fees. Anything that will be custom to your business and is not ‘standard’ can cost you. Be sure to ask beforehand on what the vendor’s policy is. 
  • Maintenance Fees. Who is responsible for maintaining the LMS?
  • Support Fees. It is inevitable that questions will come up with the LMS. If you have a question or concern, will it cost you? Some resources are free, but others can be an extra fee. Be sure to know which is which before purchasing an LMS.

Utilizing existing technology can reduce or completely limit the hidden costs of an LMS. It makes the most of your organizations existing infrastructure, processes and know-how, resulting in lower overall costs in upfront acquisition, annual per-user license fees and expenses related to support, deployment and integration.

There are many reasons why one LMS may be a better fit than another for your business. Cost usually plays an important factor. By digging deeper into the true cost of ownership of an LMS, you’ll discover that utilizing existing resources can help increase profitability and productivity of your business.

ShareKnowledge is a great choice for those who have SharePoint and want to leverage their investment. There is incredible value provided from an integration, operational ease of use and cost solution stand point. If you would like more information about how ShareKnowledge can solve your learning and development needs, please fill out the form.

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