Calculating the ROI of a Learning Management System (LMS) In today’s fast paced world, it’s essential to implement training programs that are aligned with your company’s business goals, resulting in a positive effect on your bottom line, that aligns to either revenue or cost savings. By incorporating an LMS into your training program you can realize measurable training ROI and immediate cost savings. To be a success, you LMS will provide the necessary metrics you need to demonstrate ROI.

Note the examples below to measure ROI:

  •  Lower administrative costs for training program management
  • Reduced travel and facility costs with eLearning and virtual classrooms
  • Increased revenues due to faster employee time-to-proficiency
  • Improved time-to-market training of sales, customer service, and business partners
  • Increased revenues due to better customer service and higher levels of customer satisfaction
  • Less financial risk associated with meeting regulatory compliance requirements
  • Decreased employee turnover costs by providing focused training and development
  • Improved company performance by ensuring training activities strategically align with employee development needs
  • Reduced IT hardware and support costs by utilizing a Cloud-based LMS rather than an internally installed software system

 

The following example provides a high level overview of calculating ROI, and they include only the tangible measurement areas. When you take into consideration some of the intangible suggestions listed above, then incorporating an LMS into your training program brings with it far greater rewards. 

Example One

You have fifty people from a national sales team booked on a 5-day classroom based training course. The eLearning course can be completed in three days:

* The opportunity cost for each learner is $1,000 per day. First year savings - $124,400 (42.9%)