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Paradiso LMS ROI Recipe



The Dollars and Cents of Calculating LMS ROI to Increase Productivity in Business

Investing in a learning management system (LMS) can have numerous advantages. It can help organizations store, organize, and access courses, as well as make it easy to track employee progress and performance. An apt learning management system can even boost workplace productivity, and enhance profit margins. The best way to experience each of these benefits is to improve the learning management system (LMS) ROI.

In today’s fast-paced workplace, time is a valuable commodity. If you are able to do things more efficiently and eliminate redundant work, your organization will save vast amounts of time and money. With an LMS, employees can easily access training courses and resources whenever they need it and from any location. Training and HR managers spend less time managing and delivering courses online compared to in-person sessions.

Demonstrate LMS ROI

How to Demonstrate LMS ROI

To demonstrate LMS return on investment most of the businesses get bogged down with queries such as what kind of ROI will we get from investing in a learning management system? Listed below are few factors that will help you resolve your issue regarding ROI and can help you proceed with choosing the best learning management system and potentially licensing and implementing this solution.

  • Cost effective / Saves time for both learners and administrators

An LMS provides learners with seamless access to courses and materials. Everything is stored online in one place where they can access it anytime from any location on their computer or mobile device. They will be able to complete their training more efficiently, giving them more time to focus on their work tasks. Administrators also spend less time managing and delivering training compared to in-person sessions. There is less paperwork involved and there is no need to manually comb through files and documents to collect and compute information.

LMS ROI -Cost effective Saves time for both learners and administrators
  • Reduction in L&D budget

LMS ROI - Reduction in L&D budget

With a suitable LMS, you can reduce your training costs. On-site training may require costly items such as instructors, travel, accommodations, venues, food expenses, and printed materials. These can add up significantly and eat into your L&D budget. Online training eliminates these expenses as a user only needs their computer or mobile device to undergo training. It also saves training managers time and effort from having to plan and manage all of the logistics.

  • Increase in the retention rates

Employee turnover is very costly and businesses fail to value the importance of retaining their staff. Employees will be more likely to stay with the company if they perform well in their roles and have access to professional development opportunities. Businesses should think that searching for new talent, onboarding new employees, and replacing those who have left can add up significantly but when you provide adequate training to the team, employee training retention increases.

LMS ROI -Increase in the retention rates
  • Maintenance costs

LMS ROI -Maintenance costs

You need to understand the running costs of an LMS to properly demonstrate accurate ROI. As mentioned earlier, cloud-based LMS systems offer a cost-effective solution. Organizations do not need to worry about installation, maintenance, and data storage costs. The only costs you need to consider are ongoing subscription costs which are predictable.

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Simple ROI LMS calculation

Here is a Simple ROI LMS Calculation

ROI LMS usually depends upon your organization’s goals. For instance, a university and a corporation will have two different approaches to teach or train. The university will regularly offer in-person lessons, while the corporation might do a once-a-year training event. Both may find their learners would benefit from online eLearning courses. This leads to very different cost savings when switching from one teaching method to the other. Using the above-mentioned factors, you can easily calculate ROI LMS as fast as a calculator.

(Costs + Top Line Revenue Benefits)/ Cost of the System = Return

Benefits Cost
Cost Savings $8,000
Top Line Revenue Benefits $8,000
Sum of Hard Savings and Benefits $16000

Minus cost of LMS: 3,588 (based on Core plan with 100 users)

Benefits Cost
Cost of the LMS 3,588
Return Before Investment 12,412

Return: 3.45 (345%)

The above calculation should give you all the information you need to create an effective business case for your LMS initiative.

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