How much does an LMS cost?
Why good planning saves time and money when investing in a learning management system
Who actually needs a learning management system (LMS)? What should you consider in your planning? Above all: How much does an LMS cost?
It is questions like these that many decision-makers are looking at when seeking to professionalise and digitise learning in their company. That is reason enough to get to the bottom of it all.
If you ask a real estate agent how much a house costs in general, they will likely roll their eyes at you and bombard you with a number of questions: What location are you looking at? How many rooms? What size? With or without a garden? Are you looking to self-build and be actively involved, or would you prefer a turnkey house? Solid construction or prefab? How do you want it finished and furnished? Laminate or wooden flooring?
There is a never-ending stream of questions needing clarification. As you can see, quoting costs without considering the parameters is not reasonable or tenable.
The same applies to learning management systems. As LMS expert at imc learning, Bernd Heischmann helps customers find answers to such questions, and ensures that the chosen LMS maps all requested scenarios and meets the (future) requirements. It pays to remember, that miscalculations and unnecessary changes after implementations are far more expensive than an investment based on a thorough needs analysis.
But one thing at a time: We asked Bernd about the most common questions relating to LMS costs and his tips for implementation.
Hello Bernd! First tell us, what contributes to LMS costing?
You are always looking at one-off costs and recurrent costs. One-off costs include things like implementing a customised configuration or LMS adjustment. Then you need to link other systems. Similar to a house, the planning, design and set-up of an LMS also needs to be tailored to the user so that their needs are met.
Especially in the planning phase, there are often enormous differences between different projects. In many cases, an LMS with an extensive feature set can be used “as is” and configurations are limited to a custom set-up.
If necessary, modules can be added. However, many customers want their LMS to be 100% tailored to their specific requirements. In that case, it’s worth looking at customising the system. Of course, that is more expensive than implementing an LMS in line with the existing system standard.
It is also important to remember that the “interior design” of an LMS is an added cost – for things like creating attractive learning content.
A software-as-a-service (SaaS) solution also involves recurrent fees. Typically, usage fees for such an all-in-one package of system provision and cloud hosting are charged per user. Yet, even with an alternative on-premises solution where the LMS is hosted in-house, software maintenance and support represent ongoing expenditures and hosting costs are incurred in addition to the one-off licence fees.
How big does a company need to be for an LMS to pay off?
An LMS can be a worthwhile investment for companies of any size – from SMEs to large corporations. It just depends on how it is used for what purpose. For instance, many of our customers not only train their own employees, but also their customers and partners. This helps them retain existing customers and partners, increase loyalty and attract new customers.
Many create a business model whereby they offer targeted e-learning courses in their system to third parties for a fee. The LMS then pays for itself very quickly.
We should also remember that professional development has become a major focus for employees and applicants. A company can no longer get away with neglecting training for their employees. Regular up-to-date professional development is no longer considered an optional benefit, but an integral part of a modern corporate culture that should be expected.
How long does it take to roll out a learning management system?
The technical implementation of an LMS without custom programming or sophisticated interfaces takes roughly three months. Of course, this can vary depending on the scope of the project.
Then, you also need to factor in the time to select a suitable and viable LMS and develop an effective concept for introducing e-learning in the company. Costs can quickly explode if suitability issues are only detected after implementation, or the selected system fails to evolve with the company and becomes obsolete after only a few years.
What are your top tips for a successful rollout?
As stated earlier, careful planning is absolutely crucial. Anything you miss in the beginning could turn into a major expense later on. I would therefore advise thinking carefully about future plans and other potential ways to leverage the system. If add-ons and extensions are considered from the start, a modular system that is easy to upgrade might be the answer.
Modern LMS have many functions, but different companies need different feature sets. With a modular system, the functional scope needed at a given time can be selected, limiting costs. As requirements change, additional features can be added one by one.
Stakeholder management is another important aspect. An LMS rarely involves just a single department. It usually affects the entire company. It is important to get the buy-in of key decision-makers. Typically, you are looking at IT, Personnel Development and L&D, but you might also want to consult Sales and the Works Council.
My final tip: It is vital that sufficient relevant content is available, and that you start off with excellent learning content. When the first learners start using the system, it is an absolute must the learning content they find there is exciting.
Investing in a small number of flagship projects that really inspire your learners is well worth the effort. First impressions count, and a bad impression is hard to rectify. Among our customers, the current trend for flagship projects involves learning games in 2D or 3D environments that allow learners to explore specific worlds. These look and feel nothing like traditional e-learning courses and create a unique atmosphere. You can also choose to create your own learning content, leverage content libraries or purchase off-the-shelf learning content. Simply remember that making a good first impression is key to wide-spread acceptance of the system.
Thank you very much!
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More about our LMS
If you would like to learn more about imc's Learning Management System, check here for more information.
I have been working in the Marketing & Communication Team at imc since March 2019.
Communication, creative content and social media are my passion. "KISS - Keep it short and simple" is my credo.
To explain complex content in an understandable way and thus make the topic of e-Learning accessible to everyone is an exciting challenge every day.
Privately I love to read, play poker and travel a lot.
I am always happy to receive feedback or suggestions.