You’re all for investing in a learning management system (LMS), but your executive team is a skeptical crew. They may see an LMS as:
- Not an investment but a necessary expense for responding to compliance requirements;
- A nice-to-have perk to dangle in front of potential recruits, not a need-to-have support for your business goals;
- A shiny new fun tool in educational technology, but its business impact and ROI are vague, to say the least.
To overcome these perceptions, you’ll need to build a business case that will help your C-suite and other key stakeholders see how an LMS is a Learning & Development (L&D) platform that can positively transform the way you do business.
The best way to do that is to review your organization’s goals and challenges and then collect data to show how an LMS can:
- Ease or solve those challenges;
- Contribute to growth;
- Help the organization attain key metrics.
The following four steps provide you with a path for collecting that data.
1. Ensure that your L&D strategy is aligned with your organization’s key objectives
No company of any size has escaped the consequences of a tightening market for talent and the rising cost of staff turnover, recruiting, and training.
In fact, according to the Conference Board’s global survey of executives, the C-suite ranks attracting and recruiting talent as the #1 internal concern for 2020.
Your LMS can reduce the impact of talent issues as well as help improve productivity. Consider these scenarios:
Want to attract millennials?
According to Gallup, 87% of millennials rate “professional or career growth and development opportunities” as important in a job.
Want more engaged employees who stay longer?
Studies show that career development opportunities can lead to higher engagement by your people.
According to an IBM study, employees who don’t feel they can attain their goals in an organization are 12 times more likely to consider leaving compared to employees who feel they can get to their goals. New employees are 30 times more likely to consider leaving.
When new hires in this study get training, 62% of them say they intend to stay, compared to 21% who don’t get training ⎯⎯ that’s nearly a 300% increase in retention.
2. Total up all the hard costs your LMS will save
Compared to traditional training, the right LMS will deliver savings by helping you:
- Cut instructor and classroom fees, reduce costs to create and update teaching content as well as expenses relating to travel, accommodation, and entertainment for employees and instructors.
- Minimize time away from work. A mobile-responsive LMS enables learners to learn on any mobile device at any time.
- Reduce duplication of instruction because all training comes from one central hub, and that training is uniform for all learners.
- Shortening overall training time by 40%-60%, compared to conventional in-class instruction. When formal training programs are supported by an LMS, learning retention can improve by 25%-60%.
In your business case, do include the savings you’ll gain by retaining new hires and regular employees due to your L&D program.
What’s more, the right LMS will streamline the processes of managing, enrolling, and monitoring your L&D activities.
For example, if your LMS is an integrated all-in-one platform with state-of-the-art automation, you’ll liberate your team from many of the repetitive tasks of managing instructional activities and products.
Moreover, it’ll be a cinch to assign courses to your team or invite them to follow some. Through handy dashboards, you’ll be able to track progress and compliance at a glance.
Save on compliance
If complying with industry performance standards is a major business concern, do add compliance to your business case. Reducing the risk, cost, and penalties of non-compliance can add up to significant savings.
The right LMS can cost-efficiently help train your people, track their progress, provide the right support at the right time, and award certifications.
When you can cost-efficiently keep your people complying with standards, what do your savings total? How much more productive will your managers be if they can easily track the progress of your team on their compliance journey?
All these cost-savings (and the resulting improvements in productivity) need to be included in your business case.
3. Project what revenues you’ll gain
As part of your case, include answers to questions such as these:
- With the LMS giving employees more time at their tasks, what revenues will that bring to your organization?
- When your people in sales, sales support, or customer service can stay more quickly up-to-date on your products, solutions, and market research, how will this new knowledge impact your revenues?
- Will you close sales faster or reduce the time to resolve issues?
- Will your communications campaigns be more consistent in their messaging if all your marketing team gets on the same page easily and quickly?
Organizations that truly focus on learning and use educational technology benefit from improvements, on average, across numerous functions, like the following:
- +9% in staff satisfaction/engagement
- +24% in the ability to change procedures or products
- +14% in improved productivity through learning interventions
- +17% in customer satisfaction
- 12% reduction in time to competence
- 22% reduction in delivery time.
Furthermore, the right LMS can make a meaningful contribution to your goals when you are:
- Launching a new product or implementing new processes Training your team efficiently and flexibly will reduce your time-to-market and boost productivity.
- Merging with, or acquiring, another company
Get all your people effectively on the same page about the new culture and ways of doing.
- Helping managers adapt to an economic downturn by coaching them on change mastery, productivity, and leadership skills.
Train managers to boost their adaptability.
4. Calculate your ROI
In this discussion of the data to collect for your business case, we took a big-picture approach.
That’s because your LMS will impact the whole organization. You’re going to attract more employees, keep them longer, cut numerous in-class training costs, and generally improve the productivity of your team in a broad range of roles.
When you do your ROI calculation, you’ll have to include, of course, the costs of your LMS system. If you work with an LMS vendor supporting a mobile-ready, cloud-based platform, you won’t have to spend any money on IT hardware, support, and on-going platform maintenance. Those cost-savings can quickly add up.
So when you do your number-crunching, what do the results look like? Do they show exciting potential for benefiting your bottom line?
Most likely, those numbers will show that an LMS is an investment that positively contributes to growth, productivity, and happier talent.
To learn more about the positive business impact an LMS can have on your business, connect with us today.