The Business Case for Corporate Learning Management Systems

Leaders at organizations frequently hear about the need for training and learning programs to help employees be more successful at their jobs by gaining a higher level of skill and improved productivity, leading to better job satisfaction and employee motivation. A Learning Management System (LMS) can help solve this problem.

Figure 1: An Overview of an LMS

A corporate (LMS) is used to deliver training materials and track learning progress in a corporate environment. An LMS broadly covers four functions:

1. Improve Learner Experiences: Learner experience can improve via multiple content types, interactivity, accessibility standards, and discoverability.
2. Manage Learning Materials: An LMS should easily add, import, or aggregate content and organize it into courses and learning paths. Content access using strategies like microlearning and standards like LTI, SCORM, and xAPI assist with creating a learner-centric environment.
3. Generate Learning Outcomes: Most LMSs can collect metrics related to learner behaviors and engagement. These metrics can be analyzed to create insights and outcomes to guide learners through their learning journey.
4. Track Content Availability and Quality: Some LMSs support advanced functions like automatic language translation to improve reach and gather metrics that can lead to content improvements as observed via learner behaviors.

Organizations tend to create and accumulate a significant amount of collateral over time, which poses a challenge with maintenance and updates of the collateral when stored on a file system or even on a wiki. The LMS is a one-stop-shop to access content in the organization in a structured manner, enabling learners to browse the collateral effectively. The structured collateral can be enhanced with interactive elements to create engaging experiences, and notifications about content availability enable learners, instructors, and evangelists to get a 360-degree view of the learning ecosystem.

Organizations can expect the following benefits by deploying an LMS:

• Reduce attrition and churn rates for customers and partners by 5% to 15%.
• Achieve compliance of up to 100% for regulatory requirements of employees.
• Present the most current version for up to 100% of the content.
• Reduce learning and development costs by up to 50%
• Improve click-through rates of recommended content by up to 25%

Over the years, organizations have introduced several platforms for customer management, enterprise resources, human resources, etc. These platforms addressed several scenarios with workflow automation in their respective domains. The LMS too introduces workflow automation for several learning-related scenarios for upskilling, onboarding, and compliance.

The core scenarios of use that an LMS assists with include:

• Training: Coach learners for professional development, onboarding, and compliance.
• Content Discovery: Discovery of relevant courses and learning content for learners.
• Learning Outcomes: Generate learning outcomes like insights, dashboards, and recommendations using learner behaviors.
• Learning Strategies: Deliver learning content using appropriate learning strategies.
• Administration: Administer entities managed within the LMS and configuring integrations.

The illustration below highlights more details for each of these core scenarios:

Figure 2: Common Scenarios of Use

Implementing a learning initiative in an organization can be addressed in multiple ways ranging from home-grown and custom solutions to using a specialized LMS or an embedded learning capability as part of another platform already deployed in the organization. Alternatives to an LMS deployment include:

• Home-grown solution using a Wiki and plug-ins to present content from a storage location. The plug-ins help with content rendering and version control but introduce content management, organization, and discovery challenges.
• Custom solution built on top of a website/intranet site as an extension or using plug-ins for the content management system.
• Built-in LMS in a Human Capital Management (HCM) platform, which provides features on par with a third-party LMS for internal users.

Costs and risks must be factored in when implementing an LMS. From a cost standpoint, organizations may expect to spend anywhere from $650 to $2,500 per month for 150 users. However, the costs vary based on the pricing model.

Core Costs – Pricing Models:

• Pay per active user ($3 to $30 per month)
• Pay per registered user ($3 to $30 per month)
• Pay per user ($3 to $5 per month)
• Pay per course ($3 to $10 per credit. Typical course might be three credits)
• Perpetual or term license/subscription ($300 to $35,000)
• Open Source ($0)

Organizations can expect to incur a one-time implementation fee, as well as content costs for courses purchased through a marketplace and add-on module costs for content enhancements. Finally, there are training session fees for administrators and business users and maintenance costs for developing integrations and enhancements.

With regard to risk, the largest factor to consider is the deployment model: on-premises or in the cloud. For cloud deployments, the risk is generally quite low, while for on-premises deployments it is moderate. Key risk considerations break out as follows:

On-Premises Deployment

• Security practices: Infrastructure setup access and monitoring.
• Updates: Managing version upgrades and setting up a sandbox environment.
• Data privacy: Strategies to manage data privacy and share data for integrations.
• Scalability: Operational challenges like auto-scaling for dynamic workloads and capital expenditures for storage costs related to growing content libraries (videos).

Risk Considerations for Cloud Deployment

Security practices: Vendor practices for infrastructure monitoring, data privacy protection, and application level security.
Costs: Understand variable costs for add-ons or subscribing to new content.
Integrations: Understand data sharing needs with integration partners.

The path to adopting a SaaS platform for an LMS should be pretty quick. Here is a general plan to see you through the first three months of a deployment.

30 Days: Prepare
Form a cross-functional team representing stakeholders from across the organization and identify third-party content sources, scenarios, and potential LMS vendors to evaluate LMS vendors for a proof of concept (POC) .

60 Days: Evaluate
Create a focus group for a POC and conduct vendor trials. Hire or nominate a learning administrator to configure and set up the system and a learning evangelist to promote the learning initiative within focus groups during the pilot. A SaaS solution should be favored unless an on-premises solution is required for governance purposes.

90 Days: Implement
Purchase the LMS and conduct a pilot with focus groups, followed by a phased organization-wide rollout. Work with subject matter experts to add training materials and surveys for gathering feedback about the content and the learning initiative rollout. Set up timelines and plans for integrations with third-party systems and content aggregators and to hire instructional technologists for managing learning programs.