What employers should consider when choosing an LMS

Christopher Pappas provides some advice for organisations navigating the learning management system market

Most companies on the hunt for a learning management system (LMS) underestimate the cost by nearly 60 per cent. Chalk it up to the vast array of choices and the multitude of pricing structures. Suffice it to say, choosing the right solution can be a daunting proposition.

Take the plight of one chief learning officer who reached out to me to conduct an LMS comparison. His company found it difficult to weigh the possibilities and determine a realistic price point, so he contacted me for LMS consulting help. He favoured a low-cost system with reporting capabilities and an intuitive user interface that seemed to meet his company’s goals, but he was in for a surprise.

Our work together revealed that the low-cost solution actually required add-on support services, online asset libraries, and other unforeseen costs. Comparing these details in the LMS software selection process is imperative for companies that want to find the best solution for their needs.

The price point of an LMS is based on several components, including its features, deployment type, number of users, and use case. When conducting an LMS comparison, remember that all systems develop, deploy, and track online training – so focus on the unique selling points that create trade-offs in functionality and cost.

Thankfully, selecting and budgeting for an LMS does not need to be painful. To get an accurate budget for the LMS that best serves your needs, it’s critical to understand four key factors:

Cloud-based solutions are on the rise

While traditional software systems are still available, they are being phased out in favour of cloud-based solutions. Companies are allocating a significant portion of their budgets to the cloud, which provides ease and accessibility.

 Cloud-based systems allow all employees to log in from anywhere at any time, and LMS vendors provide software updates and ongoing support. Many charge a monthly subscription fee, though some levy a flat fee based on user numbers. Be sure to account for additional learners, advanced support needs, and periodic price hikes.

Locally installed systems provide flexibility – for a fee

Another great option is an LMS hosted on your own servers. An annual licensing fee permits an unlimited number of users and allows you to customise the LMS platform, though LMS providers offer a permanent purchase of their software for a one-time fee. 

Add room in your e-learning budget for routine costs, including updates to maximise functionality and ongoing training for your learning and development team. You also pay for upgrades and add-ons, such as apps to integrate your CRM software or e-commerce plug-ins.

Open-source software has hidden costs

Open-source LMSs are touted as free platforms, but they carry hidden costs. After that free initial download, they often require upgrades to meet your needs and improve operations. This can also translate into payroll for a tech-savvy team to customise the tool to meet your needs.

Free or freemium software is a no-frills affair

Unlike open-source systems, these fully packaged solutions require no in-depth programming knowledge. The software is generally basic, lacking features or functions such as built-in authoring tools. Similar to open-source software, you must pay to upgrade or add on content. Free systems benefit your bottom line now, but extra fees can diminish your ROI if the standard platform fails to address your needs.

Many factors complicate LMS software selection, but simply ignoring this training trend isn't an option. Businesses are increasingly reliant on technology, as evidenced by an anticipated 19 per cent increase in IT budgets. In every industry, the right LMS could mean the difference between a competitive advantage and a liability.

Evaluate your needs, create a budget based on crucial features and requirements, and be sure to account for any overlooked fees. By considering every facet of your LMS situation and budgeting accordingly, you can select the best LMS software for your organisation without any major headaches.

Christopher Pappas is the founder of eLearning Industry. He can be found on LinkedIn and tweeting at @cpappas.

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