How do you calculate the ROI on a Learning Management System (LMS)?

If you are a manger of training, development and talent you are already a believer that a Learning Management System (LMS) will help your organization cut costs or improve profits. However, how do you show that return-on-investment (ROI) to your executive leadership.

A good LMS will provide you with the metrics you need in order to demonstrate an ROI. Below are just some of the ways to measure the ROI of your LMS:

• Lower costs of managing training schedules (e.g. fewer hours spent managing training)
• Decreased travel costs with eLearning and virtual classrooms
• Increased revenues due to speeding employee time-to-proficiency (e.g. Sales professionals learn products faster, start selling faster & more effectively)
• Improve time-to-market training of sales professionals and partners
• Decreased support incidents and costs from well trained employees or customers
• Increased revenues due to higher customer satisfaction (e.g. faster, better trained employees provide better customer service)
• Reduced financial risks and costs of negligent regulatory compliance training activities
• Decreased employee turnover costs by providing better training and development
• Reducing IT hardware and support costs by utilizing a SaaS based Learning Management System compared to internally managed software