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Vania Hasegawa Jun 16, 20237 min read

6 ideas to calculate the ROI in LMS

Translation generated by an AI translation service

Learning Management Systems (LMS) have grown in popularity and have become essential to educational institutions, unions, and businesses in recent years. These learning institutions rely on their digital platforms to improve face-to-face, hybrid, and remote learning experiences. And, as with any new investment, it is important to clearly understand the return on investment. But how should it be measured?

Educational institutions, like other businesses, have the challenge of efficiently managing resources while providing high-quality services. Learning Management Systems (LMSs) help teachers to efficiently structure their courses, provide data to improve course performance, and give students the flexibility to access content from anywhere, at any time.

As schools invest more time and resources in LMSs, calculating the return on investment (ROI) allows them to make data-driven decisions to ensure continual development.

In this article, we will look at a few ways educational institutions can evaluate the ROI of a learning management system (LMS).

Where Should We Start?

If you already have an LMS or are considering adopting one, determine what aspects you want to analyse before you start calculating ROI and gathering numbers. Here are a few tips:

    • Consider the establishment's goals and KPIs in order to provide a strategic framework for LMS implementation, ensure success measurement, facilitate decision-making and accountability, drive continuous development, increase transparency with stakeholders, and enable ROI assessment.
    • Consider the implementation timeframe to minimize disruptions caused by implementing a new LMS or transitioning from one platform to the other. Allocate the necessary resources: testing, quality assurance and training staff to mention a few.

      Find out how Centria University of Applied Science and the University of South Denmark has successfully implemented itslearning.

    • Calculate the LMS learning curve for both staff and students. Not everyone will grasp the platform's functionality right away. Ensure that all staff, teachers and students receive adequate training and that teachers are introduced to the platform's benefits and are encouraged to take advantage of them rather than employing alternatives.
    • Consider piloting the LMS with a few courses to get people on board. Then touch base with department heads, teachers and end users to find out what worked and what challenges they had.
    • Consider aspects other than the bottom line to determine success, as an LMS can help boost teacher and student satisfaction, provide a sense of modernisation, save time, and improve the institution's reputation.

Finally, let’s talk about the Return on Investment

Focus Keyword

Measuring the return on investment ROI of an LMS allows administrators to prioritise school investments to meet strategic objectives and maximise returns. It also assists institutions in understanding the value provided by quantifying monetary gains relative to costs.

Once implemented, an LMS can provide cost benefits such as reduced travel and training expenses, increased scalability and resource reusability - which can correspond to time savings.

Keep in mind that ROI at educational institutions cannot be calculated in the same manner that it can at other companies. Education is more than simply numbers; it is a synthesis of information that results in learning and can motivate students to perform their best.

For this reason, while compiling the data into a report or presentation, keep in mind that each stakeholder will have a different point of view. For example, teachers might have opinions about usability and pedagogical structure, the IT team will likely focus on the implementation process and technical support, and the legal department will need to know all about GDPR compliance, etc.

6 Ways to Calculate ROI

If you want to take the first step towards analysing the ROI, start simply and refine the process when you have a better understanding of it. Here are five options for you to consider:

1. Timesaving

LMS platform facilitates collaboration, content storage and sharing, course maintenance and delivery, test sharing, etc. Everything is stored in a single platform, improving resource accessibility. This enables instructors to concentrate more on instructional activities, individualised student support, and cultivating meaningful learning experiences. Educators should use this opportunity and learn to collaborate even more.

      • Centralized Course Management like the Planner
      • Automated Grading and Feedback
      • Efficient Content Distribution
      • Online Assessments
      • Communication and Collaboration
      • Resource Sharing and Reuse
      • Reports

Smart tip: Consider how many hours teachers spend structuring courses and if collaboration amongst colleagues has risen. A survey can be used for this.

Extra tip: learn how MKC Training, a subsidiary company of MidKent College in the UK, experienced the implementation of itslearning.

2. Financial Savings:

If you already have an LMS at your school, it is important to evaluate all the costs surrounding the system – ideally before and after the implementation. The cost of an LMS can extend beyond just the cost of the platform and licenses to include maintenance, integration and so on, especially if you have a self-hosted LMS.

It is important to grasp the difference between a SaaS LMS and a self-hosted LMS.

A SaaS LMS is hosted and managed by a third-party provider and delivered via the Internet. Users access the LMS via a web browser rather than installing or maintaining software on their servers. Infrastructure, upgrades, security, and support are handled by the supplier – like itslearning, for example. And these updates are typically applied automatically, ensuring that users have access to the latest enhancements without any effort on their part.

A self-deployed or hosted LMS is installed and operated on the organization's own servers or hardware infrastructure – in this case, the school or university. The organisation is responsible for acquiring the necessary hardware, installing, configuring, and maintaining the LMS software. Updates, security, and support are also managed internally.

With a self-hosted LMS, organisations have greater control and customization possibilities, but they are also responsible for their operation and upkeep. They must manually download and install hardware or software onto devices. This will almost certainly necessitate the hiring of IT professionals.

In this scenario, it is important to remember that the institution will need dedicated employees and resources to manage the LMS, resulting in increased manual labour for your IT team, particularly if there are any technical concerns.

Smart tip: After implementing the LMS or before the start of the new school year, record the results and compare them to the following semesters or years. This will provide you with a clear picture of how much your institution has progressed.

3. Creating New Business Opportunities:

Schools and colleges that use an LMS may be able to establish new revenue opportunities such as remote learning courses, MOOCs, and so on. This could attract more students to your institution and improve your course portfolio, providing fresh knowledge to young students or investing in lifelong learning courses for adults.

Smart tip: compare one year to another. Check if new business opportunities were created, along with other positive impacts.

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4. Student Performance Data:

Before and after the adoption of an LMS, educational institutions can analyse student performance data. Comparing these statistics can reveal information about the LMS's effectiveness in enhancing learning outcomes. Here are several data points to consider:

      • Grades
      • Assessment Results
      • Rates of Completion

5. User Adoption and Engagement:

A significant indicator of the LMS's performance is the level of user adoption and engagement. Monitoring metrics with interactive aspects can aid in determining how much and how effectively students and teachers are using the system. Adoption and engagement at a high level suggest that the LMS is being used effectively and adding value to the educational institution. Here are several data points to consider:

      • Counts of Active Users
      • Frequency of login
      • Rates of Course Completion
      • Engagement

6. Employee and Student Satisfaction:

Collecting input from students and teachers via surveys can give qualitative data about the influence of the LMS on engagement and satisfaction. Create a satisfaction survey before and after implementing the LMS. You might focus on course satisfaction, course evaluation, accessibility, course format, and so on in the prior survey.

After calculating the ROI, I should...

Following the calculation of the ROI, it is useful to convey the findings to managers, executives, and employees, to demonstrate how the LMS creates value and contributes to achieving organisational goals. To demonstrate the quality of your work, use tools like presentations and newsletters, quotes.

This will help other departments discover and capitalise on development prospects. By understanding the financial impact of an LMS, organisations can align their investments with their long-term growth plans, make data-driven decisions, and secure the best potential return on investment.

If your school is considering implementing a new LMS system, contact our team of experts. They will be able to assist you map and analyse the savings and value opportunities based on your existing scenario and strategic goal, in addition to learning more about the platform.
Click here to reach our team