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Proving LMS ROI: Is an LMS a worthy investment?

This post has been updated on October 23 2018.

A learning management system is a complex software that is supposed to support an educational institution in achieving its scope: that of educating students. To some extent, an LMS is the most important part of the technological side of education today.

Online courses support the learning and teaching needs in all major learning environments: traditional, or face-to-face, online, and of course, blended. Teachers can create and deliver courses through an LMS, they can assess students' learning, and they can use data to identify learning patterns and offer personalized feedback and support to each student.

Undoubtedly, an LMS can help educational institutions achieve their academic plans, cut costs, and even improve profit. But when it comes to proving that including an LMS in the educational strategy — or adopting a new one — is a worthy investment, things tend to get down a slippery slope.

Why is it so hard to prove the ROI of an LMS?

Reasons are plenty, and they are specific to each organization. There simply isn't a perfect recipe to prove and LMS return on investment; there are just too many factors involved.

If you're in the position to justify the acquisition of a new LMS for your school or university, you must find the right recipe that will meet the needs of your organization. That's the only way all decision makers will be convinced.

Easier said than done, I know.

But don't despair. You might have a lot of work to do, but you don't have to do it all on your own. Here are some tips that might help you on your journey to prove the ROI of a new institutional LMS:

Meet everyone

First things first: do your research. As I said, you're not alone. You won't be using the new LMS all by yourself, so why put the whole burden of taking such an important decision on your shoulders only? Some people know things that you don't, and others know other things. That's the point of a team — to work together and make all the knowledge bubble up to surface.

Meet everyone that will be affected by the new LMS and ask them questions. Meet the higher-ups in the organization and ask about their visions and expectations. Meet the IT folks and ask about all technical aspects involved. Meet the teachers and find out their needs. Meet the students and take the pulse of the academic body. Teachers and students will use the system the most, so their input is super important.

The point is to gather as much knowledge and data about what it means to implement and manage a new institutional LMS.

Don't worry if everything seems messy at this point. The next step is to...

Sort things out

Maybe a spreadsheet can help with this. Based on the information from all stakeholders, things could be sorted into three big categories:

Needs, or what the LMS must absolutely, unequivocally do or have. For instance, a clean infrastructure, nice visual elements, powerful analytics, or integration with other specific software.

Wants, or things that are a bit less important, but could still weigh on the final decision, like an extended tech support.

Wishes, or things that are simply nice to have: a spellchecker, a translation tool, or a terminology-control one; it all depends on your organization's specific needs.

Once the whole picture starts to get clearer, you need to...

Set SMART objectives

This may seem easy, but it may be the most hard thing to do. SMART stands for specific, measurable, achievable, relevant, and time-bound. If the objectives you set don't meet all these requirements, you'll inevitable get in a sticky situation sooner or later and will have problems demonstrating the LMS ROI.

It's hard to measure school success, or the efficiency of learning materials, or all teaching techniques. Which variables should be the most relevant? Will the numbers actually mirror the learning reality?

The answers to these questions sometimes hide in plain sight in the data you gathered; sometimes, they just hide. Take your Sherlock magnifying glass, meet people again, and pin down every SMART objective.

Then, you'll have to roll up your sleeves and...

Dive deep into data

Make predictions based on the data and objectives, and start doing the math: what your institution needs, and how much it can cost; what would be nice to have, and how much it could add up.

You might find that the course development for online education is more expensive than for traditional classes. Also, almost certainly, the teachers, administrators, and users will need training on how to use the new software. Depending on their resistance to change, the need for training will be bigger, or smaller, and so will be the related costs.

At the same time, you might find a causal connection between a great analytics tool, the improvement of learning materials, higher engagement rate, and a better student performance. You could even go a step further and connect this to higher graduation rates, and keeping the good reputation of your educational institution.

Don't forget to connect everything with numbers, as you...

Draw the line and repeat

It is said that numbers don't lie, so if you back all your findings with figures, it will be easier to spot the impact of a new LMS over different aspects related to your school or university.

Time is your ally. If you continue to measure your targeted LMS variables after the implementation, your next report will only have to focus on improvements, rather that convincing people that the institutional learning management system was a worthy investment.

What was the biggest challenge you encountered while calculating the ROI of your LMS? How did you manage to overcome it? Please share your experiences in the comments section.

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