From a strategic perspective, an organisation wants to align its learning and development with its goals. It wants to analyse and close skills gaps to meet its business plan. It also wants to foster an atmosphere where workers believe that they’re important to the organisation and where the organisation is seen to have a commitment to develop its workers’ knowledge and skills.
Where it achieves these things, performance improves and the organisation gains a competitive advantage.
From an operational point of view, managers want to do and achieve more with less – working faster, better and/or quicker. They want to retain and develop their employees as well as address any regulatory requirements. This should result in increasing efficiency and productivity, reduced risk and increased customer satisfaction.
Chief executive officers want:
• Revenue generation
• Customer retention
• Increasing market share
• Competitive advantage
• Reduced time to market
• A lower number of ‘product recalls’
• Reduced risk
• Reduced costs
It’s helpful to align the organisation’s learning management system (LMS) to one or more of these factors. For example, you could show that ‘doing things better’ because workers are better trained will help retain customers and, by spending less time away from their desks doing training/ learning, the workers can serve more customers and increase their satisfaction with the organisation and its products.
The key is to align the learning business plan to the business’ goals – otherwise the business won’t put any money into an LMS.
But which comes first: the system or the content? Any system – such as an LMS, learning content management system (LCMS) or learning experience platform (LXP) – without learning content is like having air traffic control without aeroplanes, filing cabinets without paper, bookshelves without books or a fully fitted kitchen without any knowledge of how to cook.
Until you have learning content and people using it to learn things, there’s no point in trying to manage it.
LMS return on investment
Agreeing an accurate return on investment (ROI) from an LMS is difficult, principally because it’s impossible to measure the LMS’s ROI in isolation from every other factor.
There are only three ways to make money – and realise a positive ROI. You can buy things for less; sell them for more – or steal them. So, is learning content ever going to produce an ROI? Is ‘management’ going to bring an ROI? Is there even a breakeven point for ‘management’? Management is indivisible and, like premises, is a fixed cost of operating. Its costs can’t be apportioned fairly to different aspects of the business, such as learning.
An LMS is only ever part of making your organisation operate efficiently and effectively. It is not the entire solution. However, if you take any one of the seven factors that impact on a business – sales force productivity; customer and partner training; developing and retaining employees; regulatory compliance; enterprise software implementations; quality initiatives, and strategic communications – an LMS should be shown to pay for itself within a year.
Moreover, having bought an LMS, how do you decide whether it was money well spent? Do you evaluate this in terms of the cost per user or the cost per lesson? How do you measure the ROI? And do you merely want the system to ‘break even’ in terms of an ROI or to do more? Maybe you should look at the number of learning events in the system rather than the number of users?
If you have, say, 500 users doing ten learning events a day, you can manage this without having recourse to a ‘system’ – but 500 users doing thousands of learning events each day will be unmanageable without a system.
Acquiring a ‘system’
A typical decision process to acquire a management system involves having the evaluation of the requirement, a request for information (RFI) and a request for a quotation (RFQ). You go to shows, get brochures and, mainly, do research via the internet, reading articles such as this one.
If you ask vendors – and every one of them is always a ‘leader in the field’ – they’ll say that you should buy their product. But vendors are really saying, ‘buy my product because it’s the only one I have’, rather than ‘buy my product because it’s the best’. Of course, any system is the best there is if it fits exactly with what you want it to do.
You should go to the market with an RFI; yet many buyers make the mistake of going for an RFQ first. Once you have the information, you need to match it to your requirements and then – once you’ve found a product that matches your requirements – go for an RFQ.
The question is, which vendor do you trust?
There are four types of vendor in this market: those which are product-led; consultancy-led; ‘manufacturer-offered’ and ‘independent-offered’. Each will have a different ‘angle’ and it’s worth bearing that angle in mind when dealing with each of them.
You could make your buying decision on how many industry awards these vendors have won. However, you need to remember that, in this field, industry awards go to those who propose themselves for them – and other ‘league tables’ are based on revenue. This means that the most expensive companies are at the top!
You need to decide whether the most expensive companies are the best and whether the best instructional designer is the one with ‘the most colours in the box’.
Top ten purchasing mistakes
The top ten purchasing mistakes in the learning sector are:
- Skirting senior management until it’s too late (and so failing to get management ‘buy in’ to the project)
- Failing to spell out exactly what you need the management system to do.
- Comparing ‘apples’ and ‘oranges’.
- Excluding the in-house IT department until it’s too late.
- Focusing on price rather than value – the ROI focuses on price, whereas you should be asking what value is attached to the project and, so, assess the ‘value return’, not the return on price.
- Overlooking scalability.
- Ignoring LMS interoperability – in other words, falling into the trap of having more than one LMS in your organisation and the systems not communicating with each other, thus reducing the value of having these LMSs.
- The vendor’s track record – you should ask to speak to a vendor’s dissatisfied customers as well as their satisfied ones.
- Automating dated business processes – you need to understand whether you’re merely automating what already exists or are introducing a system that will enable the organisation to make progress.
A checklist for getting the ‘right’ management system for your organisation is:
- Decide what’s available to you.
- Involve everyone.
- Learn the industry jargon.
- Speak to those who’ve implemented other systems and find out what benefit they expected – and what they actually received.
- Design your own RFI. Ask yourself: ‘does this system already do what I want or does it have to be created? If it has to be created, you’re at ‘version 1.0’ again and you would be right to become cautious.
- Compare like with like.
- Create your own RFQ.
- Speak to the clients (those who’ll actually be using the system).
- Re-evaluate from the top down – then ask yourself, ‘is this the right thing for us?’ If it is, sign the cheque.
About Bob Little
Having graduated from the University of Wales with a BSc in economics, Bob Little became a journalist and editor specialising in the corporate training/ learning sector. In May 1990, having founded his own public relations business, he was introduced to what became the corporate online learning technologies industry and has worked in this sector – worldwide – ever since as a writer, commentator and publicist.
Bob has advised many organisations around the world – ranging from niche companies to large, multi-national enterprises, including BBC Worldwide (UK), the Tata Group (India) and Lattanzio Group (Italy). He has spoken at conferences on corporate learning in the UK, the USA, Croatia, the Czech Republic and Germany. He has also chaired corporate learning-related conferences in the UK, the USA, Croatia, Germany and Australia. His current clients include eCom Learning Solutions (https://ecomlearningsolutions.com/). eCom, which produces the eNetLearn LMS, creates innovative learning solutions – aimed at increasing learning engagement and driving productivity – to help organisations achieve their goals.