January 10, 2018

How to build the Business case for an LMS?

LMS Business Case

Buying a Learning Management System (LMS) is not something that you would do very often and with such high value purchases it is necessary to consider many factors when you want to get the gatekeepers in your company on board. Or perhaps you have a legacy LMS which doesn’t provide enough features and functionalities for your requirements such as enterprise systems integration, a mobile app, advanced reporting tools, gamification or social and collaborative learning features?

Whatever your LMS challenges are, in order to take the next step, you need to build your business case and make it sound and solid to secure the internal buy in and get the go ahead from your investors. With these simple and valuable guidelines that we have outlined below you can put together a strong case whether you are upgrading a legacy system or thinking of investing in an LMS for the first time.

#1 Clear structure

It is very important that you structure your business case in a clear and simple way so all the key data presented to the decision makers is easy to find and understand. Your company might already have a business case template, so by no means, use that and modify it according to the needs of your project. If you don’t have a blueprint to work with or if you are new to putting together business cases, here are a few pointers to set you in the right direction.

1. Give a clear description of the project including:

  • Objectives and Scope;
  • Alternative Solutions;
  • Risks involved in the proposed solution as well as the risks in not going ahead with the proposed solution;
  • Expected benefits in terms of cost and time savings, how will the LMS support your company’s strategic business goals (focusing on those of the stakeholders you are addressing), employee confidence and satisfaction, etc.

2. Financial Evaluation of the investment

  • Cost of the new solution based on different case scenarios. There’s no doubt that implementing an LMS will include considerable resources and expenditures so be upfront about it and look at all the options making sure you recommend the best one for your company;
  • Savings based on the solution - this is where you can really get the buy-in by clearly pointing out how the proposed solution can result in savings. Depending on your particular situation you can compare to existing face-to-face solutions and take into account travel and accommodation costs, trainer costs, time away from the job, etc.

#2 A Good Summary

Regardless of how well you structure your business case, you’ll probably end up with a document that’s at least 10-15 pages long. Considering how precious time is for your stakeholders, they often don’t have enough of it to go through such a lengthy document so you need to provide them with a concise executive summary of a couple of slides. This should contain your most important KPI’s such as Return on Investment (ROI), Net Present Value (NPV) and Internal Rate of Return (IRR). Of course this is just an indication of what’s important to most companies, but as a training developer you should be aware of what is critical for your particular department or organization and make sure to include it in your business case. Don’t forget to also summarize the key benefits which can include reduced training costs, increase in sales or improved output, reduced error rates and time savings. You can always add to the KPIs list what’s measured in your company or a benchmark that you’d like to compare to.

#3 The Right Help at the Right Time

Identifying the right champion for your project within your organization will help you with the investment approval. Make sure you work together with someone who knows the ins and outs of the system and can get your proposal on the right track to get endorsement. With the right stakeholder support you also need to set and stick to a reasonable and realistic timeline considering the usual decision-making bottlenecks, resource availability, implementation deadlines and so on.

Investing in a replacement LMS or in a brand new one is certainly not an easy task and it needs careful planning and organization. You will be asking for a considerable investment, therefore you will need the proof that it is all worthwhile.

Get in touch with us if you want to talk about your particular requirements. We have worked with many clients in helping them prepare the internal business case for an LMS so we will be happy to discuss your challenges and advise you based on our experience.

You may also find our blog post about How to sell the eLearning idea to your internal stakeholders useful. 

We would also like to hear about your own experience if you’ve already had to present a business case about an LMS, so don’t hesitate to add your contribution and share with our readers by leaving a comment below.

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