Building The LMS Business Case

LMS Business CaseBuilding the LMS business case has to include the total benefits of one LMS product versus another and not get bogged down solely on the total cost or the fascination with open source software as a function of cost. I realize this is an uphill battle given how easy it is to let the technology determine your LMS requirements and the predisposition to being budget focused in higher education.

I also realize that building an LMS business case that is balanced with revenues and hard dollar savings from projected outcomes and new efficiencies creates an accountability that might make many uncomfortable.

LMS Business Case Fundamentals

Sometimes words matter which is why LEARNING management system versus COURSE management system is an important distinction. The difference is in your orientation to the tool’s use being more to promote learning focused on the students or as a tool to promote courses focused on faculties’ administrative and delivery needs?

Determining where your organization falls on this distinction should be step one in creating your LMS business case since it is central to your drivers, whose needs are dominant, and how much weight you assign in your LMS RFP criteria. Simply consider the selection criteria differences if your needs are 80% Faculty oriented and 20% Student versus if they are 95/5%, or 50/50%.

Given the criticality of training and support in LMS effectiveness and utilization, this ratio is more than theoretical. When you have a user population of 1:20 (faculty:student) or greater the platform requiring the least training and support of your entire user base should factor heavily into the decision.

Barriers to LMS Adoption

Which LMS has the fewest barriers to adoption or increased utilization has to be accounted for. The dominant factor by most accounts is a function of how much training and support is required for the faculty.

Just to challenge your thinking on this, what if you knew most of your students used Moodle in high school ? Would being able to eliminate students’ learning curve almost entirely by not forcing them to learn a new LMS platform change your LMS business case? Your answer of course is indicative of your orientation of being student (learning) focused versus faculty (course) focused.

Technical Factors

More and more LMS RFP templates include checking for Section 508 compliance but fewer actually verify it in their reference checks or demos. Even fewer LMS RFP templates check for SCORM (Shareable Content Object Reference Model). Most LMS RFP templates do account for integration with SIS/ERP software but few go beyond that in contemplation of learning analytics or data mining.

Efficiency Gains

The LMS business case and LMS product comparisons must account for the efficiency gains for faculty and administration and not limit this examination to IT support requirements. This is the COURSE side of the LMS vs CMS ratio where presumably the features weighted so heavily in product selection criteria would simplify or automate many course management functions. This results in freeing up capacity for additional student load, course development, or other duties which can be quantified as soft dollar savings.

There are also hard dollar savings to be gotten from new efficiencies. The easiest, although not politically, is to increase class size by X number of students for every Y% gain in efficiency. So even a 3% gain in faculty productivity should translate in a corresponding increase or savings in load.

This would increase the margins per credit hour or raising the revenue dollars per faculty or course. Similar revenue and hard dollar savings benefits exist for scaling online offerings and course/curriculum development.

Educational Benefits

The LMS business case should also account for the LEARNING side of the LMS vs CMS issue. Here you quantify the benefits from the entire process chain beginning with opening enrollment criteria, increased retention and persistance, and increased graduation rates, and growing the alumni pool.

Quantifying the financials on these benefits should look at broadening the applicant pool, reducing recruitment costs, higher margins in advanced courses, increased graduation, and more donors. That doesn’t include soft dollar savings that should be quantified from improved institutional performance and the effects on rankings or accreditation.

And lets not forget to account for increases in tuition revenue and higher margins including changes in state formula funding.

But for the more initiated, the opportunity exists to link the LMS RFP selection criteria to your goals for creating dynamic and adaptive learning environments which can be personalized. This is also not that far from goals you may have for creating student centered learning environments or even knowledge centered, assessment centered, or community centered learning environments.

The point is to estimate and account for the value of all the claims being made for why you need an LMS or why product A is better than B.

Feature Benefits

As you consider the features and functions of various LMS products, it is important to link their use, or maturity, to outcomes which can be quantified in your LMS business case. So if Mobile LMS is important to you, you should work hard to establish a measurable benefit that can be cost justified in the form of engagement or communications and ultimately the outcomes.

Similarly, if student assessment, early alerting and retention capabilities are emphasized in your LMS RFP criteria then find a way to link them to projected results and quantify them. And so on for learning analytics, data mining, and adaptive learning features.

Transactional and Unitized Costs 

As you build your LMS business case consider going beyond TCO and ROI by telling the story of how the LMS will impact your transactional and unitized costs as a result of the projected administrative and educational gains. This is where you bring the LMS ROI into real perspective by expressing it in terms of incremental net gain or loss in revenue, margin, or expense on a per program or course basis or a per student basis.

All LMS Things Being Equal

The point of this post is to illustrate that all things LMS are not equal and by now you should have pretty good visibility into the real benefits from having an LMS to justify replacing it and selecting which one it is.

So your LMS business case should be developed accordingly so that you move beyond considering just cost and how much of your wish list is covered.

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