1. Upfront Costs
If you’re purchasing your LMS outright, you can expect to pay licensing fees upfront. However, even if you are opting for a monthly or annual subscription, you still need to consider all the preparation costs involved. For example, auditing your current online training resources to get them ready for the transition or even the time it takes to research the available options and find the ideal LMS that aligns with your objectives. For example, the LMS vendor may offer free trial and demos but you have to devote payroll hours testing each LMS platform to try out the features.
2. LMS Training
Even the most user-friendly tools require some level of training. Especially if your L&D team is unfamiliar with the LMS platform or they've never used an LMS to deploy and track online training in the past. Some LMS vendors provide free online training tutorials or other online resources, while others offer one-on-one support from an IT specialist who walks you through all the key features. For this reason, it's important to ask about the learning curve in advance, as well as which support options the LMS vendor includes in the package.
Top tip: Free or open source LMSs may be tempting. However, you should keep in mind that they are usually less intuitive. As such, they require programming knowledge and technical experience to take full advantage of the features.
3. Monthly Or Annual Licensing Fees
Some LMS platforms require a monthly or annual license renewal fee. If you let the license lapse, you may be denied access to the LMS platform or forfeit certain privileges. LMS vendors may even offer different subscription packages. For instance, their bronze package is ideal for a particular number of users and offers the most basic features. This is the ideal approach for smaller organizations who want to test the LMS waters before diving into a long-term contract that provides more advanced options.
4. Compatible eLearning Authoring Tools
You already have eLearning authoring tools on hand. However, they may not be compatible with your new LMS. In which case, you'll have to purchase replacement software to create effective online training materials that can be uploaded to the LMS. Alternatively, you may simply want to purchase additional rapid eLearning authoring tools to speed up the online training development process. All of these items should be accounted for in your LMS budget.
5. Pay-Per-User/Learner Fee
Another LMS pricing plan to consider is the pay-per-user or learner fee. This option allows you to pay only for active users, which is a cost-effective choice for organizations which are deploying online training on a smaller scale. Bear in mind that some LMS vendors do have a user minimum. For example, you must have at least 50 active users at all times. Another option is the pay-per-course or module pricing plan. In this instance, you pay for the number of online training resources you upload to the LMS.
6. Upgrades And Add-Ons
If you've opted for a more basic LMS package, then you may have to factor in the costs of upgrades and add-ons, especially as your online training needs evolve and you require a more robust, flexible LMS. For example, you realize that you require more advanced support services or reporting capabilities in order to receive customized LMS reports that focus on specific online training problem areas.
7. Learning And Development Team Payroll
No LMS budget is complete without the all-important human element. You need to total all the payroll hours involved in the LMS process, from selecting the perfect tool to deploying and monitoring the online training content. The LMS is only as effective as the people using it. Those people need time to master the tool and then use all of their skills and talents to put your online training plan into action with the help of the LMS. It's best to overestimate the number of payroll hours you'll need for each task. Then you can use the "leftover" funds for other aspects of your online training development, such as collecting eLearning feedback from your corporate learners in order to enhance the benefits of your online training course.
8. Online Training Development Costs
You may have chosen a robust LMS, but it won't be able to develop and deploy online training courses on its own. Not yet anyway. That means you'll have to factor online training course creation costs into your LMS budget, as well. This includes a broad range of expenses, from curating images and graphics to use in your eLearning course design, to hiring Subject Matter Experts and Instructional Designers to develop meaningful online training experiences that align with your organizational goals.
9. Ongoing Maintenance
Learning Management Systems require continual maintenance. You must update your online training content to keep it fresh and incorporate new multimedia to stay on the cutting edge. Furthermore, the LMS may require software updates from time to time. This ongoing maintenance involves payroll hours and in some cases unexpected fees. As such, it's always best to leave a buffer in your online training budget for LMS upkeep.
Creating a realistic LMS budget allows you to allocate your resources more effectively and choose the LMS platform that suits your needs. The key is to account for all of the hidden fees, payroll hours, and time involved in the process. For example, the hours you'll have to devote to training your employees so that they can use the LMS to their advantage.
Are you short on time, but still need to find the best LMS for your budget? Read the article 5 Easy Steps To Get A Learning Management System Quote Tailored To Your Needs In Less Than 3 Minutes to guide you through 5 easy steps to get an LMS quote tailored to your needs in less than 3 minutes.
About Christopher Pappas
Christopher Pappas is founder of The eLearning Industry’s Network, which is the largest online community of professionals involved in the eLearning Industry. Christopher holds an MBA, and an MEd (Learning Design) from BGSU. eLearning Blogger | EduTechpreneur | eLearning Analyst | Speaker | Social Media Addict