Steps to calculate ROI from your LMS

Viren Kapadia August 2, 2021
Steps to calculate ROI from your LMS

A Learning Management System is an essential tool for these days as eLearning is becoming an inevitable part of life. With the growing demand for online training programs, the popularity of LMS is also touching new heights in recent years.

An LMS needs significant investment in every company, and therefore, it is required to evaluate LMS returns. Let's have a look at the stepwise guide to calculate ROI for your LMS

1. Implementing a time-saving training strategy:

In the era of digitalization, as the advancement of technologies is growing very fast, everyone is becoming attracted to learn through an online platform. This is a means of providing them with updated study materials, and it also reduces the cost of transportation.

An employee's time is a precious thing for an LMS and stands at the top of the priority list. Employees intend to access online training modules as per their availability of time. This helps in reducing the training days that could take weeks or months to be finished. It also helps to minimize the paperwork that is usually a time-consuming activity for any training module.

Online training schedules also help manage the efficiency of the data resources and generate an eLearning assessment for the employees based on their skills. They can bring the results in a shorter span with a faster approach yet appropriate proficiency.

2. Reviewing previous expenses:

Whether in an LMS, the cost of transportation for the trainers and employees, the rent for training centers, or printed study materials cut down short than a traditional training module, there is a need to evaluate some other expenses.

One of the best advantages offered by an LMS is that this system provides more efficiency in maintaining compliance. The system is keen to keep records, and the chances of non-compliance penalties get eliminated by the training audit.

When you are starting to calculate the ROI in a Learning Management System, you need to start with reviewing the previous L&D teams. It's also required to determine the cost of the traditional training schedule and check the expense sheets. Then, it would help if you subtracted the other expenses necessary for the case of conventional training like printing a certain number of study materials, rent of the training site, etc.

3. Employee retention rates:

In a company, employees are more inclined to access professional development resources as they help to expand their knowledge and keep them up to date. When an employee leaves the company, it affects growth. Employee turnover impacts the increment of the cost for conducting new training classes and orientation programs. A newly appointed employee is more like a trainee who needs ample time to gather experience for the work field. But, an experienced employee is more efficient than the trainee as he is well versed with all the technicalities beforehand. As a result, they can invest more energy and work with more efficiency.

An LMS helps in building a talent base for the company. High performance in the work culture helps to cultivate a positive attitude and motivation in the work process. Additionally, an LMS can generate a certificate of achievement to acknowledge the employees' hard work and dedication. This will further help to inspire them to work with a high level of energy and develop new skills.

4. Considering compatibility:

Sometimes a situation arises in an LMS when the new model does not fit compatible with the current tools or support the available features. Another point of concern is the cost of data integration and gathering valuable resources. It is required to evaluate how much time it needs to migrate the existing model to the new system with all the previously loaded databases and useful resources. Sometimes several additional tools and expert team members are required to cope up with this situation and install the new set-up properly. So, it is always advisable to plan carefully, keeping all the pointers in mind, and then choose to act accordingly.

5. Determining the learning curve:

In the field of eLearning, it's needed to stay updated with the recent trends in the learning structure. The L&D team must be equipped with the latest technologies and well versed with the new techniques. When an LMS introduces new features to its team members, they are required to undergo extensive research to utilize the optimal performance of the newly added features. Here is another cost to be concerned about while you are calculating the Learning Management System returns.

Some of the questions that arise in this stage are:

If the members need to be trained by online tutorials?

Are there any requirements for conducting one-to-one sessions for their betterment?

What should be the time duration of this training, and what would be the cost of the resources to allow them new tutorials?

Based on these things, you need to evaluate the learning curve of an LMS.

6. Assessment of the LMS costs:

One of the most crucial things to be concerned about when you are calculating the returns of an LMS is the choice of the LMS. It determines the returns from your investment. Nowadays, there is a varied range of Learning Management Systems available in the market, having their own sets of pros and cons. Some of the LMS is cloud-based and cost-effective. A cloud-based system needs zero installation costs and less maintenance. They reduce the expense as they have an in-built data storage system.

When it comes to the implementation of a Learning Management System, it becomes a significant task for the business as it involves a lot of amounts to invest. An LMS is built on the promise of providing a cost-effective model of learning that will serve best in the purpose of online training programs.

Closing Thoughts:

As the Learning Management System holds the power to change the eLearning scenario in the coming years, you should be aware of the importance of this system and work thoroughly. It is always required to minutely observe the efficiency and functionality of the LMS software. It should focus on the basic requirements like saving training time duration and cost, cutting down the employee turnover rate, and providing the best solution in the market.

If you are looking for a learning management system that offers the best returns when it comes to calculating ROI, you can try Gyrus, an LMS platform that ensures you a world-class eLearning experience providing easy access to its integrated AI tools. Gyrus also provides a high-class learning experience that is scalable for future purposes with robust analytics. It offers an advantage of reporting to help you in monitoring the employees' performance effectively.

What is eLearning?

  • E-Learning allows the online delivery of training with real-time tracking of training analytics, optimizing time and reducing costs associated with traditional learning methods.

What is an LMS?

  • E-Learning allows the online delivery of training with real-time tracking of training analytics, optimizing time and reducing costs associated with traditional learning methods.


  • SCORM and AICC are an international standard for tracking E-Learning activities. xAPI (formerly Tin Can API) is the Learning Objects new standard. The Gyrus Learning Management System supports both of these standards.