How to avoid the hidden costs of a Learning Management System (LMS)

How to avoid the hidden costs of a Learning Management System (LMS)

Thursday 23rd April 2020
Yahia Rezgui

Thinking about buying or replacing an LMS? You are not alone.

According to research by the Brandon Hall Group, 44% of organisations are not satisfied with their existing LMS and 48% are investigating different or new learning technology systems.
The research also found that the cost of an LMS makes up 38% of the average learning technology budget.
Considering that this is a large budget chunk, it is critical to have full visibility of not just the up front and "hard costs" but the often hidden, cumulative costs of many systems before making a decision.
In addition to the up-front monetary cost of different systems, there are many other cost factors, often not immediately obvious.
To illustrate, take as an example a 500 employee company interested in upgrading to an LMS with full customisation and analytics options.
Having narrowed down their options to a commercial cloud-based LMS and open-sourced Moodle, the decision seems obvious to go for the free Moodle system as opposed to spending thousands of pounds on the cloud-based LMS.
However, a few months down the line, after spending thousands of pounds and endless man-hours, this decision turns out to have been the wrong one.
The hidden costs include money as well as time spent. You could compare it to budget airfares: the eventual price once all added costs are factored in always exceeds the initial bargain price.

The true cost of Learning Management Systems - What to watch out for:

On top of the "hard costs" outlined above, there are myriad potential hidden costs once you have decided on a particular system. One easily overlooked factor is time.
There might be no or little initial pricing cost, but if it is taking up large amounts of your company's manpower and time it might well turn out to be more expensive than an LMS that fits smoothly into your existing systems, but has a large upfront pricing cost.
An example of a free, open-sourced LMS widely used is Moodle. Accessing Moodle might be free, but using it as your Learning Management System is not.
Before installing Moodle you will need to set up a server configuration based on your predicted user numbers and user patterns to last for several years, to avoid recurring server costs.
Unless you have in-house IT expertise, you might need to hire a professional IT vendor at considerable cost
To customise your Moodle system, to add and remove features to change design and user IX can cost thousands of pounds, in addition to staff training costs.
The recurring costs for using a free system like Moodle also include administrative fees, such as hosting and security fees, and administrative personnel cost to monitor server and site issues.
"Free" LMS use up valuable time, time for IT professionals to set-up and customise servers, time to set-up new processes and train or hire new staff, time to manage the LMS and create content.
But it is not just free systems like Moodle who have hidden time and monetary costs.
Often the Learning Management System with the seemingly high "hard costs" are the ones with the lowest hidden costs.
If you take in factors such as included system installation and customisation, staff training and customer support all by trained experts, the seemingly higher upfront cost suddenly makes more sense.
Having visibility over hidden, ongoing fees makes it much easier to predict the true running costs of the LMS you decide on.

Here at Oxford Applied Training, we are committed to challenging current practice by offering thorough quality advice based on transparency and fair pricing. Our Trove LMS is priced fairly so you will know from the start what the full running costs are. There will be no nasty surprises if your requirements evolve and you require additional features down the line. If you'd like to know more about our fully featured Trove LMS and our fair and transparent pricing structure that will almost certainly help you make genuine savings.

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