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Building a Successful LMS Business Case

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You and your team work hard on developing and delivering online training. You understand the need for a Learning Management System. Your company needs to track employee progress, the effectiveness of training, and to streamline training from start to finish.

Yet, outside of your team, everyone else in the company gives you a blank look, or they glaze over whenever you mention “LMS”. They start referring to you as that person who wants Lottsa Money Spent for training. How do you make them understand what you want and why you want it? You build an LMS business case.

What is an LMS Business Case?

A business case is a formal document in which an argument for expenditures is presented. A well-crafted LMS business case allows you to explain why purchasing and implementing a learning management system is necessary.

  1. Executive summary
  2. Business need
  3. Solution
  4. Proposed budget
  5. Anticipated return on investment
  6. Implementation plan
  7. Risks and anticipated challenges
  8. Closing statement

Building a Successful LMS Business Case

1. Executive Summary

The executive summary for your LMS business case is the bait on your hook. It’s the first thing that your audience will read and you need to reel them in.

The executive summary should be no more than one page. In that one page, you will need to:

State the business need

Describe what the problem is

Explain your solution to the problem

Explain why that solution is the best

Make every word count. Present the key points of your argument in a compelling manner. Remember that while most of your readers will go on to read the entire document, many will only read the summary, so you want what you have to say to have an impact and be memorable!

2. Business Need

The business need section of your LMS business case is where you describe the problem that your organization is having with managing training.

This is where you identify areas issues such as inefficiencies in your training program, missed opportunities for improvement and the “wish list” from trainers, supervisors and employees in general. Make sure you include any pertinent information about improvements needed in employee skills and knowledge and performance issues.

You may need to describe which of your organization’s departments and processes will be affected by your proposed change – what is currently being done, how those processes can be improved and why they should be.

If you are going to include numbers (budget, man-hours, current training costs, etc.) make sure that your numbers are accurate and current. Use graphs and charts where appropriate – visuals will enhance your argument.

Be objective in presenting the business need. State your case, but don’t name names, point fingers or step on anyone’s toes. Acknowledge what is working and what needs to be fixed. Then move on to explain how an LMS will put things right.

3. The Solution

So far, your LMS business case has described what has been going on with training in your organization. This section is where you explain how an LMS can alleviate the issues you’ve identified and improve the overall training program and its results. Describe the solution in terms of meeting the business goals of the organization and responding to the organization’s business challenges.

The same goes for responding to the challenges facing the organization such as limited training budget, slow growth and low revenues.

1. Meeting business goals

Meeting business goals means addressing what your organization hopes to accomplish now and in the future. Because training is most often viewed as an expense rather than a revenue generator, this can be a hard sell.

This is a viewpoint that your LMS business case needs to change. You have to:

Increase cooperation within the organization

Talk about how training and training management can promote and increase the cooperation of business units within the organization.

Improve overall employee performance

Point out how efficiently-delivered and managed training can help to improve overall employee performance, which leads to increased productivity and quality of work. It can also mean increased sales.

2. Meeting ROI and growth goals

A good LMS can be used to improve the use of the training budget by reducing or eliminating the need for travel related to training by taking the training to the learner, where they work and when they need it. eLearning delivered by an LMS can cut training costs by reducing or eliminating the need for in-class instructors, creation of manuals and PowerPoint presentations and budgeting for classroom space in multiple locations.

You can point out that the growth of your organization depends on the development of quality training content that will give employees the skills and knowledge they need to help you compete in business. The right LMS can speed up learning content development and delivery and help to deliver learning when and where your employees need it. Mobility and ease of access are key features offered by a good LMS.

4. Proposed Budget

To senior management, this may be the most important part of your LMS business case. What is it going to cost?

The budget could be where your LMS business case lives or dies. While you understand the value of eLearning, those that sign the cheques may not see it that way. For this section, you’ll have to break down the process of acquiring an LMS from vendor selection to implementation.

You’ll need hard and accurate numbers for items such as:

Cost for training LMS administrators, training department staff and supervisors

Software purchase

Software licencing and vendor support agreement

Labour cost for set up (IT)

Hardware requirements

Cost for training LMS administrators, training department staff and supervisors

You’ll need to be specific about initial costs, maintenance costs, staffing requirements and support costs. Use hard and accurate numbers as you walk readers through what must happen to make your solution a reality. Take time to create a detailed breakdown of where every dollar you are asking for will be spent.

After you’ve asked to have Lottsa Money Spent, you can explain how your organization will benefit from its investment in eLearning by describing its Return on Investment.

5. Anticipated Return on Investment

Return on investment (ROI) is the other piece that is near and dear to the hears of senior management. They really want to hear, “What’s in it for the organization?”.

Again, hard and accurate data is important here, although for some items, numbers may not be available. Some items you will want to include in your LMS business case include:

Reduced training time

Reduced travel and accommodation costs related to training

More training for customers and partners

Increased productivity

Improvements in product quality

Increased sales

Easier access to training

Easier and better tracking of trainee performance

The list will vary from one organization to another, but the point is the same. You need to make sure that senior management sees an LMS purchase as an investment opportunity that will realize financial benefits.

6. Implementation Plan

Now that you asked for the money for your learning project, how are you going to pull it off? In other words, what are the steps for a successful learning management system implementation?

Start by creating a timeline for the project. At each step, include information from your budget and reference what you’ve said in the Solution section of your LMS business case to help your reader follow your plan. Again, numbers are important. For example, don’t say, “Provide system-wide access to training platform.” Instead, say something along the lines of, “Provide training platform access to 3600 work stations and test accessibility over a one-week period”. Try to include as much detail in your plan as possible.

In your plan, you may also want to describe technical requirements and timelines such as integration with HR applications, training LMS administrators, configuring LMS functions such as reporting, ecommerce, learner registration, etc. All of these activities have to be done on a schedule and, as such should be included in the implementation plan.

Your plan should also include a description of the roles and responsibilities of everyone involved in the installation and integration of the LMS as well as the roles and responsibilities of those involved in its operation, administration and maintenance.

7. Risks and Anticipated Challenges

Risks come with any change to an organization. This is where you want to describe what might go wrong and how you plan to mitigate the situation should it happen.

Challenges are also something that needs to be dealt with. For example, with new training initiatives, there is always a sector within an organization that will be resistant to it or will work hard to derail the initiative completely. You need to describe how you will get the buy-in you need from all parties in the organization.

8. Conclusion

The conclusion of your LMS business case need not be a repeat of the Executive Summary. Instead, make a case for your business case. Include the key points from each section of your document and hammer home the benefits of buying and implementing your own LMS.

Conclusion

The elements of an LMS business case that I’ve covered in this article are the basics. Do some research and find the approach that?s right for you. Your organization may already have a business case template – if so, use it. If you don’t have a template, there are plenty available on the web.

Make your LMS business case clear, as detailed as is required and focused on what your case means to the future of your organization. And, after you’ve succeeded, write a blog about it!

Need tips to help you convince key decision-makers in your organization to fund new eLearning initiatives? Download our free eBook now!

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Peter Exner

Peter is an Instructional Designer with BaseCorp Learning Systems. He has been writing and creating learning materials for just over 20 years and is still relatively sane. When he’s not working you can find him on a golf course or on a sunny deck with his trusty Martin D-28 guitar in hand.

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