Budgeting Mistakes Training Companies Should Avoid When Investing In A New LMS
There’s a lot that goes into implementing a new LMS. Organizations must consider the needs of their employees, in-house team, and stakeholders when launching a corporate eLearning program. However, training companies have to take it a step further to identify and address the requirements of clients. They need a versatile LMS with a broad range of features to meet everyone’s expectations. A diverse subject matter, training objectives, and client costs’ restraints call for a robust but flexible system. As such, you need to plan ahead and prepare an itemized budget to get the most value for money. Training companies should avoid these common budgeting mistakes to get the best LMS ROI.
7 Top Budgeting Mistakes To Steer Clear Of
1. Ambiguous Target Audience
Some training companies simply aren’t sure who their clients are or what they need from online training. They may brush the surface with market research, but they don’t get the complete picture before investing in an LMS. Thus, they aren’t aware of which features to look for, the level of support they need, or the best deployment type. They end up going over budget because they either have to expand the tool to improve functionality. Or, worse yet, invest in another new system to address the issue. For this reason, it’s crucial to do your homework and find out why your audience is investing in training in the first place, without making further budgeting mistakes. Why are they enlisting your services and how will they interact with the LMS?
2. Failure To Create A Must-Have Features List
As a training company, you must not only consider your must-have features but what clients will be looking for. For example, you’re catering to larger organizations that need to deploy global compliance training programs. Thus, you may need an LMS with certification management, multilingual support, and advanced reporting. Even if you’re going to be doing the updates and maintenance on their behalf, they still need these features to get the best ROI. Get with your team to determine which features they require and how the LMS will fit into their daily workflow.
3. Underestimating The Importance Of Vendor Support
Even the most experienced training providers need help from time to time. As do the clients they contract with. As such, you should never underestimate the value or importance of an LMS with advanced vendor support in order to avoid budgeting mistakes. For example, a system that offers limited services, such as a FAQ, may be less expensive now. But what happens if you encounter a serious issue a month from now and need one-on-one guidance? Delays end up costing you more in the long run, as does hiring a third-party IT consultant to help.
4. Not Calculating The Learning Curve
A major budgeting mistake to avoid when investing in a new LMS is not accounting for the time it takes to actually master the tool. This applies to the learning curve for your team and your future clients. For example, the system is feature-rich and fully customizable, but does your team know how to use it to their advantage? Do they have the necessary skills and IT experience? Or are you going to have to spend a few weeks helping them adapt to the new platform before you can dive into content development? If so, this can take a bite out of your budget and push back your launch timeline.
5. Misunderstanding Pricing Structure
One of the most important considerations when implementing a new LMS is choosing the best pricing structure. Different platforms offer different payment options and deployment types. For example, some vendors go with a monthly subscription fee and they host on the system on your behalf. While others require you to pay all the licensing costs upfront and you host it in-house. You need to be aware of how the vendor goes about pricing, what that includes, and if they cover updates/upgrades.
6. Tie-In Tool Challenges
You ensure that the new LMS offers all the essential features, you understand the pricing structure, and it provides the ideal level of support. However, you can still run into another budget-breaking obstacle, a lack of compatibility and integration support. The new LMS must be able to mesh with your existing tools and make data migration stress-free. Otherwise, you may end up footing the bill for replacement tools or add-ons that put you over budget. Or your team will have to devote a significant amount of time and resources to make everything work harmoniously.
7. Not Accounting For Ongoing Maintenance
There are two types of maintenance you need to factor into your LMS budget. The first is for the system itself. Ensuring that the tool is always up-to-date and on the cutting edge so that you can stay competitive in the market. The second deals with content. You need to be able to allocate resources to updating, revising, and expanding your content within the system. This also includes purchasing additional assets, such as templates you can repurpose. If you’re a training consulting company or provider, you can charge clients for a small portion of your maintenance costs. But you might still have to cover LMS upkeep on your own since it is used for all your accounts and projects.
Investing in a new LMS is rarely stress-free. There’s always some degree of anxiety about whether you’ve chosen the right system that will meet everyone’s needs. However, this guide can help you avoid some of the most common budgeting mistakes and reduce the risk of buyer’s regret. Especially if you research your target audience, identify your must-haves, and factor in the learning curve beforehand.
Have you created a requirement list for your new LMS platform? Have you factored in all its costs? Can you really afford your top LMS contenders? Or are there hidden LMS fees that may whittle down your limited resources? Download the free eBook How To Buy The Right LMS: The Complete Guide and find out the tell-tale signs that your organization is ready for a Learning Management System, the top criteria for choosing the best LMS for your organization having all possible LMS hidden fees in mind, as well as the LMS reports you should look for in a new LMS.