The Business Case for LMS at Small and Mid-size Companies
Most large companies can justify the business case for Learning Management Systems based on cost savings. By automating manual processes and, often, centralizing them, companies can take a big bite out of their administrative overhead.
But what happens in a small or mid-size company, when the headcount numbers aren’t large enough to generate enough savings to offset the investment in an LMS? We’ve run into this situation a number of times.
Big companies on average employ one training staff for every 300 employees, which for a 60,000-employee firm equals at least 200 people creating, delivering, and administering training. A fifth to a quarter of this headcount is doing tasks that can be either wholly or partially automated. What’s currently being done by 40 to 50 people can be done by 10 or 15.
We have a relatively small but expanding client of about 4,000 employees that has outgrown its current processes and practices for training, and desires to invest in an LMS. Unfortunately, they can’t make their business case work based on cost savings – there aren’t more than 15-20 training staff in the entire company! – so they’re focused on identifying intangible benefits and on possible performance and productivity improvements that are, however, difficult to quantify. Intangible benefits include 24x7 access to training, better ability to audit training and to comply with training-related regulations, enhanced ability to create and deliver e-learning, and so forth. Performance improvements include increased revenue and market share resulting from more and better training, more and better performance feedback, and enhanced goal alignment.
In big companies, a business case relying on intangible benefits and unpredictable performance improvements will simply not fly. The good news about a smaller company is that they can still take good ideas on faith; the executives themselves are closer to the day-to-day headaches that result from not having an LMS – lack of visibility into the skill sets of the organization, inability to measure the inputs or outcomes of training, inability to run even the simplest training reports.
