OVERVIEW:
Online Learning Management alternatives will continue to evolve rapidly with greater options for new software, hosting and administrative services. Direct costs – typically software and hosting – have decreased with continued upgrades to navigation and user-interface, and now with added efficiencies of ‘cloud’ hosting. Indirect costs require careful review on multiple fronts, such as: a) An objective assessment of available/operational internal resource capacity to perform support, maintenance and administrative services or to engage with out-sourced vendor staff to support these services, and b) An accurate projection of LMS deployment scope. A company’s demand for online learning will rapidly increase and gain complexity over the next 2-3 years. Software and hosting options have almost unlimited capacity to meet demand. Services capacity is the bottleneck.
IN-SOURCED VS OUT-SOURCED LEARNING MANAGEMENT
The critical decision-point is whether to purchase LMS software and in-source the function or to contract with a LMS Services provider to out-source the function. Both options have multiple alternatives available in the market. A sample of key cost and risk elements are discussed in the following paragraphs.
In-Sourcing Learning Management Services:
The upsides to purchasing an LMS are increased control and customization of the online learning function. As online learning demand increases (internally and externally), the business case for LMS in-sourcing gains strength. However, a common misjudgment is underestimating the multi-faceted nature of support required to operate and administer an LMS – most of these elements are “soft costs” not budget line items:
- Purchasing the software requires analysis but is the easiest part of the process. Good LMS software options can start at $12,000, plus upgrades every 12-18 months for half the purchase cost.
- The Cost/Time to install the software and achieve operational effectiveness within the client IT environment requires combined IT and Training resources. LMS software installation can be complex, depending on Server Operating Systems and the degree of specialized capacity available within IT and the Training team. Installation raises a range of client server security issues depending on the target user audience – internal staff (working from network computers vs remote) or external constituents.
- Time for the Training staff to learn how to administer the LMS: publish and upload courses, create curriculums and assign courses to curriculums, enroll/manage users, manage user gradebooks and activity reporting, etc.
- Cost to acquire/build course content (SCORM complaint)
- Time to establish course and LMS organization naming conventions and user groups, upload courses, design curriculums, transfer student records, etc. The setup of the user registration process and curriculum listing requires pre-planning prior to loading any content into the LMS.
- Establish operational back-up – that is, people – within IT and Training who can respond when primary resources are unavailable, leave the company, etc. Every system needs 24/7 IT support and user help support to respond.
Out-Sourcing Learning Management Services:
The key upsides to Out-Sourcing LMS Services are lower internal capacity requirements [the converse of the costs/risks cited in the In-Sourcing discussion above] and the vendor’s responsibility to manage all software, hosting and administrative matters. For example, client server maintenance and downtime, software patches, upgrades and access security plus all functions relating to user course/curriculum access are managed. A hybrid out-sourcing alternative exists in which the course and curriculum functions are supported by client staff trained on the vendor system.
- Understanding of the LMS vendor’s services cost structure. Many vendors will charge per-user-course-access fees. For example, in addition to upfront vendor licensing fees, the activity of 100 users per year accessing 20 courses and tests at $5 per access would equal $10,000 in “user fees.” Best to read the fine print.
- Determine the degree of customization available – such as company logo on access pages, costs for reporting, timing of reporting, security protocols for UserID assignment (internal vs external staff), etc.
- Time for Training staff to learn how to upload courses, assign courses, create curriculums, enroll/manage users, manage gradebook and reporting in the vendor system. Make sure the vendor has sufficient training and/or help desk resources.
- Cost to acquire/build course content (SCORM complaint)
- Time to establish course and LMS organization naming conventions and user groups, upload courses, design curriculums, transfer student records, etc.
- Establish operational back-up – that is, people – within IT and Training who can respond when primary resources are unavailable, leave the company, etc.
Online Learning Management can be a significant asset to your business. Effective due diligence will enable you to accurately manage all cost and capacity elements while receiving and/or delivering expert Learning Management services.