True Cost of an LMS

Estimated reading time: 3 minutes

Every business, at least every business that wants to stay in business, manages cost. An organisation assessing the cost of a Learning Management System (LMS) also wants the best value for money.

First, you need to think carefully about the type of LMS that’s right for your organisation – whether you’re using one for educating students or training employees. It needs to be a good fit otherwise you’ll sign up for a system that won’t meet your objectives because it’s underpowered or over-engineered  – either way, you’ll simply waste money. To follow are some areas to consider when making an LMS pricing comparison for your organisation.

The difference between those who use an LMS – whether that’s education, health, retail or corporate – is significant and as a consequence, the pricing models are equally varied. LMS solutions are often sold as software-as-a-service (SaaS), and use a subscription model. This may be for the entire LMS, or only for the features that are used. Other vendors may offer an annual license fee, or a single fee, or no fee at all. Anyone conducting an LMS pricing comparison needs to consider these options.

• Per learner, per month is the most common solution. It’s a flexible pricing option that scales according to the size of your need. Fees can be as little as $5 plpm, although setup and access fees might apply.
• Per learner, per use. When an LMS provides more features than a company needs, it’s possible to pay only for the features you use. It’s a good option for organisations that don’t need to train employees regularly.
• Per course. This is especially attractive when you need to run a very specialised, stand-alone course. It’s an effective option for compliance-focused industries that need to certify learners.
• Licensing fee allows companies to install LMS software on-premise. Payment terms vary and are a great option for those who regularly make significant use of an LMS across their organisation.

Additional costs may apply when installing an LMS and it can be easy to overlook them.

• Implementation. In most cases, the price of setting up an LMS is met by you. How much you spend will depend on whether you choose a cloud-based solution or host the LMS on-premises, and other factors like software customisation and data migration will affect the final cost.
• Training.  Some vendors may include web-based training for free, but on-site training may be more effective. However, you’ll need to budget for it.
• Support. The same applies. Basic support (like a knowledge base and email support) is typically included. If you want access to advanced support, you’ll need to budget for that separately. 

What’s the right amount to spend on a learning management system? When making an LMS pricing comparison, think very carefully about your needs and your objectives. Avoid a system that has more features than you require, and is not flexible enough to change when you do. This will help you find a system at the optimum price point.