Do you want a raise?
Kathy Anthony can teach you exactly how to do that.
In her role as a partner at O’Sullivan Creel, a public accounting and consulting firm, Kathy has not only gone through the lengthy process of finding, buying and implementing a new LMS, but she has also determined just how worthwhile that system is to her company.
“In our very first year that we implemented this product we saved almost 400 hours (accountants are excellent timekeepers) that had previously been put to performance management. Look at the ROI on that!”
You, too, can be prepared with hard numbers if you follow Kathy’s advice:
1. Start by focusing on just one process
Kathy didn’t try to measure and record every little indicator and process that the new LMS affected, instead she focused on the one that gave her the most information with the least amount of effort on her part.
“Just keep it simple and keep it relative to your business, to your firm.”
What is the biggest element of your business or organization that the new software will affect?
Is it the amount of time you spend on training? The cost of managing compliance or certification records? The sales you currently lose from poorly trained reps?
Pick the biggest, most important one of these and…
2. Track something
Once you know which process you want to focus on, determine how best to measure changes in that process.
Kathy’s company already had something, conveniently, in place to help her do this.
“Accountants, we keep track of all of our time, and so we have a service code where we post the amount of time that we spent with performance management. It’s a time and billing system and so we’re constantly tracking. A lot of firms may not track their non-charge time but we do because you can’t manage what you don’t measure.”
You don’t need a full-fledged time tracking system for billable hours like Kathy’s company used.
Look for something you already have in your company to manage the tracking; that way you cut down on effort and learning curve, and it makes it more likely you’ll actually do the tracking.
Does your company keep track of service calls, or the annual cost of offsite training?
Any number of indicators you already measure could be a good thing to use when evaluating an LMS’s ROI.
3. Understand the true TCO (Total Cost of Ownership)
You’d look pretty silly bragging to your boss about $10,000 in annual LMS savings if he pointed out that it actually cost you $500,000 just to install the darn thing.
Making sure you have a handle on the TCO for your new system will help you avoid that embarrassment.
Consider the following when calculating TCO:
- Full year’s license/subscription fees
- Upgrade services
- Maintenance and support
- IT infrastructure cost (servers, databases, diversion of IT staff etc.)
- Man hours—selection, implementation, maintenance
Start doing all of this now, and you’ll be well on your way to figuring out the true ROI of your new LMS (and getting that raise!).
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