You know you have to plan a budget if you aim to get a learning management system (LMS) for your organization. Getting an LMS within a cost-effective budget throws a real challenge to learning and development (L&D) managers.
Be it a proprietary LMS or an open-source, it will cost you. There is no doubt in the cost aspect. The only consolation is the degree of the cost-effectiveness of an LMS will change.
In this blog post, we will look at the ‘5 related costs of getting your LMS’, which some dub as the ‘LMS buying guide in 2021 (or any year for that matter!).’
The LMS Buying Guide 2021 – the Costs Involved
Call it an implementation cost. The acquiring cost directly relates to the license cost of an LMS software. This cost forms the basic price tag of the LMS you look forward to having at your organization. And that is too, the LMS implementation cost applies irrespective of the software license type – proprietary or open-source.
Any proprietary LMS vendor like Talent LMS, Docebo, Adobe, etc., charges a license fee from you as you know it. But how come an open-source LMS will cost you?
Of course, a common misconception is that open source LMS software costs nothing, and it’s for free. Like Moodle LMS, open-source software is available at a cost-free charge. But it’s not for any number of users. If your users increase by any chance, they only charge a nominal fee for using their eLearning software.
One important thing you need to note is that this acquiring cost changes from one LMS vendor to another with their different pricing models. We’ll have a look at these models, as well, in the later paragraphs.
Customizations to your LMS also cost you! Since your LMS is something like the house you buy, but you beautifully renovate it to suit your taste and preferences. Similarly, you prefer to customize your eLearning software according to the L&D needs of your organization.
The best example of this custom work is on Moodle platform. There are many LMSs that are built on top of Moodle. Some of them are here: Corporate LMS from eAbyas Info Solutions, IOMAD, Totara, CobaltLMS, Moodle’s Workplace, and the list goes on.
And the cost of customization varies and is proportional to the custom requirements you propose to modify in the LMS software.
Hosting forms the resulting cost of your LMS. Depending on the choice of LMS hosting, it will incur the cost. If you choose a cloud-based eLearning vendor, then you won’t waste anything spending on the infrastructure. However, if you self-host an LMS, it will cost you proportionally.
For those who don’t want to risk spending on eLearning infrastructure, a cloud-based LMS comes in handy. You just need to sign up with a suitable plan.
Take a look at the MoodleCloud to host your Moodle site there and run it at the earliest possible. Or there are plenty of others, including some of the Moodle partners, who host your LMS.
There are a host of proprietary LMS vendors like TalentLMS, Docebo, SAP Litmos, etc., who offer their services on the cloud.
Maintenance is an indirect cost resulting from the employment of a team to manage the eLearning software at your organization. Since LMS software is a complex one, you will need at least an LMS admin.
Only large organizations can maintain a team of tech folks. In the case of small-time organizations, this cost will be a sure burden to avoid. Going with a cloud-based LMS will be worthwhile with a little investment for such organizations.
So depending on the size of your organization, to manage LMS affairs at your end, this cost will be incurred.
The support for your LMS software incurs an indirect cost to you. It’s a post-purchase affair. The support from your LMS vendor comprises installation guidance, bug fixing, security updates, version updates, admin training, and many such tasks.
The support may be taken through email, video/audio calls, or even on-premises visiting by their support specialists.
For providing support, by and large, your LMS vendor will charge a fee that is paid annually and signed as a contract. You can change the support player in case you find a better one.
So, when you want to have an LMS, consider these costs into your LMS budget plan. They will give you a ballpark figure for estimating the costs incurring in the course of time.
The LMS Buying Guide 2021 – the Pricing Models
Every LMS software pricing isn’t the same. Depending on an LMS vendor and their product, the LMS pricing models vary. Now, let’s look at some of the common LMS pricing models available in the market.
One Time Purchase (OTP):
The OTP pricing model comes into the picture especially when the LMS software is installable at your premises, on your server. Sometimes, the LMS vendor gives away the source code itself through this kind of purchasing model.
The LMS cost is for the license of the LMS, and it does not include other costs related to the LMS software.
This type of pricing model is usually associated with open-source LMS software such as Moodle.
Per users, per month:
According to the users per month, the LMS vendor charges a license fee based on the certain count of users per plan per month which is billed annually. The LMS vendors who run on the cloud usually employ this pricing model. TalentLMS runs its LMS plans based on this pricing model.
Moreover, this LMS pricing method suits well for both on-premises and cloud types of the LMS software.
The LMS vendor will list out the number of users for each of the plans they mention on their pricing page. Along with the users’ count, they will also mention some more accessible features of the plan.
Per device, per year (for App):
Some of the LMS vendors such as Moodle employ this type of LMS pricing model. The LMS fee will be primarily based on the number of devices used irrespective of the number of users per device.
By the way, the LMS app fee will be billed per year instead of charging per month and billing it annually.
Along with the device restriction on a specific plan, they will also restrict the number of courses accessible through that plan.
So, each of the LMS vendors will have their own type of pricing model according to a number of factors. Be it hosting type, LMS source, and the myriad of other aspects. Your organization can choose an LMS according to the L&D goals you can meet through it and the budget planned to acquire one.