Buying a learning management system, or LMS, is a big decision for any organization. There are few other systems that reach as many employees, and there is no other system that is so critical to getting new staff up and running quickly and effectively. 

But like any mission-critical purchase, buying an LMS will likely involve a lot of stakeholders, only some of whom will see the value right away. 

Enter, the business case.

For purchases that require a broad base of support within the organization, a business case is usually a bridge that you have to (eventually) cross. 

Today, we’re going to dig into what a business case is, what it’s designed to do, and the key steps to build one for your LMS purchase. Here we go!

LMS 101

Before we go any further, let’s clarify some terminology to make sure you’re in the right place. 

The world of learning technology is large and complex, and there are dozens of tools that all have overlapping functionalities. 

LMS solutions are designed to help businesses and organizations train their staff, manage their training (and keep it up to date), deliver training courses and learning experiences, serve as a repository for educational content, author courses, and keep all of the above tracked and up to date. 

Common use cases for an LMS solution include: 

• Keeping certified staff up to date on their certifications (e.g. are your bar tenders SmartServe certified?)
• Continuing education and training for staff development (e.g. providing ongoing training for nurses)
• Onboarding and updating staff about corporate policies, and delivering relevant content
• Managing regulatory compliance and ensuring staff understand relevant regulatory frameworks for their job.

What is a business case?

A business case is basically the process and document that you use to explain internally what you’re doing, why you’re doing, how it’s going to get done, and who’s involved.

This will, of course, run the gauntlet in complexity, from a quick email to your boss, to fully fleshed document that goes deep into the rationale behind each decision. But generally, you need to have the following broad sections to answer those questions:

• Objectives (why): You need to state why you’re pursuing this business case. This can be summarized as the problem you’re trying to solve. What made you get out of bed and pursue this business case in the first place? How does your objective for the project link to the objectives for the business?
• Stakeholders (who): Who’s involved? Do you have a specific supplier/vendor, are you using internal resources? Who’s going to be impacted by this decision, and who do you need internally to make this happen?
• Plan, specs, and requirements (how): How is this all going to happen? How are you going to get it done?
  Opportunity cost (why this, and not something else?): Why are you recommending this course of action, what is the opportunity cost of your suggestion, and why change at all?

The business case is also an opportunity for you to outline what isn’t in-scope for your project. For us, it’s saying “here’s what an LMS is not going to do,” clarifying for everyone what the purpose of the tool is. 

So now that we’re clear on what an LMS can do, and what a business case involves, it’s time to build our business case for our LMS purchase.

Step 1: define the objectives

First, you need to define the objectives of your LMS purchase. What are you trying to do? Generally, this is easy for you to define. However, remember: a business case is essentially a pitch to your internal stakeholders to get them on board with your purchase/decision.

Therefore, your objectives for the project need to be objectives that your stakeholders care about.

For example, if a key stakeholder for your LMS purchase is the VP sales, then your objective should ultimately roll up to what she’s interested in — new sales.

If your organization has an OKR framework in place, then that can be a great place to start.

The best way to think about defining objectives is to think of it as a hierarchy:

• First, what are you trying to achieve?
• Second, what are each of your stakeholders trying to achieve? How does your LMS help them achieve those objectives?
• Finally, what is the organization trying to do, and what role does an LMS play?

It’s also important to evaluate the ROI of your purchase. This may be difficult, but consider the time an LMS saves for end-users and administrators, as well as the improved quality of work that employees can produce because their training is better than it used to be.

By evaluating these success criteria, you can design objectives that are more likely to resonate with your internal clients.

Note: step 1 and 2 are often done in tandem, since the objectives need to be tailored to your audience.

Step 2: Define who’s involved

Next, you need to define who’s involved in your LMS purchase. Who needs to be consulted, and how, and whose help will you implement your solution for. Stakeholders can usually be broken into a few key constituencies.

End users
End users do need to be consulted during the business case. Not only can they articulate their needs and ensure your purchase meets them, but they also have valuable experience that you can use in your buying criteria. Adding a few end users to your buying committee can help gather the base of support you need.

Executives
While end-users are valuable to consult, getting your executive team on board is absolutely critical because they’re the ones who need to sign off. We recommend when you’re considering your business case, consider which executive is going to be impacted the most, and work directly with them to understand their needs and ensure that your LMS recommendation meets them. For example, you might be working with the chief people officer/head of HR. They might be extremely focused on onboarding new hires effectively. Therefore, your LMS business case should focus on that use case.

Team leaders
While executives might make the decision and end-users live with it, your managers and team leaders are where the rubber meets the road in terms of adoption. You absolutely should include them in the purchasing decision. This not only brings them into the fold of your change management but without it, your solution is unlikely to be used.

Administrators  / IT resources
Finally, we have administrators and IT resources. It’s unlikely you’ll be running your LMS by yourself, so you need to bring in the people who are going to do the work. This might be HR specialists, enablers, trainers, hiring managers, or someone else on your team. Likewise, your LMS will need some operations or IT resources to get it implemented and integrated. You’ll need to consult with those specialists as well. 

Step 3: Outline how you’re going to get it done

The next step in your business case is to define how you’re going to actually do your LMS purchase, implementation, and outline how it’s going to work for each of your stakeholders.

Some business cases will have a detailed plan at this point defining each individual step, but for an LMS purchase, we don’t recommend that approach. Rather, focus on what needs to be done, and assign dates for the key milestones of the project. 

For example, rather than having an exhaustive list of every task needed for implementation, break that into a few key milestones that need to be hit, like:

• Vendor selected
• Kickoff meeting
• Migration / population from existing system and resources
• First new course or learning program completed
• Full rollout
• Break even cost point

This way, your stakeholders have a good sense, not of the work that needs to be done (which isn’t that relevant to them) but instead, a good sense of when they’re going to start to see the impact / ROI of your recommendation.

Step 4: Opportunity cost

The biggest killer projects are apathy — sticking with the status quo rather than embracing change. That’s why outlining the opportunity cost is essential.

The cost of inaction is basically a rundown of how you are solving the problem an LMS solves for your organization right now. How much is that costing the business or your team, and how it is getting in the way of their ability to do their jobs?

For example, let’s say you work in a regulated industry, and you want to use an LMS to ensure your communications team is fully trained and certified on all the regulations. Right now, all creative that’s produced needs to be reviewed by your legal team. With an LMS, there would be fewer reviews. Therefore, the cost of inaction is the clunky process and slow delivery due to legal review, and the dollar cost is the (very expensive) cost of your legal team’s time.

The cost of inaction can also be understood as the time and cost of doing things the way you currently are, even if there is no significant problem that you’re trying to solve. For example, an LMS might make it easier for the HR team to onboard new hires, so it only takes them 4 hours per hire instead of 10. That’s a significant improvement and something to highlight in a business case.

Tie it all together

The final step is to tie it all together and structure your business case for each group of stakeholders. Because despite the challenges inherent in proving the ROI of learning, there is a business case to be made for an LMS. Better certification rates, more engaged employees, and more employee training will ultimately lead to the best ROI of all — better-trained staff. As customer experience is increasingly the point of differentiation for organizations, placing a premium on your team to build the best CX possible isn’t just good for your customer — it’s just good business sense. And an LMS is a critical part of that process.