In a survey conducted by Bersin & Associates in 2007, half of large companies in the United States reported their learning management systems were used by employees outside of the country. That number is up from just a year ago, part of a clear trend toward the adoption of enterprise-wide platforms to streamline learning processes and systems. But along with benefits, “going global” brings additional costs, staffing and governance considerations.
Recently, Bersin & Associates studied five large enterprises operating global, enterprise-class LMSs. These organizations are representative of U.S.-based enterprises with more than 10,000 learners, operations in three or more countries and LMS deployments in three or more languages. If your organization is considering a global LMS, the following findings will help you plan for ongoing costs and system management. Or if you already have a global LMS, you can see how your organization compares.
Among the companies interviewed, annual operating costs for 2007 ranged from $180,000 to $640,000. Nearly half of the annual cost is spent on license fees, as all of these systems have been implemented within the past three years. (Over time, license fees will disappear as organizations transition to purely maintenance contracts.)
Support fees account for 30 percent of the annual costs. Nearly every company interviewed has premium levels of support, with a dedicated technical representative from the vendor. Most global enterprises need this level of support due to the scope and complexity of their systems.
Professional services fees account for another 20 percent. For example, a minor upgrade (e.g., to the next “dot” release) cost one company $15,000. A major upgrade, including migrating customizations and integration with third-party tools, cost another company more than $200,000.
Global enterprises require larger staffs for system administration, learner support, reporting and project management. IT staff is needed for ongoing system maintenance, integrations and upgrades, and managing the vendor contract and relationship.
Those companies with 30,000 to 40,000 learners allocate an average of 40 full-time equivalents (FTEs) across the company to perform these activities. Those with more than 100,000 learners employ from 50 to 100 FTEs, depending on the size and geographic scope of the organization. Approximately half of all personnel are devoted to LMS administration, such as setting up user IDs, loading courses and managing registrations.
End-user support accounts for 17 percent of all personnel resources within the organizations studied. The company’s central help desk typically is the first line of support for end users with LMS issues. If the question or problem cannot be resolved by the central help desk, it is escalated to a dedicated LMS support team, typically with two to three employees.
Most companies have established LMS steering committees comprised of key stakeholders throughout the organizations. These groups make decisions on implementation and integration plans, determine priorities for upgrades and enhancements, as well as establish company-wide standards.
In addition, communities of practice often are used to disseminate information and share best practices among subgroups of key stakeholders. These groups are based on subject areas such as content and standards, LMS administration and third-party tools.
One of the trickiest problems is establishing a balance between central control and a distributed administration. This can be accomplished through a shared-services model, wherein a central team performs certain activities, while delegating authority to local training groups to perform other activities. If you’re in the process of selecting an LMS, it’s critical to spend time developing the governance process in advance. The group that will manage and administer the LMS must make investments in the staff and expertise needed, and the business case for the LMS project should include the resources needed to build and operate this group.
Bottom line: Operating a global LMS costs money — an average of $400,000 per year — and may likely require different processes, resources and organizational structures. Before your company makes the transition, you can learn much from those companies that have been operating global LMSs for several years. Make this an important part of your investigation and due diligence.
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