This is a sample of a business case I wrote in late 2005 proposing the acquisition of an LMS for Metrolist, Inc.

Executive Summary

In concert with the NextGen initiative to provide customers with a “best of breed” MLS, as well as the Customer Self Service initiative, Metrolist should endeavor to provide “best of breed” training and learning services that include:

A Learning Management System (LMS) to efficiently administer and track training functions. Key features of an LMS include: easy customer access to eLearning content; efficient registration for instructor-led and online learning classes; complete, individual tracking of certifications, scores and courses completed; aggregate and individualized reporting of courses completed, certifications obtained, training plans, attendance.

A Learning Content Management System (LCMS), or Online Learning Portal, to: efficiently and rapidly develop training and learning materials, courses and pedagogy for delivery online; administer online learning content; provide a "Help Center;" moderate and facilitate peer-to-peer and instructor-to-student learning interactions via bulletin boards, chat rooms and instant messaging (IM).

Effective management of training and eLearning is beneficial to Metrolist as a company. Benefits to the organization include:

• Increased value of the “best of breed” espousal.
• Increased modality of learning – customers can choose their preferred method of training delivery: instructor-led, self-paced, collaborative learning, blended, or virtual classroom.
• Reduced Tech Support costs in support of training.
• A better trained and informed customer base.
• More accurate MLS data.
• Increased customer goodwill.
• Promotion of the “self-service” philosophy.
• 24/7/365 availability of training and learning courses and materials.
• Reduced administration costs.
• Reduced IT support for training.

Average costs of implementing a Learning Management System and eLearning have dropped recently. The industry has stabilized of late, with many leading vendors offering comparable products at competitive pricing plans.

Business Need

Beginning in early 2006 Metrolist will begin the rollout the NextGen MLS system, a significant hardware, architecture, and software enhancement. As the enhancements are released, there will be a significant need to train customers and employees to effectively and efficiently utilize the new product offerings.

This leads to a series of questions:

1. How can Metrolist reach the more than 17,000 members and employees in an effort to efficiently and effectively deliver training?
2. How can training materials be delivered to such a wide audience efficiently, rapidly, succinctly, and in a cost-effective manner?
3. How can Metrolist efficiently and effectively administer, track, and manage each customer’s training?
4. What are the resource considerations involved in the development and implementation of a Learning Content Management System (LCMS) and a Learning Management System (LMS)?
5. What are the costs associated with acquisition and implementation?

Background

Historically, external customer training at Metrolist has centered upon providing 20 to 30 instructor-led product training classes per month. These instructor-led classes are conducted at their on-site training center consisting of 22 workstations where trainees learn products hands-on.

• Metrolist Training and Education served 3,532 trainees in 2005 - about 63% of the training center’s capacity.
• In fiscal year 2005, Metrolist budgeted an average of $9.70 per trainee for instructor-led classes.

In 2003, an online training component was launched for external customers, offering 24/7/365 access to MYmls.com and MYpdc.com product training. The online training initiative has been successful thus far.

• 75% of those who use the online training offerings state that they will use the information immediately in their business practices.
• 80% state that their online learning experience will improve or greatly improve their job performance.

Metrolist’s product offerings have changed dramatically in the company’s history; from books to Legacy-based computer access to full-fledged web applications. In turn, Metrolist’s customers have evolved and usage of Metrolist’s web products currently outpaces the Legacy products nearly 3:1. 73.7% of training class attendees utilize Metrolist’s Internet-based products exclusively in their daily business practices.

Current State

Currently, Metrolist relies heavily on instructor-led methodologies to deliver training to its customers and employees. In fiscal year 2005, Metrolist Training and Education served 3,532 people via instructor-led training classes at its offices - about 20% of the customer membership. Metrolist offers nine (9) customer product training courses in house with an additional four (4) courses taught at customer offices.

Metrolist offers online training for two of its products: MYmls.com and MYpdc.com. The online training consists of self-paced simulation-based tutorials. Customer usage is not currently tracked.

Metrolist does have a Legacy-based training tracking system, the functions of which are not complete or are not known how to be utilized. Consequently, customers cannot obtain a current, succinct report detailing their training transcript, their certifications, and continuing education credit. Additionally, there is no customer self-service when signing up for any type of course - customers must call Tech Support if they wish to attend an instructor-led class. Online courses do not require sign up and are accessed via MYmls.com and MYpdc.com.

• An average of 414 Tech Support hours are spent each month signing up customers for classes, which translates into an average cost of $73,881 per year in man hours alone.

Proposed Solution

In concert with Metrolist’s vision and strategy, a comprehensive Learning Management system will be beneficial to customers, both internal and external.

• The vision for the NextGen initiative is to be the “best of breed” MLS system. A robust Learning Management System aligns directly with providing best of breed service to customers.
• Information about training can be instantly accessed by customers.
• Customers can track their training by accessing transcripts.
• Training paths can be devised in pursuit of Metrolist sponsored certifications.
• Customers can self-serve their training needs: sign up for instructor led classes, take an online learning course, participate in virtual training sessions.
• Just-in-time training on demand 24/7/365.
• Incorporating a solid training and learning strategy is essential for success of the planned product changeover, beginning in 2006.
• Consumers expect just-in-time information and on-demand services. An LMS and LCMS can provide the means for rapid development of new training.

Metrolist’s current growth and planned expansion of product features has created the need for effective training that goes beyond instructor-led training sessions, simple integrated help text, and passive online tutorials. To be truly “best of breed” in delivering just-in-time training involves a robust, feature-rich, eLearning portal that includes:

1. The ability to rapidly develop, deliver, and manage interactive training content to a wide audience via web-enabled eLearning and content management system (LCMS);
2. Effectively administer and track internal and external customer training activities via a robust learning management system (LMS).

The NextGen initiative is already resource intensive. Thousands of man-hours have already been allocated to the construction and deployment of the NextGen system. Consequently, development of an effective training suite in house is unrealistic.

Therefore, to deliver an eLearning content and training management system concurrently with NextGen, it is recommended that an outsourced solution be found.

Several reputable companies offer learning, eLearning, and content management products that are based upon the ASP model (Application Service Provider). ASP is defined as a specialized form of Internet service provider that allows a company to have a software application hosted offsite via a rental fee. The advantages of an ASP are:

• Speed to market is significantly shorter.
• Reduced risk of project going over budget or not being delivered on time.
• No capital expenditures on technology infrastructure.
• Hosted software application.
• Dedicated IT personnel.
• Regular upgrades to system software and hardware.

Associated Risks: NOT Pursuing an LMS and an eLearning Portal

• Customer dissatisfaction and estrangement due to lack of understanding of new product offerings.
• Tech Support call volume increases due to lack of customer product training.
• Metrolist loses a chance to partner with an industry leader in eLearning content development and learning management systems.
• Metrolist customers lose a chance to quickly increase or augment their product knowledge skill sets to effectively service their clients.
• Alienation of geographically dispersed customer base who require training but cannot or will not attend an instructor-led class at Metrolist’s offices.
• Metrolist gives up a chance to “walk the walk” in terms of offering “best of breed” technologies to customers.

Associated Risks: Pursuing an LMS and an eLearning Portal

• Tech Support call volume does not decrease.
• The level of customer service could decrease due to personnel learning the new system.
• Significant marketing efforts would take away resource from MarCom.
• Integration of each system with NextGen products (somewhat mitigated by the selection of an off-site application service provider).
• Transitioning customers to efficiently use the new LMS system.
• Instructor-led training costs will increase if class attendance decreases.

Proposed Timeline

• January 2006: Send Request for Information (RFI) documents to vendors.
• February 2006: Evaluate RFI responses, craft Request for Proposal (RFP) document, and send RFP to selected vendors.
• March-April 2006: Evaluate RFP responses. Choose top three vendors and request face-to-face presentation.
• May 2006: Choose a vendor. Craft implementation plan (Program Management Office).
• June-July 2006: Begin implementation.

Deliverables

• January 13, 2006: RFI document sent to vendors.
• February 28, 2006: RFP document sent to chosen vendors.
• April 1, 2006: Devise presentation schedule; set up with chosen vendors.
• May 19, 2006: Craft implementation plan. Determine deliverables and dates.
• June 28, 2006: Begin implementation process.

Estimated Costs

A 2003 study by Bersin & Associates reported the average cost of LMS and LCMS implementation. The table below details their findings.

There has been a recent development in the market where prices are declining. A study of LMS costs by the Ministry of Education in Singapore (2005) found that the average cost of procuring an LMS dropped to between $20 and $50 per target learner in 2005.

With this more recent data in mind, a preliminary estimate chart is as follows:

Comprehensive LMS cost data is available from Bersin & Associates, as well as other leading independent learning consulting firms such as Brandon-Hall for a fee.

• A research study published by Brandon-Hall is entitled Low-Cost Learning Management Systems – 17 Products for Limited Budgets ($495) may help to clarify the process of procuring an LMS.
• Research report costs range from $0-7000 depending on the extent of information desired.

Recommendation

To obtain more complete data regarding costs, it is recommended that:

• RFIs be sent to potential vendors
• Metrolist purchase non-biased, empirical research documentation such as Low-Cost Learning Management Systems – 17 Products for Limited Budgets (Brandon-Hall).

Potential Vendors

The LMS and LCMS market has grown recently with more low-cost vendors entering the market place. The effect, as indicated above, is that average cost of implementation and maintenance continuing to decline.

Brandon-Hall, a leading independent learning consulting firm, surveyed customer satisfaction rankings for Learning Management Systems in 2004. The following table reflects the top ten LMS vendors in customer satisfaction:

Recommendation

• A Request for Information (RFI) document should be written detailing Metrolist’s needs and wants in a Learning Management System and/or a Learning Content Management System.
• The Training and Education Manager should then contact each of the top ten and send the RFI to them.
• Vendor responses to the RFI should then be evaluated and a short list produced of the top vendors to send a prepared RFP to.

References

Barron, Tom (2000). The LMS Guess. Learning Circuits. Retrieved November 17, 2005 from http://www.learningcircuits.org/2000/apr2000/Barron.htm.

Bersin, Josh (2003). Learning Management Systems: Usage and Implementation. Bersin & Associates.

Carter, Ryan and Lange, Mark (2005). Successful eLearning Strategies: Interactive eLearning for an Interactive Age. Entelisys Technologies.

Hall, John (2004). Assessing Learning Management Systems. Retrieved December 19, 2005 from http://www.clomedia.com/content/templates/clo_feature.asp?articleid=91&zoneid=29.

Ministry of Education, Singapore (2005). Results of LMS Profiling Survey 2005. Retrieved December 20, 2005 from http://www.moe.gov.sg/edumall/tpm/doc/lms_survey.pdf.

Moran, John V. (2002). Mission: Buy an LMS. Learning Circuits. Retrieved November 17, 2005 from http://www.learningcircuits.org/2002/jan2002/moran.html.

Date Submitted

December 29, 2005

Revision Number

1.0

Submitted By

Geoff Humphrey
Training and Education Manager