LMS Business Model for Associations?

Let’s face it. There’s a wide expanse between the  free, open source LMS systems (Moodle, for example) and expensive, proprietary systems currently available. Despite the appeal of downloading a free application or program, open source systems require someone with programming savvy to make them work — a resource most small associations don’t have.

Wouldn’t it be great to find a system that fits our needs — and our budget? Something that’s affordable, based on a realistic view of the number of learners we’re likely to serve, rather than some number we have to come up with — then meet — to justify the investment, then balance the budget?
“I too have been frustrated by the lack of offerings for people who don’t have huge budgets available,” says Chad Gent of LearnGauge.

To their credit, Chad and his colleagues are seeking that rather elusive balance between staying in business and serving their customers, including associations and non-profits.

In addition to providing consulting services, LearnGauge offers to learning system options:

“We have our own Continuous Learning System (CLS), which is a Learning Management type system that operates differently from a traditional LMS,” according to Chad. “The Continuous Learning System has a program-based focus instead of the more common LMS approach that simply makes a bunch of existing content available.”

If the CLS is anything like the demo of a beta he showed me awhile back, this could be the system you’re looking for if you want to combine access to online learning that’s bundled with social learning options. Very cool and exactly what most associations are looking for — a way to build connections and dialogue around online learning events.

LearnGauge also offers a “barebones” LMS for limited budgets. I won’t pass on the pricing he mentioned, as your situation could be different, but I will say that it can be far, far below the prices mentioned in the Tagoras report and elsewhere (see “LMS = Losing My Smile” for more).

But here’s the best thing about LearnGauge, and why they’re deserving of a post when I normally shy away from “promoting” specific vendors:

They’re willing to work with you if you’d like to form a consortium, pooling your funding and resources, in order to save cost.

If the system is like the one I saw, each association’s learning offerings would appear to be launched from its own system, with your own branding and unique course offerings.

Too cool.

Oh, and have I mentioned that the model isn’t so new that it hasn’t been tried and worked successfully? If you’ve heard of the Sakai Foundation, you already know of such a consortium model (BTW, Sakai also offers an open source LMS).

So if it’s looking more and more as though your competition for members-as-learners is closing in (or, worse, leaving you in the dust), consider giving them a call. Setting a meeting. Finding out if they’d be willing to partner with you.

The system is there. All you have to do is show up.

For more information about what your options might be, please contact Chad Gent at LearnGauge directly at cgent@learngauge.com.

LMS = Losing My Smile

[Association LMS Vendors, Take Note!]

Every time I see a report that shows what an organization can expect to spend on an LMS (learning management system), I lose my smile. Worse, I want to hang my head and weep.

In her “Building the Business Case for e-Learning,” published by the eLearning Guild, Temple Smolen writes, “Most off-the-shelf LMS products require some customization. The costs can vary widely for a LMS with customization, but under $100,000 is a reasonable starting assumption for most organizations with less than 2,000 employees.”

Ikes! Those prices!

But wait — there’s more!!

Notice the word “employees”?

It’s fair to say that most LMS providers are still oriented to delivering learning modules via an LMS to employees — individuals within the same corporation. The corporate business rules often allow LMS costs to be leveraged across various departments in ways that associations cannot model.

For now, let’s ask the companies providing instructor-led options to stand aside (companies such as Blackboard, CommPartners, etc.) and focus on LMS systems that facilitate asynchronous, online access to uploaded courses and tutorials.

As colleagues of mine know, I’ve been advocating for an association-specific alternative for a long time. We need something that reaches past our staff offices so our statewide, national, and international members can easily and affordably access.

Doesn’t have to be fancy, but it does have to work.

Did I mention the need for affordability, too?

It’s funny how what seems like a few dollars to many LMS providers adds up a lot faster on our side of the table.

Let’s take the data Jeff Cobb and Celisa Steele at Tagoras uncovered in their Association Learning Management Systems report (October 2009), which showed that for small associations, the average start-up cost for an LMS was:

 $50/user/year (at the low end)

Sounds reasonable.

Until you do the math:

$50 x 1000 members (we assume 1/2 our members might access?) = $50,000/year!!

Double Ikes!!

And don’t tell me to add that $50 onto the registration fee.

Because that $50 will be on top of marketing costs… and any revision costs we’ve set aside in case there’s a boo-boo we need to fix or an update we need to add… or any other items we need to include in our overhead (pay extra for e-mail service? how about registration processing fees through an outsource agency?)…

It’s not like we can charge that much money for an online course in the first place (though some organizations do — you know who you are; that’s why I haven’t signed up for your online courses).

Ready? Let’s walk through a one-year budget for one online course (after development).

Cost of doing online business (marketing, updates, etc.) = $1200/year
Hosting fee/LMS fee = $50,000

Total = $51,200

Now let’s say I think my members would pay — AT MOST — $200 for a course. That means I need 256 learners EACH YEAR just to BREAK EVEN.

But that’s not all!!

According to the Tagoras report, the average cost per learner goes down only slightly over a three-year average, so you can’t expect much savings over time.

This is too bad, as associations are generally known as loyal clients and willing references to other associations seeking services and products.

Something that will bring my smile back is a business model for LMSs that suits small associations and non-profits, not just large organizations.

One company is listening — and is willing to work with associations to forge a partnership that will help alleviate costs while providing quality LMS service.

More about this company and its program for associations and non-profits in the next entry.

ROI? ROE? EVA?

In the eLearning Guild’s 2009 white paper, “Building the Business Case for e-Learning” Temple Smolen writes, “In an April 2009 survey of eLearning Guild members, 48% reported a positive return on investment (ROI) from e-Learning, while only 5% reported no return or a negative ROI. In fact, not only do most members generate a positive return, but 50% report a ROI greater than 15%.”

For advocates of alearning, this is a great sliver of data.

But is ROI always the best thing to be measuring? How about measuring how successfully we delivered what our members expected? Or how about determining if the investment we’ve made in elearning really paid off more than offering the same content in a face-to-face format?

As with all things, you need to know what your original success criteria were before you determine if you met them. (Sounds obvious, but come on, haven’t we all measured success without a baseline one time or another?!?)

If you want to demonstrate to your board of directors that the investment you made in alearning will break even or generate revenue, then an ROI is a great measure. The formula for ROI is Net Benefit/Cost. The Net Benefit could be cost savings or revenues. You also want to consider whether your costs should be recovered within the year or over a longer period (for example, the cost of hiring a Webinar production company should be recoverable within the year whereas an LMS investment should be calculated over several years).

Measuring expectations is a little different and unless there’s a formula for ROE (return on expecations) I don’t know about, you’ll need to be more creative. Let’s say you introduced elearning and expected it would engage otherwise non-active members. Start with the number of members who did not participate in an online offering and, over time, measure the change. Let’s say 40% of your 2000 members (800) were non-participants in learning offerings prior to online learning. After the first measurement period (A month? Six? Twelve? It’s really up to you), 40 of those members took an online course (5%). You could say that you’ve experienced a 5% return on your expectation.

According to Smolen (who cites Wikipedia), “For people in finance, EVA (Economic Value Added) is considered a more accurate measure of profitability” because it “is a measure which assumes there is an opportunity cost to the money you are investing, and it might yield better returns elsewhere. The calculation allows for an adjustment to compare one project to a hypothetical alternative investment.”

In other words, if you want to, you could use EVA to calculate the variance between what your elearning investment has delivered versus a face-to-face (FTF) version of the same course. You need another piece of the financial picture for this formula than you do for calculating ROI:
(Net Benefit – Cost of Capital) / Cost Investment = EVA

Her white paper provides all the details for making this calculation (or see Wikipedia for an explanation there).

Here’s an alternative: Let’s say a FTF program is suitable to adaption online. In the FTF format, because of overhead, the program costs $30,000, reaches 30 learners, and generates $2000/year in revenue. It costs $1000/attendee (in association costs; costs to attendees for travel, lodging, etc. are separate and not included because of the wide variance in calculating them). Your waiting list for the program is long, with many people dropping because the program is only held once each year.

After calculating the cost of development, you determine that an alearning version of the program would cost $60,000 but because it’s online, you can allow any number of members to access it at any time. You decide that your members would be willing to pay $200 for a year’s access. If you have 150 people register over two years, you’ll earn back your investment.

If your alearning offering will still be viable after three years, and/or if you know at least 75 people per year will register the third year (assuming 50% attrition because the offering doesn’t have the shine of a new penny anymore), you stand to gain $15,000 in revenue. Okay, subtract some ongoing costs for your LMS, marketing, and other stuff, and your revenue shrinks, but it will still generate more than the $6000 over three years that the FTF session delivers.

Finally, over three years, your cost per learner is just $160, rather than $1000.

In the long term, your alearning offering will reach more people and do so at a much lower per-member cost, even though your up-front investment will be twice as high.

ROI isn’t the only financial measure that you should calculate and consider — EVA might be more appropriate. And when it comes to our members — ROE should always be considered!

Working Weekends is BAD for You!

Have you seen the TV commercial with the three skiers on the lift, each with their app-infested phones? At least one is doing something related to work… 

Then there’s the commercial showing a man poolside on vacation who tries to hide his laptop but his wife finds it anyway when she almost sits on it?

These commercials make me crazy.

Too many of us are working around the clock, seven days a week. We’re the “constantly connected” generation of employees — thanks to e-mail, the Web, and the thousands of cool apps that make staying in touch with what’s going on “at the office” much easier.

Some of this is the result of an increasingly competitive attitude among workers – Who’s working the longest hours? Who is most deserving of the limited bonus pay? — The result of a depressed economy and the need many people feel to prove their worth.

Our society encourages all of this — not only are there commercials galore touting the advantages of 24/7/365, wider, broader, faster access, but even “60 Minutes” had an episode about how the workweek is going away.

All of this is framed in a very positive light: see how cool it is to be constantly connected? See how much we need to be globally competitive?

At the same time, Americans are experiencing higher stress (and all the physical ailments associated with it), less sleep, and higher levels of obesity than ever before.

We’re killing ourselves, working all of this overtime.

It’s the slow suicide of at least one generation of Americans — probably more as time presses on.

Don’t try to tell me you’re one of the innocent ones. You know you haul books, magazines, and articles you found on the Internet home to read over the weekend. You trot your laptop back and forth to the office every day (or keep your cell phone on) so you can keep track of your e-mails,

Confess it: you’re worried you’ll miss something.

The fact is, you’re not likely to miss anything.

Yes, we all have the occasional emergency. We all have the now-and-then weekend meeting.

But how much are you contributing to your own overtime? How efficient are you really being with your time? (See “Running Out of Time”)

How unhealthy do you want to be?

Because recurring, refreshing breaks — e-mail and cell-phone free weekends and vacation — are imperative if you want to stay healthy.

And focused.

Case Study, a True Story:

Before I worked for an association, I worked as a project manager (among other roles) at a company that developed Web-enabled elearning. The company also had teams of programmers building learning management systems (LMSs) for companies including some major US auto manufacturers and phone service providers.

These were multi-million-dollar projects. They had intense deadlines.

When I walked through their cube area, I marvelled at how such amazing computer feats could be summoned from the brains of these code magicians. Everything we produced — from the LMSs to the elearning courses — came from the creative talents of the employees.

Take the employees away, and all that would be left was a building of desks and computers. Unlike a manufacturing company, where if one worker goes away you hire and train someone to stand at the machine and perform the same tasks, these programmers and developers and graphic artists and writers were not so easily replaced. Their project knowledge alone was critically unique.

When a very major project started to go very wrong, these people were asked to work more hours — some logged over a hundred hours a week. Think about that: 7×24 = 168 hours in a week. Working that much means you’re doing nothing except driving to and from work, catching a few hours of sleep, showing, changing clothes, and working more than 14 hours a day inbetween.

The demands started slowly — just give up this weekend. Just work an extra hour a day. Now we need you to work Saturdays.

Then vacations were denied. Six-day workweeks became mandatory.

The company started ordering in pizza and sandwiches for lunch and dinner so no one would have to leave. They kept coffee flowing for free and charged just 25 cents for a can of pop.

Those not on the team started volunteering to help. They didn’t have the same skill sets, so they couldn’t help write code, but they could walk dogs, feed cats, do laundry.

Marriages ended. Affairs started. One Web developer was hospitalized.

And every day I walked into the office surprised to see that everyone who was physically able — and some who weren’t — kept showing up.

We’ll push ourselves too far sometimes.

We should stop.

Because here’s the rest of the story:

For all their hard work and dedication, the programmers started making errors. They didn’t realize it — they were too sleep deprived and malnourished to notice. They were burnt out.

Our bodies will work past our brains sometimes (you’ve heard those stories of heroic rescues where people say they didn’t even think — they just acted).

We need to feed our brains. We need nutritious food. We need sleep.

And we need to give our brains a variety of things to think about. To see. To experience.

The programmers couldn’t do that in their cubicles, not after weeks and weeks of staring at the same screens in the same building surrounded by the same people.

Association professionals can’t do that, either.

We need evenings that are our own — our time to laugh with our loved ones, swim at the Y, take dancing classes, or relax with a good novel.

We need weekend strolls in the park, shopping in the mall, movies on the big screen.

We need vacations that take us places we haven’t been before, to visit places we aren’t planning as locations for future educational events.

We need to let our minds — and our spirits — rest.

To do less is to risk burnout.

Because if you burn out, what good are you to your organization?

What happened to that LMS project? Well, eventually it got delivered to the client, but the cost was far too high for the company to bear. The corporation decided to excise this now unhealthy chunk of the company as if it were an infected tumor or a cluster of cancerous cells. The monitors went dark and the doors closed forever.

How does all of this relate to alearning?

Recently, a colleague at a small-staff organization sent an e-mail about the aLearning book, and in our exchange she mentioned the challenge of getting so much done with so few resources.

You can’t implement an alearning strategy without the time to do it. You can’t maintain online learning options without the energy to sustain it.

As association professionals, it’s important to focus on our members and what they want and need. But if we don’t focus on ourselves, too, we’ll never be in a position to give them that.

So, are you ready to turn off your e-mail for the evening? Stay away from your laptop for the weekend? Book yourself a week’s vacation (better yet, two weeks) to get away for awhile?

What’s stopping you? Why is committing slow suicide the highest priority in your life?

Give me one good reason.

Running Out of Time

“There’s just not enough time!”

“Where’d the day go? Seems like nothing on my to-do list got done!”

You’ve heard all the tips about time management — have probably even led sessions on the topic. We know to plan our time, prioritize, make the most of delegation, etc. etc.

Don’t shrug them off!

I’ve said it before and I’ll say it again: Your TIME is a valuable association resource. Think of it as another thing your members are paying for when they send in their dues — the association magazine, the discounts — and your expertise.

Make the most of that member benefit — your time — in every way you can. Here are a few ideas:

• Maybe you’ve seen this  handy cue-card before (above). Though your Importance/Urgency blocks would probably differ than this example, the chart itself is an excellent reminder that you don’t have to answer every e-mail immediately; some phone calls can be returned rather than answered directly. Take a few minutes to create your own time management matrix, laminate it, and prop it next to your phone or computer screen. Respect it and live by it.
• Track the data. Not only will it will provide important evidence for the success of your programs, but it can — and should — be used as evidence when you campaign for staff assistance or other resources.
• Watch the calendar. When do you most need help? Are there tasks a temporary worker could handle for a short period of time so you’re free to attend to other responsibilities? Think about the best uses of your time for what your association invests in you. Where can you make your time work more efficiently, task-to-dollars? (See the post on Best Resolution You Can Make)
• Set aside the time you need — and do it without guilt. If you need to draft an elearning strategy, revise your curriculum to meet new competencies, or complete other tasks that require concentration, don’t be afraid to close your office door, have your calls held, or ask for time to work away from the office. Turn off your e-mail.

You were hired for your expertise. Your special knowledge and skills. Require your association to make the most of what you have to offer.

Sometimes they’ll need your help to do that, so take the lead, create the environment you need to get those important tasks checked off your to-do list.

What are you waiting for?