How To Calculate ROI of Your Moodle LMS?

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Last updated - October 14, 2022

Hey, Moodler! Thank you for spending your valuable time on your Moodle™ LMS, curating a great e-learning experience and positive e-learning outcomes for your students.

But have you thought about the ROI of your e-learning initiatives on Moodle™? If you haven’t yet, you should!

You should know how much value your courses provide to your student base. Finding the ROI of your Moodle™ LMS might seem like a complex thing to do. But it’s worth it because it tells you whether your hard work has paid off or not. 

The Mathematical Formula To Calculate The ROI of Your Moodle™ 

The definition of ROI of your Moodle™ LMS is the net profit you make divided by the total cost you spent on setting up and running your elearning courses on Moodle™, multiplied by 100.

ROI of Moodle™ LMS = (Net Profit/Total spending on the LMS) X 100

Things to Keep in Mind for Calculating the ROI of Your Moodle™ LMS

How accurate your ROI is, depends on two major factors:

  • Correctly measuring the effectiveness of your e-learning courses.
  • Analyzing engagement on Moodle™
  • Thinking about how to improve efficiency by saving resources without compromising the quality of training modules.

So, to start with, a good Moodle™ reporting plugin combined with a sound understanding of which metrics to consider, and which ones to ignore would form the basis of calculating the correct ROI of your Moodle™.

The ROI of your Moodle™ is calculated based on how you create an optimized elearning space for your learners in the best possible way. Evaluating the following parameters would give you a clear idea of the process of measuring your elearning ROI:

  1. Investment in the Moodle™ LMS setup
  2. Time spent on the courses and activities
  3. Percentage of enrollment vs completed in the course
  4. Time spent on the LMS by both teachers and students
  5. Revenue generated by your paid Moodle™ courses

1. Investment in the Moodle™ LMS Setup

You would first need to take care of the basic setup and configuration of Moodle™. This is important for you to know as it would help you get a smooth-functioning e-learning site up and running in minimal time, money, and effort.  Here are some must-haves you shouldn’t miss!

1) Disk space: 200MB for the Moodle™ code, plus as much as you need to store content. 5GB is estimated but the more the better.

2) Processor: 1GHz (min), 2GHz dual-core or more recommended

3) Memory: 512MB (min), 1GB or more is recommended.

4) Consider having separate servers for the web front end and the database

5) Moodle™ recommends using DB servers such as PostgreSQL, MySQL or MariaDB

Note

  • As per Moodle™ guidelines, it is a good idea to have 1 GB RAM for 50 concurrent users (minimum 256 MB) and minimum free disk space of 160 MB or more to store your teaching material. 
  • However, it makes sense to consider the entire combination of your hardware and software elements, to make a well-thought-out plan for your Moodle™ site, especially if it is going to be a large and exhaustive one.
  • When we say 50 concurrent users, you must analyze what kind of users they are going to be or what activities they will be doing on your Moodle™ site. 
  • Figure all of this out because users simply reading from the website won’t create a burden on the server. However, different users performing different activities would definitely exert pressure on the server.

Once you have installed Moodle™, you also need to create a database server using the guidelines here or follow this video for more details.

The next step is to install a good theme. Why? It’s the first important interaction checkpoint for your learners. So, it’s gotta be clean, simple yet catchy. Nailing the learner engagement game in your training begins here. 

Well, how you want to design your Moodle™ LMS is up to you and your brand needs. So, not picking a good theme isn’t an option. You could choose a free or a paid theme depending on how customizable, professional, and attractive you want your Moodle™ to look. 

And you don’t need to go on an internet rampage to find the right one. We have some of the best Moodle™ theme recommendations for you. 

Before you lose your patience, let me tell you the process is not over yet. Once the theme is finalized and set up, your courses will have to upload, followed by the gradebook configuration and uploading of users. 

And it doesn’t end here. Ensuring the following:

✅ Your LMS is not glitchy

✅ Courses are running smoothly

✅ Grades are being recorded

✅ Course and learner performances are monitored on a consistent basis

✅ Engagement on the overall LMS is analyzed 

This is a lot of work!

So, you need to map out the entire plan as to how you would go about laying the foundation for a well-executed and error-free Moodle™ LMS. It also depends on how much bandwidth you have – whether you want to do everything yourself using the free plugins in Moodle™. Or you want to simplify it using the paid plugins or you want to leave everything to the experts. 

This is the first step (No, it’s not optional). Calculating the most accurate elearning ROI is incomplete without this as it would be your first round of tangible spending on your LMS. So, estimating your Moodle™ site setup, design + LMS administration & data maintenance costs is a must. 

2. Time Spent on the Courses and Activities

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Another effective way to add to your process of calculating the ROI of your Moodle™ LMS is to measure the time spent on individual courses and the specific activities within them. This can be the yardstick for tracking engagement levels and proactive learning. 

If they engage well, they are more likely to persist through the course till the end. They would willingly come back to finish it on time. If they don’t, it means the ROI can eventually suffer as your learners would drop out more often. 

Based on the time spent on your courses and activities, every course creator should be focused on improving their course content, and creating thoughtful training lessons and activities inside courses. 

Protip – How can you measure the total amount of time a student has used studying in the course? There are options to see logs, like for example “All logs”, but this shows each separate log instead of the total time spent. And if you want to see this data per student, it’s slightly complex in Moodle™. 

If you have strong analytical skills, you could try and use the Course dedication block . But in case, you want to make your interpretations easier and more visual you can try out Edwiser Reports, etc.

3. Percentage of Enrollment vs Completed in the Course

This step is to prevent you from celebrating too early after your Moodle™ gets a flurry of constant course enrollments.  

It is a good thing in the short run. But how well you nurture your enrolled students once they start taking your courses could change your ROI game in the long run. The higher number or percentage of course enrollments on your LMS can only sustain or increase if your students enjoy studying your courses to absolute completion. If they do this proactively, there are high chances that they would re-enroll in some other courses you offer. Or best, they would even recommend them to others, increasing your visibility, growth, and revenue potential

4. Time Spent on the LMS by Both Teachers and Students

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Let’s say you’re running a training academy. For making students proactive and ensure smoother e-learning with better results, you would want your teachers/course instructors to be equally driven. Their engagement with the LMS whether positive or negative can be analyzed based on how much time they spend actively interacting with the Moodle™ site.

Things like, are your learners just casually browsing courses and activities on Moodle™ or are they really making good use of them, actively taking up e-learning tasks, for example, completing a reading class and attempting an assignment related to it. Check if they are able to unlock major milestones in their courses. 

Teachers should also spend quality time on the LMS pulling up important information or reports to gain a better understanding of learner engagement and learning. 

After all, it’s important to know if your courses are creating the desired impact or just inducing digital fatigue. Coming up with not-so-predictable, engaging courses takes time and effort. And improving the course structure to suit the pace of learning of different students is an additional overhead. So, counting them for calculating your online training ROI makes a considerable difference.   

Protip –  Edwiser Reports lets you analyze the time spent on courses as well as the LMS to get a good understanding of virtual interaction and engagement of students. 

5. Revenue Generated by Your Paid Moodle™ Courses

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At the end of the day, how much revenue you made would be the gamechanger. This would be your last step in the process of determining your elearning ROI for your Moodle™ LMS. The contribution of the four factors mentioned above would all eventually add up to help you get a fair estimate of how much you spent, saved, and earned. 

Extra unnecessary spending on any of these five steps mentioned in this article would affect the growth of the LMS, and in turn, bring down the value you deliver to your learners. 

Conclusion

How do you calculate the ROI of your Moodle™ LMS? Let us know in the comments below. And we’d also recommend you to check out Edwiser Reports for comprehensive graphical Moodle™ reporting without the headache of coding, SQL queries, or complex settings. 

Further Reading:

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