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by Brian Westfall,
Market Research Associate
Last Updated: September 29, 2016


A learning management system (LMS) automates the administration, testing, tracking and reporting of learner progress through online courses. This guide will help you navigate the LMS software market so you're armed with everything you need to know in order to make an informed buying decision for your organization.

Here’s what we’ll cover:

What Is a Learning Management System?
Common Features of Learning Management Systems
What Type of Buyer Are You?
Learning Management System Pricing
Market Trends to Understand

What Is a Learning Management System?

LMS software helps educational institutions and businesses better manage their online learning programs—which can be an incredibly effective way to improve employee engagement and retention while increasing employee skill levels. Rather than having to manually manage and track all of the workflows that are involved with ensuring employees have access to and complete learning programs, LMS systems help automate the entire process, from start to finish. Functionality includes:

  • Creating curricula and learning programs to educate students and/or employees in specific areas of knowledge or to teach them certain skills.
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  • Tracking the completion of such programs to ensure students and/or employees are staying on schedule.
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  • Allowing students and/or employees to demonstrate competencies or gain certification in areas relevant to their role.
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  • Providing analytics and reporting functionality to give organizations more insight into the success of their training or learning program(s).

Common Features of Learning Management Systems

lms common features

 

Certification and compliance management Includes setting up, tracking and managing certification programs for industries that require employee certification to perform a specific job duty. This also manages compliance training, which could be a need for any industry.
Learning management Helps users organize and simplify training or learning administration, which includes processes such as distributing content, managing user information, scheduling and overseeing course enrollment.
Virtual classroom Many LMS platforms include video conferencing functionality, enabling instructors to lead live, remote classes and trainings through the platform.
Course library Some vendors partner with training content creators to provide a pre-made library of training courses for generic training needs, such as those on sexual harassment policies or management techniques.
Extended enterprise Allows organizations to train or teach external users, such as channel partners or customers. E-commerce functionality may be included here, as well, to allow training courses to be sold externally.
Proficiency testing and reporting Allows users to administer tests to gauge employee/student knowledge or skill. Analytics and reporting functionality helps determine proficiency and identify learning gaps.
Content authoring Gives users the ability to author their own content and design and deliver courses within a LMS. E-learning authoring tools are often part of an LMS; learning content management systems (LCMSs) that facilitate the creation and storage of course content can be integreated into an LMS package as well.

What Type of Buyer Are You?

Before purchasing a system, you should assess what kind of buyer you are. The majority of buyers fall into one of these categories:

Education-industry professionals. Perhaps the most obvious buyers of learning management software are those from schools and universities: organizations where the entire purpose is facilitating the spread of knowledge. Many courses at university levels—and, increasingly, even at the K-12 levels—offer students access to syllabi, assignments and testing information via Web-based LMSs created specifically for the education industry. Education LMS products can be purchased on their own or as a core component of many K-12 software solutions, along with other applications such as school accounting and student information systems (SISs).

Corporate training professionals. LMSs also have a strong presence in the corporate training sphere. This is especially true in highly regulated industries where employees need to maintain specific certifications or licenses to comply with industry or government standards, such as aviation or food preparation. Just as there are LMSs designed specifically for use in schools and universities, there is also LMS software specific to the needs of corporate trainers, which might include functionality for performance reviews or e-commerce. Corporate LMS products can also be purchased on their own, or as part of a more comprehensive human resources (HR) suite.

Learning Management System Pricing

LMS software is usually priced based on two factors: the number of users and the functionality included. The more people you have using the system and the greater the depth and breadth of functionality, the higher the price.

As an example, many vendors offer tiered pricing plans. With the first, most basic tier, buyers might pay a monthly fee so a small pool of users would have access to basic functionality and services, such as content creation, course enrollment and limited email support from the vendor.

As the price scales up, buyers can add more users to the system, while receiving more advanced functionality or services on top of what is provided at the lower tiers. These additional capabilities might include reporting and analytics or live phone support from the vendor.

In some cases, users can buy a license to own the software in perpetuity. More commonly, though, users can expect to pay a monthly or annual subscription fee for the software.

Subscription pricing is more common with cloud-based systems (where the LMS is accessed via Web browser), whereas perpetual licenses are more common with on-premise solutions (those installed by users on local servers). Most LMS products today fall into the cloud-based, subscription-priced category.

Market Trends to Understand

Workday announces Workday Learning. In September 2015, HR software vendor Workday announced they were entering the LMS market with Workday Learning, a new application as part of their human capital management and financial management suite offerings. Workday Learning will be made available to customers later this year.

The rise of the MOOC. MOOCs, or massive open online courses, represented a big area for employee training growth in 2015. These ongoing online courses that can be started and completed by employees at their own pace are part of a bigger trend to allow employees more flexibility in their training outside of a classroom.

Cornerstone OnDemand partners with TED. In June 2015, LMS vendor Cornerstone OnDemand announced that they were partnering with popular nonprofit TED to deliver the organization’s popular TED Talks to Cornerstone clients. Users will have access to curated TED Talk Playlists within Cornerstone Learning designed to enhance employee training efforts.

Free Download:
Learning Management Systems Pricing Guide

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