Learning Management Systems
BuyerView | 2014

Every year, Software Advice talks with hundreds of companies looking for the right learning management system (LMS) for their organization. This provides us with unparalleled insight into the needs and wants of these types of software buyers. We recently analyzed 385 of our interactions with potential LMS buyers in 2013 to identify their most common pain points and reasons for seeking to purchase new software. This report outlines what we found.

Key Findings:

  1. Over one-third of all prospective buyers (36 percent) were using manual methods to train their employees when we spoke to them in 2013.
  2.  
  3. For buyers who were already using an LMS, the most common reason for wanting to replace existing software was a need for more advanced functionality.
  4.  
  5. Meanwhile, most buyers wanted to replace manual training methods with an LMS in order to improve efficiency.

Most Buyers Using Manual Training Methods

Of the prospective buyers we spoke with, 36 percent noted they were using manual methods to train their employees—meaning they were conducting in-person training sessions, and using paper and pen (or Excel spreadsheets) to track course completion rates. Another 10 percent noted they had no training system in place whatsoever. Meanwhile, approximately one-third (32 percent) of participants said they already had an LMS in place.

Current Methods of Training Employees/Clients

Current-Training-Methods

Existing Software Users Seeking More Functionality

Drilling down into the data, current LMS users most often cited a need for more features and functionality as their reason for seeking a new system. The next most common reason: unhappiness with their existing software. During our interactions with these types of buyers, they often noted that their system was too complex or confusing for employees to use effectively.

Reasons for Replacing Current LMS

First-Time Buyers Looking to Improve Efficiency

While LMS users were seeking a system with more features and functionality, by far the most common reason first-time LMS buyers gave for replacing manual methods was to improve efficiency. Many noted they were spending an inordinate amount of time tracking trainings on paper or in Excel spreadsheets, and were looking to streamline the process with specialized software.

Reasons for Replacing Manual Methods

Reasons-Replace-Manual-Methods

Most Buyers Looking to Manage Existing Training Content

Most LMS buyers said they were looking for a system where they would be able to upload and store training content they had already created. While content authoring was also a commonly requested feature, many buyers noted that it was a “nice to have” option, and said they would still consider systems lacking the ability to create content directly in the LMS.

Next on buyers’ wish lists: the ability to track training progress. As mentioned, many businesses reported they were using manual methods to track which employees had finished specific trainings, and were looking for a way increase efficiency by automatically monitoring completion rates.

Features Most Commonly Requested

Commonly-Requested-Features

Buyers Prefer Web-Based Software

The vast majority of the buyers we spoke with (76 percent) expressed a preference for Web-based software, while only 6 percent specifically stated they would prefer an on-premise (client-server) system. Many of the buyers we spoke with also noted that both trainers and trainees needed to be able to access the LMS remotely. This is likely the reason so many software buyers preferred this deployment type: Web-based LMS systems are accessible from any device with Internet access.

LMS Deployment Preferences

Most Buyers Looking to Implement in Six Months or Less

In addition to questioning buyers about their deployment preferences, we also asked about their timeframe for implementing a new system. Our data suggests that most buyers begin doing research only when they have decided to purchase and implement their new software in the near future. Well over half of the buyers we spoke with expressed a desire to implement a new LMS within less than 3 months.

Buyers' Timeframe for LMS Purchase

Timeframe-LMS-Purchase

Most Midsize Buyers From Highly Regulated Industries

Our sample set comprised a wide range of business sizes and revenues. It seems that all business sizes can benefit from a learning management system. However, the largest segments of LMS buyers were from companies that fell within the range of 101-1,000 employees.

Demographics: Buyer Size by Number of Employees

Buyer-Size-Number-Employees

When sorting potential buyers by their annual revenue, over a third of businesses generated between $6 million to $25 million per year. This finding is somewhat surprising, as these are relatively small businesses.

Demographics: Buyer Size by Annual Revenue

“buyer-size-revenue”

Finally, we found that many of the buyers we spoke with operated in highly regulated industries. In fact, healthcare and manufacturing companies constituted 22 percent of our data set.

Demographics: LMS Buyers by Industry

LMS-Buyers-by-Industry

Methodology

In 2013, Software Advice analyzed data from 385 businesses seeking to buy new LMS software, giving us a five percent confidence interval (95 percent confidence level) for all LMS purchases nationwide. To further discuss or obtain access to any of the charts above, feel free to contact me at erin@softwareadvice.com.


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