Learning Management Systems
UserView | 2015
Many businesses implement learning management systems (LMS) as a way to help train and educate new and current employees so they can succeed in their roles. To learn more about organizations’ use of these systems, what benefits and challenges they’ve experienced and their LMS investment plans for 2015, Software Advice conducted a survey of human resources (HR) professionals who currently use an LMS. This report will help potential buyers of LMS software learn more about this technology to better guide their purchase decisions.
LMS solutions provide businesses and educational institutions with the ability to manage online training and learning programs for their employees. By enabling consistent learning experiences, an LMS can help improve an organization’s ability to meet its strategic goals.
The evolution of LMS software is allowing more businesses to invest in and benefit from these human capital solutions. MarketsAndMarkets predicts the LMS market near $8 billion by 2018, with North America leading the marketplace in terms of revenue contribution.
While large corporations will generally have more resources to spend on an advanced learning system, an LMS can be a useful tool for a business of any size. This report will help potential LMS buyers gain an understanding of how their peers are currently using their LMS software to help them make a more informed decision.
When asked what functionality of their LMS software respondents use most, 73 percent say trainee testing, while 68 percent say training administration. Another 53 percent of users cite recordkeeping as the most used LMS functionality.
These findings correspond with the intended purpose of LMS software as a platform for developing and managing e-learning. They also align with the three main factors that drive companies seeking to adopt LMS software in the first place, according to Mark Brandau, vice president of solution marketing for SuccessFactors.
The first, Brandau says, is compliance-related training.
In this situation, “Either dictated by industry, by government, by internal codes of conduct—there is some compliance-related activity that organizations have to do,” he explains. “This forces them to say, ‘Listen, we have to provide some type of training that we can measure and account for.’”
The second reason is centered around talent development and management. In this situation, Brandau says, a company is looking to “increase workforce capability and capacity, to upskill employees and crosstrain.”
He continues, “They want to move their workforce in new directions and make sure that they are able to execute on the company goals and strategy.”
The third reason is centered around external audiences.
“Sometimes a company will want to help their partners, customers, resellers and/or supply chains better adopt and use their solutions,” Brandau says. “This is referred to as an external training environment. The company may want to set up an external portal where a partner or customer could come in and learn more about that company’s products and services.”
Overall, the majority of users surveyed say their LMS software has a “positive” or “very positive” impact on training operations. The organization of training content and efficiency in content delivery receive the highest ratings, with 99 percent of respondents saying each is positively impacted.
Close behind are the ability to track learner progress, the standardization of training and the ability of the software to reach more people and train more workers, at 98 percent each.
“To have an LMS and conduct training all over the world is a lot easier than having people travel for their classroom learning,” notes Madeline Honig, customer success manager at Litmos by CallidusCloud.
She goes on to explain that having a Web-based LMS allows organizations to reach a wider audience, which benefits both the learner as well as the organization or individual conducting the courses.
Based on this data, it is reasonable to conclude that organizations that adopt an LMS can expect to see a similarly positive impact on the effectiveness of their training.
While an LMS can benefit a business in many ways, like any type of software it is merely a tool; not a fix-all solution. We next asked the LMS users in our survey what the top challenges they experience with their system are.
The biggest obstacle is trying to integrate an LMS with other systems, cited by 32 percent as a moderate to major challenge. Users also cite a lack of customization (22 percent) and low user adoption (21 percent) to each be a moderate to major challenge.
According to SuccessFactors’ Brandau, a LMS should be easy to configure and integrate with other systems, including talent management applications such as performance management, succession and career development planning.
“[LMS software] is not an island unto itself; it has to have integration with other aspects of a business,” he explains. “With the cloud today, it can be and should be a very seamless experience.”
Customization, on the other hand, can be a challenge for both the vendor and the client to maintain. According to Steve Foreman, president of InfoMedia Designs, this is why there has been a shift away from highly customized, on-premise LMS solutions toward more configurable cloud-based solutions in recent years.
“If [vendors] get a request from a lot of different customers, and it is the same request, then they put it on their product roadmap and they build it into their core product,” explains Foreman.
In other words, many software solutions naturally evolve over time as multiple users request the same feature or tool. For a customer to bypass this timeline and require the software to be customized specifically to fit a specific issue at hand, Foreman says, the vendor has to branch their code and build a solution specifically for that customer—one that time has not yet shown to be applicable or marketable to the masses.
According to Jared Stein, the vice president of research and education for Bridge, an LMS provider, this can be an expensive venture. This is because the customer has to pay not just once, but every time the software is upgraded in order to maintain those customizations.
When asked about the challenge of low user adoption cited by respondents in our survey, Stein says that a simple, elegant design can help engage employees by getting them to focus on learning and developing rather than on special features.
“The number one problem you have to solve with an LMS, for corporate or for academia, is ease of use,” he explains. “It’s just got to be dead simple to use so that the interface and workflows don’t get in the way of what you actually want to happen, which is engagement and learning.”
Although many LMS vendors use mobility as a key selling point for their software, the majority of respondents in our sample access their LMS from a desktop computer (89 percent) or laptop (76 percent). Only 25 percent of users access their LMS from a tablet while, 19 percent use their smartphone.
According to Foreman, though some vendors use mobility as a selling point, the functionality on mobile devices often isn’t perfect. This is mostly seen in features such as scrolling, drop-down menus and scaling (a moderate to major challenge cited by 16 percent of respondents in the section above).
The eLearning Industry notes that, as advanced learning systems evolve, they’re increasingly moving to the cloud. This allows for better functionality and mobility, enhanced security and lower costs. Most importantly, it enables systems to be configured around both a company’s current needs and future goals, as opposed to customized narrowly to fit only their immediate needs.
According to Honig, this move to the cloud has essentially eradicated the previous lifespan of an LMS.
“For the most part, when customers come to us, they are [purchasing software] for the long term,” she says. “They’re not seeing an end to their project.”
Web-based systems meet companies' need for consistent, ongoing training for the long term because they're continually updated without requiring reinstallation. These systems are also more accessible for users, as they can be accessed on multiple devices.
To get a better understanding of the LMS market landscape, we also surveyed respondents on which specific system they use. Here, we find that the greatest percentage of respondents (25 percent) cite a product that was only mentioned once, compared to multiple mentions for the rest of the products listed below. The remaining products are cited by between 3 and 8 percent of respondents, with the exception of Litmos, which is cited by 21 percent.
Foreman attributes the wide variety of LMS products used to the fact that vendors specialize in different features or functions and service different market segments.
“There are three categories of LMS products that all call themselves LMSs, but they are very different types of products; they have different features and are oriented toward different customers,” he says. “This includes corporate LMSs, academic LMSs, and learning content management system (LCMS)/LMS combination products.”
Foreman goes on to explain that there are also vendors that specialize in different market sizes and cater their products to suit the needs of those businesses, be it small and midsize businesses (SMBs) or larger corporations.
The marketplace is also divided by vendors servicing vertical industries, such as those who orient their business toward only hospitals, manufacturing companies, or financial institutions. Products can also be organized around horizontal needs, such as an organization’s need for regulatory compliance.
Litmos’ Honig adds that the LMS market is particularly fractured because many vendors were initially formed because someone had a very specific need and either didn’t know where to look to find a solution, or was unable to find a solution that fit their needs. As a result, they simply created their own product.
“I think it was the need for something, and not knowing what it is—that’s how Litmos started,” she says. “Our co-founder’s father had a need for a training platform and wasn’t really sure what it was. So our co-founder built Litmos, and since then it has turned into an LMS.”
When we asked survey respondents about their future investment in LMS software, 45 percent say it is expected to moderately or significantly increase in 2015. Another 45 percent say their investment will remain the same.
These findings are consistent with a study cited in Forbes, which states that the market for LMSs is one of the fastest growing segments of HR software, currently estimated at over $2 billion and continuing to grow. This growth stems from the fact that organizations are suffering from a “capability gap,” or lack of skilled workers. To combat this, companies increasingly have to educate and train employees to reach certain standards.
The data here shows that companies recognize this need for training, and have either already invested in an LMS or are planning to do so.
Foreman has written extensively about how to successfully implement an LMS to avoid challenges and have the benefits associated with the software come to fruition. In the first of several articles in Learning Solutions Magazine, Foreman outlines five crucial steps to follow when evaluating and selecting an LMS.
First, a company must analyze its needs. Then, it should define the requirements it is looking for in a new system. Next, it should utilize product trial periods and vet available products. This will allow a business to evaluate products before making a purchase. Finally, after making an informed decision, organizations should select a product.
“You need to have a strategy,” Foreman explains. “Lead with a strategy to achieve your business goals and find a learning and training tool that not only supports, but drives your business goals.”
HR professionals in our survey report high levels of satisfaction with their LMS software. In fact, most report their organizations have seen enough of a positive impact that they plan to continue or increase their level of LMS investment in 2015. For potential buyers, this suggests that the purchase of an LMS solution has the potential to be a worthwhile investment that yields similarly positive results.
Top benefits of LMS software include more organized and consistent delivery of training material, which can lead to improved job performance, better retention of data and increased employee engagement.
As with any tool, LMS software must be carefully selected, implemented and utilized to yield positive results. Potential buyers should be sure to follow the recommended steps for successful implementation: analyze needs, define requirements and vet available products before making an informed decision.
Sixty-three percent of LMS users in our sample work for companies with 500 or less employees, with the largest percentage of respondents (20 percent) from businesses with 51 to 100 employees.
The remaining categories of employees (500 or more) are split fairly evenly between 10 and 15 percent. This suggests that SMBs are now utilizing and benefiting from an LMS in rates similar to those of larger corporations.
We found similar results when we looked at the annual revenue of LMS users’ companies.
Nearly 80 percent of respondents work for companies that had an annual revenue of less than $250 million. The largest group of users in our sample work for companies that have an annual revenue of $10 to $50 million.
To collect responses for this survey, we conducted an eight-day online survey of 15 questions, and gathered 155 responses from random employees primarily within the United States, but also within 11 other countries. We screened our sample to only include respondents who worked in HR and used LMS software at least monthly. Software Advice performed and funded this research independently.
Results are representative of our survey sample, not necessarily the population as a whole. Sources attributed and products referenced in this article may or may not represent client vendors of Software Advice, but vendor status is never used as a basis for selection. Expert commentary solely represents the views of the individual. Chart values are rounded to the nearest whole number.
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