Organizations invest a tremendous amount of time, money and effort in learning management systems (LMS) for employee training and development. It’s natural to want to leverage this technology when serving broader business audiences. That’s the logic behind the question. But in all honesty, the best answer is “it depends.”
If you’re wondering what the best solution is for your organization, consider these issues:
4 Issues That Determine Whether You Should Extend Your Employee LMS to Channel and Customer Training
The important point here is that you can’t take it for granted that your employee-oriented LMS provider has the functionality or experience you need. It’s important to verify capabilities.
That starts with a needs analysis and business case development. Ideally, you should document usage scenarios, required functionality and preferred business licensing models. Then compare vendor “apples” with other “apples.”
At Talented Learning, we focus on providing the information and education to help you define those requirements and create a usable comparison of cost and solutions proposals. A good place to start is our LMS Vendor Reviews where we document vendors’ high level extended enterprise capabilities. Our Case Studies page is a compilation of industry case studies found in our research. Talented Learning also provides personalized consulting services to help you streamline business case development, vendor selection and contract negotiation.
No matter how you choose to verify the functional capability, it doesn’t make any sense to proceed further with your internal LMS if they can’t do what you need or want. If they can, keep reading.
2) Business and Licensing Model
A common value proposition you will hear from your employee LMS provider is that there are economies of scale in licensing, maintenance and implementation, so from a cost standpoint, it makes sense to expand the existing LMS to external audiences. But you should take that claim with a grain of salt. Vendors are out to sell their software, and sales professionals know how to persuade and negotiate for a living.
Internal employee LMS solutions are priced in a tiered per-user model meaning that the cost-per-user decreases with more and more users. There is usually no cost delineation between frequent or infrequent users. If you are an employee, you need a license — pretty cut-and-dry.
With the tiered license approach, adding on the additional extended enterprise users at an ever decreasing price sounds cost effective and maybe so. However, most experienced LMS vendors abhor specifying future optional pricing in their contracts, so unless you negotiated the tiered cost in your contract, you are somewhat at the mercy of the vendor and their then “current” pricing and tiers.
To make matters more complicated, the number of external users is almost always significantly more than the number of employee users, and many of those external users may be one-time or infrequent users. Often this difference makes the “scale” of the internal and external audiences incompatible and puts the license and negotiating advantage most definitely in the vendor’s favor.
From a vendor’s perspective, there is already a line in the sand on what a user license is worth. You have already purchased and deployed their LMS for your employees and they want to hold onto the original scale.
A common sales strategy is to sell the extended enterprise solution by showing how much money the company would make or save in comparison to what the solution will cost to expand and try to divert your focus from the difference in scale and the fact of one-time and infrequent users.
Extended enterprise functionality may also require licensing additional LMS modules to support the multiple portals, language localization, social or ecommerce. Those cost implications can also make it tough to compare solutions as they scale.
By all of these above methods, existing vendors try to drive the maximum pricing point they can obtain and hold. They will leverage their advantage right up to the point you threaten to open up the bid with other vendors and then you will get the salesperson’s attention.
There has been a push the last few years from the smaller pure SaaS LMS providers towards unlimited use licenses, pay as you go, or royalty licensing that better aligns with extended enterprise usage. These shared risk and shared reward licensing approaches designed for external audiences with sporadic usage patterns have lots of fiscal advantages over trying to expand your existing incompatible license model.
You get to invest more in your content upfront vs. your infrastructure. You also only pay for what you use as you continually try to grow your solution. The easy-to-deploy nature of SaaS solutions neutralizes the cost of deploying focused channel or customer training.
Keep your vendor honest and invite others to bid on your project. If you have a higher volume of potential users, different usage patterns, additional functionality, the cost to support the extended enterprise could be a significant ongoing investment.
The cost to deploy a new standalone externally facing LMS may be drastically less with a vendor purely focused on extended enterprise vs. expanding your existing LMS. If you can enjoy the same cost savings or increased revenue, why pay more for your LMS solution? A vendor competition will always be in your best interest whether you decide to expand or purchase a standalone system for external audiences.
3) Political Considerations
A lot of internal LMS solutions are now part of larger integrated talent and performance management systems.
Naturally, these solutions are owned politically and financially by the Chief HR Officer in a corporation. Since many external learning efforts are led by marketing, sales or operational groups that don’t fall under HR, the possibility for conflict of interest arises.
Why? Once again, because the requirements are different, the external users need different functionality, access, workflow, content, reports and administration. If the external learning groups have to always work through internal HR to get what they want, it can be laborious and irritating for both parties.
Good LMS systems should be able to provide the ability to support both groups, but many organizations find it hard to do both at the same time with different owners or they simply can’t or won’t. If the extended enterprise learning is an extension of the HR, it really simplifies the political issues.
My recommendation is to determine the dynamics of ownership and determine whether usage of the system would be collaborative or dictatorial before deciding.
The need to share content from your internal LMS with external users is a very good business reason why you might leverage your internal LMS to support extended enterprise audiences. For example, if an organization can use the same proprietary sales elearning to train internal and channel sales executives, that makes more sense than developing content for these audiences separately and independently.
The content usually needs to be tailored to the outside audiences though. This could be as simple as branding the content for your large partners or as complex as integrating partner specific content into elearning.
If an organization is using an online Learning Content Management System (LCMS) to develop and maintain elearning content, the sharing process is technically feasible and practical including the tailoring of elearning content for different external audiences.
Conversely, if an organization is using stand-alone authoring tools like Articulate or Lectora, the sharing of content will be possible but tailoring will be painful and negate much of the content sharing cost advantage.
As part of the overall business case development for an extended enterprise LMS solution, the content strategy needs to be fully fleshed out. Organizations need to define what content they need, what content they have, how they are going to develop new content, update content, share content, tailor content and charge for content.
If there are opportunities to leverage and share content from the internal employee catalog, you should, but it doesn’t have to be the same LMS. Due to the SCORM, AICC and xAPI standards, content is easily portable from one system to another and with integration, disparate LMS solution can share and access the same content repository or LCMS solution.
At first blush, it would seem that the answer to “Should I use my employee LMS as my extended enterprise LMS?” would be yes — but don’t be so hasty. Take the time to reach a conclusion that is right for your organization. Create your business case, determine the status of the four areas above, and bring in some competition to drive the best response from the vendors as you evaluate solutions. Then make your decision.
Arguably, the extended enterprise LMS is going to have more visibility and more impact on your bottom line than a hard-to-measure internal LMS. Treat it accordingly.
How can you create strategic value with LMS-Salesforce integration? The world’s most strategic organizations do exactly this. But if your organization isn’t there yet, it’s not too late. How can you catch up and gain a competitive edge?
Join John Leh, CEO and Lead Analyst at Talented Learning, and Sandi Lin, CEO and Co-Founder at Skilljar, as they explain why and how you can realize measurable results by combining the power of a modern customer-focused learning platform with Salesforce.
In this dynamic one-hour session you’ll learn all the essentials:
What the Salesforce platform is and why it is vital to so many organizations
What Salesforce-LMS “integration” means
How to decide if you should use Salesforce-approved apps
Top ways to apply Salesforce-LMS integrations, illustrated with real-world examples
How to prove customer learning success from your integration efforts
John Leh is Founder, CEO and Lead Analyst at Talented Learning and the Talented Learning Center. John is a fiercely independent consultant, blogger, podcaster, speaker and educator who helps organizations select and implement learning technology strategies, primarily for extended enterprise applications. His advice is based upon more than 25+years of learning-tech industry experience, serving as a trusted LMS selection and sales adviser to hundreds of learning organizations with a total technology spend of more than $100+ million and growing. John would love to connect with you on Twitter or on LinkedIn.