4 Corporate LMS Flavors: Which Do You Choose?

If you follow news and analysis from Talented Learning, you know the thriving LMS market includes more than 800 vendors. These solutions can be grouped roughly into 4 categories:

• Corporate
• Academic
• Association
• Continuing Education

You’ll find some common functionality across all these categories. For example, all systems incorporate tools to help you manage learning content and users. But each type of LMS is designed to address unique use cases. That means functionality and integration with related software often vary from platform to platform.

Also, each solution has risen from unique vendor expertise and experience that doesn’t necessarily inspire the others. This uniqueness is what differentiates each type of solution. It is also what is fueling recent LMS innovation.

To give you a taste of the many learning systems variations and pockets of specialization, let’s look closer at the diverse corporate LMS market.

Corporate LMS Market Snapshot

For many years, less than 12-15 platforms ruled the corporate LMS space. All were similar, viable, one-size-fits-all solutions.

A Rapidly Growing Range of Choices

Now, hundreds and hundreds of vendors compete in the corporate LMS market. These vendors range from tiny, regional, cloud-based startups to global software conglomerates.

The business focus of the LMS could be compliance, talent development, enablement, commerce, or a combination of use cases.

Some vendors have full professional service teams to manage systems implementation and  integration. But many other systems are based on a self-service implementation model. While a handful of corporate LMS options are free, a high-end platform can cost more than $100/user/year.

Niche vs. One-Size-Fits-All

Today’s heterogeneous corporate LMS buyers have highly diverse needs and have learned painful lessons from the past. One-size-fits-all solutions are great when a company simultaneously has lots of learning problems, locations, business units, and learning audiences.

But if a buyer has only one audience and a laser-focused business use, a one-size-fits-all is likely to be too big, bulky and expensive. Discerning, educated buyers want specialized vendor solutions to help them achieve their goals better, faster and more cost effectively.

The Extended Enterprise LMS Buyer: Rogue and Rarely in HR 

Extended enterprise learning is any type of education an organization provides to external audiences – including customers, prospects, channel partners such as dealers, franchisees, distributors and others. This helps organizations generate measurable direct and indirect income, improve customer satisfaction and expand their global reach.

Internal employee audiences may also be part of this equation. However, those responsible for educating customers and partners are from business units or functions that don’t include HR.

This creates a clear gap.

Purchasing decision-makers for employee learning systems are typically in HR or training department roles. In contrast, the purchasing point for extended enterprise LMSs is typically in sales, marketing, product management, channel management, or customer service.

Specialized extended enterprise LMS vendors know this. So, they have developed solutions specifically targeting extended enterprise use cases and budgets.

With unique audiences and non-HR purchase points, these vendors leave employee learning solutions behind to serve rogue extended enterprise LMS buyers. Of course, this may mean an organization invests in multiple LMSs – often without even knowing it.

Is this a problem? Well, LMS vendors aren’t complaining.

The diversity of employee vs. extended enterprise learning needs and audiences has contributed to the explosion of specialized LMS platforms shaping today’s corporate LMS landscape.

4 Corporate LMS Flavors

Interestingly, there is no universal blueprint that shows which vendors target each of the corporate LMS audiences. But with some effort, you’ll find numerous niche strategies.

In my opinion, this suggests there’s ample room for multiple competitors in today’s corporate LMS market. Here is a high-level snapshot by audience category:

CORPORATE LMS MARKET

Source: LMS Almanac

Our research points to at least four distinct corporate LMS categories:

• Employee LMS – The original LMS, used for employee compliance, training automation, and in some cases talent management. Employee LMSs are often considered “boring” and “LMSy” by end users. This is primarily because the compliance training these platforms manage is mandatory.

• Channel and Partner LMS – Modern learning platforms are designed to develop, grow and certify external sales and distribution channels. This includes dealers, franchises, retailers, contractors and other business partners. Channel LMSs provide the most measurable and predictable ROI of any type of corporate LMS. That’s because they make it easy to compare sales performance of trained partners with those who haven’t completed training.

• Customer LMS – These solutions designed around ecommerce and integration with CRM solutions. They are adept at helping organizations attract prospects, educate new customers,  and develop loyal, satisfied customer relationships. Because customer-centered LMSs are built to work as “learning marketing systems,” they feel more like commercial-facing solutions than employee compliance systems.

• All-Purpose LMS – These systems are built to support any or all of the above audiences, simultaneously. All-purpose platforms are the biggest, most comprehensive, most configurable kind of corporate learning system. However, they can seldom can do it all with high quality. Too often, these systems are like a jack of all trades, but a master of none. Also, they can be costly to license, implement and support. But when deployed correctly, they offer significant economies of scale in cost, licensing, and content sharing.

Key Takeaway

You’ll find a big difference between what an LMS is designed to do, and what it actually can help you accomplish.

Many corporate LMS vendors think their solutions is all-purpose, when it’s really just an employee LMS with external users or B2C commerce. Pure extended enterprise vendors bring a new level of functionality to the table. Expect unique ecommerce functionality, flexible interface design, social capabilities, marketing automation, and even web development expertise. All of these are typically overlooked in HR-oriented learning systems.

What else sets these systems apart? In future posts, we’ll dig into each of these 4 types of corporate LMS platforms. So stay tuned for more details about each type’s unique characteristics, use cases, top vendors, and more.

Conclusion

What does all this learning system category analysis mean? Why does it matter?

LMS vendors are now carving out a competitive edge through specialization. Generalists tend to compete on price and broad functionality, while LMS specialists compete with incremental capabilities that add value by helping customers move the business needle.

For LMS buyers, this new market means more buying complexity. But it is also an opportunity to find learning partners who can help your organization compete more efficiently, effectively, and profitably.

Sure, you can find a generic LMS to manage learners and content. But if you want to use learning technology as a competitive differentiator, consider a specialist flavor. With the breadth and depth of variety available, this is a wise strategy. (And it’s also a fascinating time for me as an LMS selection consultant.)

Thanks for reading!

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