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The Hidden Cost of Qualifying LMS Vendors

What is the hidden cost of qualifying learning tech vendors yourself? Analyst John Leh explains

Last week, I relearned the same costly and time-consuming lesson I’ve learned many times before.  It looked like a leaky pipe.  Simple enough.  But instead of calling a plumber to repair the problem, I changed into my DIY hero suit, strapped on my tool belt and magically transformed a professional plumber’s 30-minute fix into an all-day, three-trips-to-the-hardware-store mess.

It seemed like a no-brainer decision.  I expected to save at least $150 on a plumbing bill.  Easy money.  But by the end of the day, I had cost myself so much more in lost time, materials, productivity — as well as the skin on my knuckles and peace of mind about the quality of my workmanship.  In the end, I walked away wishing I had made the call and let an expert save the day.

The same thing happens every day with qualifying LMS vendors.  Buyers worldwide strap on their “qualifying” tool belts to try to determine which of the 500+ LMSs they should include in their proposal or RFP process.  Do you know what it costs to qualify an LMS vendor?  Let’s find out.

A Typical Scenario:  LMS Vendor Qualification Gone Wild

Does this learning technology purchasing process sound familiar?

You work for an organization that creates and sells continuing education training for financial and insurance professionals.  You are looking to replace your LMS to manage your growing global training business, content and audiences more effectively and efficiently.  You have been running a homegrown Moodle LMS system for years but have outgrown it on a multitude of levels.  You have an idea of what you want, need and don’t want in your new LMS but mainly through the lens of your existing LMS.

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To complicate matters, your LMS successes over the last few years have caused other learning groups in your organization to want to use the new LMS, so you will have to factor in their requirements and your selection team has now grown to 8 people.

Unfortunately, you haven’t looked at LMS products in years and five members of your growing selection team have never used an LMS.   There are new buzzwords out there since the last time you paid attention like Gamification, Social Learning, Mobile Learning, Cloud, SaaS, Tin Can, NextGen, Talent Suite and extended enterprise LMS and you are not sure what it all means and how it applies to you.

You type “LMS” into Google and Expertus, Saba, Cornerstone, eLogic, Docebo, BlueVolt, InteractyxAbsorb, Accord , WBT SystemsNetDimensions,  Growth Engineering and many others all show up on the first few pages.  You pick the first one on the list and review their website, read some case studies and look at their product features.  Yep.  It’s an LMS.  You submit the “Contact Us” form and wait for a reply so you can schedule an introductory call.   You haven’t done LMS vendor calls before so you invite a few members of your team to participate in the 45 minutes of fun.  On this initial call, you try to relay all the information about your business, goals and requirements, but rather than listening, the vendor rep is giving you a sales pitch on how their solution is right for you.

As a next step you schedule a 60-minute demo and invite your full team to participate.  The sales rep introduces her company, experience and products for the first 30 minutes to catch up the members of the team that were not on the introductory call.  You and your team are starting to get antsy and you tell her to “get on with it”.  Unabashed she continues on for another five minutes and then tosses the presentation over to the solution architect (SA) to demo.  The SA walks you through 20 minutes showing all the things that every LMS can do.

With 10 minutes left in the hour you start peppering questions about features you were hoping to see.  “Yes.  Yes.  Let me show you.”  Meeting over.  You now realize you are no further along than you were before the demo in regards to understanding your own requirements and if this vendor is a direct match, or not.  Well, better safe than sorry.  The vendor looks OK for now and you qualify them in.  You will sort it out in the RFP round.  Off to the next LMS vendor.

What Does it Cost to Qualify LMS Vendors?

Let’s take a quick look at what the above organization spent to barely evaluate just one vendor:

  • 30 minutes x 1 person:  Read vendor’s website and request a call
  • 45 minutes x 3 people:  Vendor discovery call with 3 core team members
  • 15 minutes x 3 people:  Debrief discovery call with 3 core team members
  • 60 minutes x 1 person:  Scheduling logistics for discovery call and vendor demonstration
  • 60 minutes x 8 people:  Vendor demonstration
  • 15 minutes x 8 people:  Team debrief for all 8 team members

Total:  12.5 combined team hours @ $150/hour average loaded rate you are at $1,870 per vendor.  Obviously your team may have more or less members, or a higher or lower loaded personnel rate, but all the same, the lost productivity adds up quickly.

So $1,870 in lost productivity just to see a demo and qualify them as an LMS which you already knew when you started.   Only 499 more vendors to go.  When do you stop?  10?  20? 50 vendors? Will you be any further along?  What if you choose the wrong 10 or 20 to evaluate?  Your costs can spiral into the tens of thousands BEFORE you send 10 or 15 vendors an RFP and have to sort through 15,000 pages of proposal response data to select a partner.  (That deserves another blog post!)

“OK, enough, smart alec,” you say.  “Now that you’ve made a mockery of the standard LMS section process I’ve been following, what should I do?” How do you  know that there are so many vendors with almost identical yet different capabilities?   How can you possibly rank one effectively against another without spending a lot more time?

Hire an LMS Consultant

Here is the short easy answer.  Hire a professional LMS consultant.  An LMS consultant will help you define your business case, identify use case scenarios, gather functional, technical, professional services and budgetary requirements, short list the competition, write the RFP,  manage the vendors and negotiate a great deal.

A good LMS consultant can help you do all of this for $10,000-$30,000 depending on how big and complex your project is.  At $1,870 just to qualify an LMS vendor, it doesn’t take long to spend much more than an LMS consultant costs and get much less in return.

Don’t be a “Do It Yourself” hero.  It’s not worth it.  I’m calling a plumber the next time.  Hope you do, too.

Good luck, and thanks for reading!

 


Learn More! On-Demand Webinar:

The Economics of LMS Replacement

Stuck with a learning management system that no longer meets your needs? Do you pay for annual maintenance and hosting, but haven’t upgraded in years, and rarely use tech support? Want to expand your learning program reach to customers, channel partners or others, but can’t afford the incremental licenses? Ready to move up to a new solution, but unsure about what it should cost? If any of these scenarios are familiar, this webinar is for you.

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Join Talented Learning lead analyst and CEO, John Leh, as he shows you how to take charge of the LMS replacement process and lead your organization into the modern learning age. You’ll get insider perspectives and research-backed insights to help you overcome internal inertia, speak the business language of executives and get approval to replace your LMS.   In this fast paced, information packed session, you will learn how to:

– Analyze what you’re currently spending (and why)
– Define what you need in a new LMS
– Outline the best license model for your intended use
– Develop realistic budget expectations
– Create a business case your stakeholders can support
– Find vendor intelligence you can trust

Replay this on-demand webinar now!


Do You Need Help Qualifying LMS Vendors?

Are you shopping for a new or replacement LMS and overwhelmed by all the choices? Looking for a learning platform that truly fits your organization’s needs?  We’re here to help!  Submit the form below to schedule a free preliminary consultation at your convenience.

John Leh
About John Leh (125 Articles)

John Leh is CEO and Lead Analyst at Talented Learning, LLC. Named one of the Top 20 Global Elearning Movers and Shakers of 2017, John is a fiercely independent LMS selection consultant and blogger who helps organizations develop and implement technology strategies – primarily for the extended enterprise. John’s advice is based on 20 years of industry experience, having served as a trusted LMS selection and sales adviser to more than 100 learning organizations with a total technology spend of more than $65 million. He helps organizations define their business case, identify requirements, short-list vendors, write and manage RFPs and negotiate a great deal. You can connect with John on Twitter at @JohnLeh or on LinkedIn.

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