I have now formally reviewed 125 of the potential 700 learning management solutions available in the world. As I get deeper and deeper into the industry, I’m more convinced than ever that “focus” is the key LMS technology trend of today’s winning vendors.
The industry is awash in evolving learning technology features: micro and adaptive learning, gamification, augmented and virtual reality, xAPI, big data, social, content curation, user experience, video, integration and the list goes on and on. Our industry is always searching for the next big feature destined to change everything. Unfortunately, it is too easy for LMS vendors and buyers to get lost in the “me too” feature race and fail to see the forest for the trees.
Many vendors get bent out of shape about losing sales opportunities on features, and then dedicate too many resources to R&D. In contrast, strategic LMS vendors differentiate and structure their business around solving specific problems better than the competition. They invest resources in trying to find a sufficient number of potential customers with similar needs. New features either measurably add to their story, or they don’t build those features into their solution.
As I started writing this post, I had a sense of déjà vu and remembered an interview I did last year on the learning technology market for the Expertus blog. After rereading, I decided there was no need to continue writing, but rather share the conversation because a year (and dozens of LMS reviews) later, it is still very valid.
In the learning technology market, focus creates business value — and winning vendors have it!
Here is the interview:
1. You started as an LMS analyst early in 2014. What’s your background?
After earning a graduate degree in instructional technology two decades ago, I began creating e-learning content (before it was called “e-learning”) to support high-tech and telecom channel partners. Later, I moved into high-end LMS sales for 13 years — specializing in solutions for corporate extended enterprise and associations.
Early on, I discovered that organizations invest much more heavily in learning programs for customers, partners and community members. Those programs are more fun and interesting to develop and manage than employee learning, because they’re tied to “making money” rather than “saving money.”
Nevertheless, learning technology analysts traditionally have focused on employee learning and talent management solutions. They’ve largely ignored the much more profitable and unexplored needs of the extended enterprise. There was no help, advice or best practice information for professionals who buy, implement, grow or sell learning technology designed for broader audiences. So I co-founded Talented Learning as the world’s only research and consulting firm focused primarily on advancing extended enterprise learning.
2. You invest much of your time getting to know today’s most innovative LMS vendors up-close. How does that shape your point of view?
I’ve heard there are 700 LMS vendors. I can’t give you a complete list, but I can speak to the 100+ learning solutions I have researched and blogged about since 2014. As a recovering sales guy, I strive to learn each vendor’s mission, differentiators and unique value proposition, as well as the functional capabilities of their LMS. I see demos, do my own exploration and speak to clients. And I’m absolutely amazed at what I found.
There is incredible diversity across learning platforms. Each developer has created a niche where they can survive and thrive. I’ve found that LMS value varies, based on a vendor’s experience, services, regional focus, industries served, functional capabilities, technical sturdiness, licensing approach, ongoing support and more.
All of these variables mean that LMS buyers now have an opportunity to find a solution partner who truly specializes in making learning technology more effective, innovative and cost efficient for their particular needs.
3. Are more companies choosing these niche LMSs?
Absolutely. For a long time LMS vendors wanted to grow big and support any company, in any industry, in any part of the world. As a result, solutions became bulky, expensive, tough to implement and pretty boring for end learners.
Today’s niche vendors have created modern solutions in the cloud, picked a functional or industry focus, and are going after it. From the start, they’ve built their business on highly desirable recurring revenue, by selling monthly or annual subscriptions. This helped them become profitable more quickly, so they could continue to drive innovation in their chosen space.
Now there are a bunch of great solutions that are not interchangeable. I believe learning organizations have a much better chance at success when they choose a “best fit” specialist LMS. That’s why our firm helps organizations define their requirements on a deep functional, technical and business level. It’s the best way to find an ideal solution. In fact, none of our clients have opted for a “top tier” generalist LMS after considering specialist LMS alternatives.
4. Is the LMS finally closing the gap between what it promises and what it delivers?
Yes. For decades, choices were limited to only about 10 generalist vendors. Customers had to pay upfront for a perpetual license, and implementation rollouts were long and expensive. Many buyers failed to achieve the return on investment they anticipated. The political and fiscal cost of buying an LMS became prohibitive, and many buyers were stuck with an underperforming LMS — unable to justify a replacement. Because vendors were paid upfront, they were not inclined to go the extra mile. This only increased the gap between expectation and reality.
However, the birth of the cloud LMS has changed all of that. Now buyers pay as they go, implementation is much quicker, and vendors perform as expected or they are replaced. If a buyer does a good job at defining what they need and want upfront, the expectation gap vanishes. LMS life is much simpler in 2015.
5. As you look at LMS technology trends, what surprises you most (for better or for worse)?
I’m a fan of cloud technology — not just hosting in the cloud, but creating a true multi-tenant environment, where every last customer is on the same version of the LMS. This dramatically reduces the resources vendors must invest in customer support, implementation and upgrades. At the same time, it frees more funds for investment in additional innovation. As a result, the pace of development is accelerating.
LMS vendors are continuously innovating across all aspects of their solutions, so they can offer more value to customers in their niche. Social, mobile, gamification, integration, e-commerce, reporting — all these capabilities are advancing differently in the industry. In the past, innovation seemed to be parallel across vendors, because analysts somewhat pushed vendors into the same box. Now, I look forward to every LMS review, because it often uncovers a new gem I haven’t yet seen.
6. Are LMS vendors overlooking any key business needs?
Most LMS vendors are not addressing continuing education. Professionals in almost every industry must earn regular training requirements or credits to maintain a right to practice. Doctors, lawyers, architects, auditors, barbers, real estate agents – you name it. A recent Census Bureau study estimates that 46 million U.S. adults participate in continuing education — and the total spend for creating, consuming and selling continuing education content tops $40 billion a year in this country, alone. Yet, estimates for the global LMS market range from $3-$10 billion a year.
That’s a pretty big disparity — but continuing education is very complex to manage. For example, every profession has unique accreditation rules and standards. To complicate matters, each state, province or country has its own regulations and licensing rules for various professions. That’s at least 50 different variations for each education category. A course might be worth 3 credits in Maine, but 2 credits in California — and the LMS needs to manage all of that.
I do a lot of research on this, and I have found that most organizations use a combination of LMS, proprietary systems and manual administration to keep track of it all. That’s a big waste of resources. Only a handful of LMS vendors focus on this now, and are doing it well. As you can expect, they are feasting on the opportunity.
7. Several years ago, you predicted that extended enterprise learning would quickly gain traction. Do you see signs of this now?
Without a doubt. The biggest sign last year was when Lynda.com was acquired by LinkedIn, which was no doubt one of the reasons Microsoft purchased LinkedIn this year. Before it became LinkedIn Learning, Lynda was a very large, successful learning content aggregator. It offered unlimited content from many authors for a flat fee of only $25 a month. Now, for the same basic prices, LinkedIn’s 400 million users have access to Lynda content from an education tab in their LinkedIn account. Let’s say only 1 million LinkedIn users buy the basic service this year. They will contribute $300 million to LinkedIn revenue. That’s solid business model in its own right, but it will be interesting to see how Microsoft leverages it further.
But fortunately, an organization doesn’t have to be a huge global company to make this kind of online training model work. Now, even small organizations can easily provide “extended” learning. You can generate new revenue streams by delivering learning content and issuing certifications for a fee. Cloud-based LMSs offer a secure, scale-able infrastructure for this — even if you’re only an individual looking to monetize your subject matter expertise.
8. Are learning organizations leaving money on the table by overlooking the value of customer and channel education?
Definitely. It’s proven that when B2B companies certify and train customers and partners, they sell more, and they sell faster. Many industries already recognize this — software and tech companies lead the way. Channel, prospect and customer education is a core part of their business. Other industries, however, are still slow to adopt this.
Originally, I looked at extended enterprise learning as a progressive tool to gain competitive differentiation. Now, I think it has graduated to a business essential — every organization is being graded on how well its education programs improve outcomes for customers and partners.
9. Let’s talk about companies that are ahead of the curve with external learning initiatives. What kind of results are they seeing?
We’ve analyzed results from LMS vendors who publish customer outcomes. Their results show:
- Dramatic improvement in channel performance (anywhere from 2x-7x improvement)
- Significant increase in sales effectiveness
- Increased customer satisfaction
- Reduced support calls
- Accelerated product rollouts
- Increased customer renewals/retention
- Decreased new store/dealer onboarding costs
The bottom line is that external training impact is measurable. Find an audience, give them training to change a behavior, measure the change compared to an untrained audience, and you’ll see measurable ROI. Start small, prove your wins, and grow, grow, grow.
10. You share lots of advice with vendors about how to sell learning technology. What are the biggest (or most common) missteps?
During 13 years of selling LMSs, I became a student of the sales process, and all the missteps you can make. I made most of them, but over time I learned how not to repeat them. Now, as a buyer’s advocate, I get to evaluate many salespeople of all different experience levels. I’ve seen it all — from terrible to fantastic.
Ultimately, I think salespeople talk too much – way too much. Too much selling and not enough listening. When I’m representing clients at vendor demos, you wouldn’t believe how many times I’m interrupted by people who assume they know what I’m thinking or trying to say. That results in an incomplete understanding of the opportunity, and what it will take to win. With so many viable LMS solutions in the world, salespeople lose a lot of deals thinking that they have it all and they know it all. Good salespeople — the really good ones — listen way more than they sell.
11. What makes a great LMS provider?
It’s not just about having a successful implementation — that’s a given. It’s about enabling the buying organization to be successful in what they’re trying to achieve. If vendors listen, help define appropriate, measurable success criteria, and offer services to align with business goals, they earn true partner status. That’s why “specialist” LMS developers are doing so well — because they understand the specific needs of organizations in their niche. That makes them tough to beat.
However, there are also many “free trial” generic LMS solutions available. You know you’ve found one when you can sign-up directly on the vendor’s website without even speaking to a sales person. They may be great for basic needs, but they’re based on the assumption that learning organizations don’t need or want any professional guidance. If you need help, or if you want a learning technology partner, these are not the best choice.
12. There seems to be no end in sight to LMS innovation. Looking ahead, what technologies do you think will create the most value for business learning?
Among LMS technology trends to watch, I think there will be more innovation in mobile, social, badges and certification, as well as capabilities that attract new users and facilitate training content commerce. I believe most LMS innovation is being driven by extended enterprise needs because those initiatives have a direct impact on business metrics, and contribute to a competitive advantage.
Employee development is good, but it is hard to prove progress, so less innovation happens there and budgets are tighter. For the extended enterprise, it is all about building a community of voluntary learners, keeping them engaged, and giving them paths to content and credentials they want and need.
You want them to buy content, contribute content, and do it again and again. When an LMS does that well, it accomplishes much more than an employee-oriented LMS. There is much more room for improvement and innovation in the extended enterprise space.
Exciting times ahead!
Learn More About LMS Technology Trends
Our ultimate, no-nonsense guide for LMS buyers and sellers is now available! The LMS Almanac: Corporate Edition 2016 includes:
- Corporate LMS Overview
- Employee and Extended Enterprise Insights
- Learning Technology Industry Trends
- 20 Modern LMS Feature Sets Defined
- Case Studies Galore
- 50+ Charts and Graphics
- Comparison Grids
- Licensing and Pricing Guide
- 75 LMS Vendor Profiles
Find out more about the LMS Almanac: Corporate Edition 2016, so you can lead your organization’s learning programs into the future.