Does Your Business Really Need an LMS? Straight Talk with “The eLearning Coach”

Earlier this year, I was fortunate to be interviewed by one of the learning community’s most talented instructional designers and thought leaders, Connie Malamed (aka “The eLearning Coach“). The resulting podcast is titled “The Strategic Use of Learning Management Systems” but speaks to a more basic question: Does your organization even need an LMS?

In only 30 minutes we compared notes about all sorts of issues of interest to business-minded learning professionals. For instance:

• How are modern learning management systems different?
• Why is the LMS market is changing so quickly?
• Which learning systems trends are worth watching?
• What should you consider when choosing an LMS for business?
• Is the relationship shifting between content authoring and learning systems?
• How do tools like xAPI and CRM integration make it easier to link learning with business results?

As we wrapped up our session, I was pleasantly surprised by Connie’s closing comment:

“Honestly, I never thought I would be so fascinated with the world of learning management systems, but John has such a passion for the industry that he made it exciting.”

Curious why Connie reacted that way? Listen to the full podcast or read the highlights below:

Podcast Highlights

How do you define the term LMS?

Basically, an LMS (or learning management system) is software that tracks learners, content and their interrelationships. For example in a talent management scenario, an LMS helps track each employee’s profile and organizational role, as well as training history and relevant learning paths. It’s also a hub for training registration and delivery of digital learning content. And to some degree, every LMS tracks learner progress as they move through assigned or selected content.

Among learning professionals, LMSs have a reputation for being unwieldy and difficult to use. Is that unfair?

I think that’s an outdated perception. Until nearly 10 years ago, about a dozen competitors ruled the LMS world. All of those systems were large, clunky and expensive. But since then a flood of new vendors have entered the market, thanks to the rise of cloud-based applications and other digital advances.

Now LMSs are mobile and social savvy. They look and feel like consumer-oriented applications. They’re also much easier to administer, update and integrate with other systems. So to say they’re antiquated is no longer accurate.

You say there are now more than 700 LMSs? That seems almost unbelievable…

Yes, we’ve seen astonishing market growth over the past decade. We’re currently tracking more than 700 systems, and I’ve personally reviewed more than 170 of them. Here’s what I know for sure – no two LMSs are alike. It’s a single term, but there are countless flavors.

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So you’ve reviewed more than 100 LMSs?

171 and counting. When I founded Talented Learning 4 years ago, I had one goal in mind. I wanted to know why so many learning management systems were entering the market. How did only a handful of systems explode so quickly into such a diverse landscape?

I decided to learn directly one-by-one, talking to executives, clarifying their business goals and attending demonstrations. It’s been an exciting journey! Every time I think our database will soon be complete, new vendors pop up on my radar. But overall, I’ve found that specialization is driving innovation.

What kind of criteria do you use for reviews? 

Most analysts look for gaps. They focus on what’s missing. I don’t do that.
Instead, I want to figure out what makes each LMS special. Why does each vendor win new business opportunities? What are the unique business circumstances where each LMS adds the most value? That’s important to know when there are 700+ competitors!

The reason we do this is for our day jobs. As independent consultants, we help organizations figure out what they need from a learning technology standpoint, and then match them with the specialized LMS that makes the most sense for them. So we’re serious about digging deep to understand what’s behind every system.

What does your process look like? 

Every review starts with an executive briefing, so I understand the history, mission, value proposition, target customers, price structure and related services. Once I have a handle on the business, I usually spend 1-2 hours in a guided tour of the system, asking questions about functionality and testing use cases while I document findings in our database.

How do you categorize various types of learning management systems?

You can classify the LMS market in many ways. I prefer an approach that makes the most sense to buyers. Originally we focused on target audience, but that has shifted. Now our categories are based on how learning systems are applied.

Using this framework we’ve defined a variety of niches, such as customer education, channel education, franchise training, continuing education, commercial training, talent management, higher education – the list goes on and on.

Do all these different LMS categories explain why there are so many different LMSs available now?

If there’s one reason why there are so many learning management systems, it is that buyers like the concept of specialists. They find it attractive because they get domain expertise as part of the deal rather than having to educate vendors about standard practices in their sector.

But what many people may not realize is that buyers with specialized needs aren’t choosing “generalist” solutions. In situations where specialists compete with the generic LMS brands we’ve all known for decades, niche players are typically winning.

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What’s the hottest LMS category these days?

I’d say customer education, which blurs the lines between marketing and training over the life of a customer relationship. When businesses want to train customers and prospects, they focus on very specific user scenarios, core functionality, third-party integrations, implementation needs and types of content. This leads to unique requirements that specialized LMS vendors can fulfill better than generalists.

So, niche LMS vendors are actually doing better now?

Exactly. Channel education is another example. Imagine you’re an insurance company like Allstate with an external channel of insurance agents who represent your product. As independent agents, they probably also represent competitors like Farmers or State Farm.

What’s the best predictor that an agent will sell your product? We’ve found that agents tend to recommend companies that train them well. In other words, winners do a better job of providing resources, learning paths and certifications that help agents serve their clients more easily and effectively.

This is happening in every industry. The ability to leverage learning as a strategic business tool is one of the most critical factors driving demand. That’s exciting! The learning community has talked about “getting a seat at the executive table” for years. But it’s here now for organizations that build learning into business initiatives that drive sales, revenues, customer satisfaction, brand loyalty and profitability.

Nowadays, you need to make a business case for something.

Every time.

So, when choosing an LMS, what are some of the requirements people should look for? 

If you look at a spreadsheet of 1001 things an LMS can do and try to determine what is or isn’t critical, you’ll end up with 992 must-haves. That’s a nightmare.

Instead, start with your use case. What kind of impact does your organization want? Who are your learners? What do you want them to do at every step in the process and how should they interact with the LMS? Amazingly, if you map it out, you’re likely to identify less than 100 requirements you really need. That gives you a much clearer focus. And with more than 700 learning systems available focus is key.

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Sounds like creating a customer journey map or experience map for each persona would be very helpful to think it through.

Exactly. We should join forces!

That could be fun. One last question. How should organizations measure the success of an LMS implementation?

It comes back to knowing where learning adds value. For example, a software company that integrates its LMS with a CRM like Salesforce can determine the effectiveness of a presale learning module by analyzing its impact on customer conversion rates. In other words, they can compare subscription rates among prospects that consume the learning content with those that have not been exposed to it.

Or perhaps they want to know the impact of product certification on channel partners, so they compare the performance of certified partners with those who haven’t earned a credential. For instance, how much more do partners sell after completing certification training? Do they close deals faster? Are their deals bigger? Do they contact support less often?

With LMS-CRM integration, it’s easy to conduct comparative A/B testing in detail, so organizations can measure the effect of learning content specifically in dollars and cents. This kind of insight also helps them predict the effect of customer, partner and employee education before the next product launch.

By predicting, capturing and comparing specific learning activities and business metrics, you can drive continuous improvement. This ability to measure the business impact of learning is the real reason why there are so many learning management systems. It’s also why learning organizations are leaving the old cost-center mindset behind in favor of becoming profit centers.

Conclusion

As I’ve mentioned before, one of the most rewarding aspects of my job as an independent LMS analyst is the opportunity to exchange ideas about learning management systems with so many different professionals. But talking with someone as smart and thoughtful as Connie is especially fun.

Conversations like these are more than just an opportunity to share what I know and love about learning technology. They’re also a chance to learn from the experience of others. If you’ve been unsure about whether you need an LMS, I hope this has been helpful for you, too.

Thanks for reading!

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