Tracking employee training with an LMS has become a familiar part of your job, but are you living a nightmare or is your dream LMS on the horizon? To answer some of your questions, here are some research-based highlights of the state of that market and what it means for you. The findings are based on the results from the "LMS 2004 Report: Comparative Analysis of Enterprise Learning Management Systems" available at www.brandon-hall.com.
First, LMS products offer a wide range of functionality and pricing. By now, all LMSs have the same basic capabilities of managing courses and students, and most are user-friendly. The trend among LMS vendors is to add features that broaden their systems' functionality by providing more business management capability. For example, there is more support of human capital management (HCM) tools and more emphasis on performance management—what some companies call talent management. Beyond the basics of tracking completed training sessions and scores achieved, the most robust LMSs support on-the-job performance, awards and recognitions, a history of performance appraisals and other data.
The sector has 135 LMS providers, with more still entering the industry. That means buyers have plenty of providers to choose from. One major problem is that vendors are ignoring smaller prospective customers who want the features and capabilities big LMS vendors support. Understandably, LMS vendors are trying to land big contracts with big customers, but it might be a good time for big vendors to start thinking small in terms of prospective customers as well.
Implementation time for an installed solution runs about 12 weeks, much of which goes to making decisions about parsing data and setting up business rules within your organization. A hosted solution takes less time to get up and running. Our latest data from 39 vendors shows the average, first-year cost of an LMS with 10,000 registered learners is $186,260 installed and $204,153 hosted. These numbers reflect a relatively small price difference in cost for the first year of ownership, but it's important to note that over a three-year period, the cost of hosted solutions averages 38 percent higher than installed.
Vendors keep adding to their feature sets, which is good. The trouble is that users and prospective users aren't able to implement all of the features available. LMS users may not need a feature that a vendor adds because the customer company already has the same capability developed internally or bought elsewhere. In such cases, the feature that a vendor has gone to the trouble and expense of incorporating—and that the customer has paid for—goes unused.
One feature that is definitely garnering more customer interest is analytics. Customers want to be able to prove that their training is cost-effective, and analytics packages help them do that. Vendors are adding more capability on this front, meaning that training administrators now can more readily tie a training initiative to enterprisewide business goals by tracking training efficiency. Analytics show whether workers are complying with training requirements and how much the initiative is costing.
Not all systems have a full package of analytics, but we're seeing more that do. Some offer interesting features, like Santa Clara, Calif.-based Boniva Software, which has a Web-based solution that lets you convert numbers to graphs and pie charts with a single click. You can then output the graphs or pie charts into PowerPoint or documents in your training analysis reports.
Look for more highlights from the "LMS 2004 Report: Comparative Analysis of Enterprise Learning Management Systems" in next month's column.
Brandon Hall is the leader of brandon-hall.com, a learning research firm in Sunnyvale, Calif. firstname.lastname@example.org