The LMS Shopping Rush Is On! What’s Driving Buyers?

By Gordon Johnson, VP Marketing, Expertus

Gordon Johnson, VP Marketing, Expertus

Gordon Johnson,
VP Marketing,

Is your organization looking for a new LMS? Join the crowd! As 2014 draws to a close, demand for next-generation learning management systems is booming.

In fact, according to industry analyst, Josh Bersin, the global LMS market grew by more than 21% over the past year. It’s now reclaiming center stage as the fastest growing HR software segment. What’s more, the LMS recently earned a spot on Bersin’s “Top 10 Disruptions in HR Technology.”

What is fueling this renewed interest? Bersin points to several key factors:

1) Increased need for competent workers:  As the economy recovers, employers are investing more heavily in training and development to fill business-critical skills gaps.

2) Legacy LMS systems are ripe for replacement:  Many installed LMS systems have been in place for 4-7 years. Bersin estimates that 61% of corporate learning organizations are dissatisfied with the status quo, and plan to purchase a next-generation platform before the end of next year.

3) Breakthrough technologies are redefining the LMS:  While legacy platforms are considered one-dimensional “training administration systems,” next-generation LMSs are functionally robust “learning engagement platforms.” Advances in mobile and social technologies make it possible to deliver interactive learning and performance support whenever and wherever it’s needed. And innovative API libraries now integrate real-time LMS data seamlessly with Talent Management, HR, ERP and other business systems.

LMS Purchase Timeframe_Software Advice Survey 2013

Read the full Software Advice LMS Buyer Report

Supporting Evidence
Other research reinforces Bersin’s dramatic market growth estimates. For example, several months ago, software selection services firm Software Advice released its first Learning Management Systems BuyerView Report.

The survey looks at LMS purchase intentions of 385 organizations that contacted Software Advice for guidance in 2013. A whopping 95% of the respondents said they plan to buy by the end of this year.

According to Software Advice market research associate, Erin Osterhaus, the pool of prospective buyers has grown significantly in 2014. “Compared to 2013, we’ve seen a 62% increase in the number of buyers coming to us seeking to purchase LMS software, and we expect that number to continue growing,” she said.

When we asked Erin what seems to be driving demand, she explained: “For buyers already using an LMS, the most common reason for wanting to replace existing software is a need for more advanced functionality.”

Expertus discovered similar motivations among more than 350 enterprise learning decision makers who participated in our Future State of the LMS survey last year. 60% of respondents told us they consider their existing LMS “somewhat” or “very” ineffective at addressing advanced learning technology needs. And, not surprisingly, 60% were planning to replace their systems.

Expertus Next-Gen LMS Desired Features Survey

Download the full Expertus “Future of the LMS” Report

What’s On Today’s LMS Wish List?
Clearly, learning organizations are ready for better technology. But as they rush to replace outdated systems, what functionality matters most? When we compare our research results with findings from Software Advice, some interesting patterns emerge.

LMS Priorities: Flexibility First
Of course, every organization is unique. As a vendor, we see this everyday. Therefore, we’re not surprised our survey respondents say “flexibility” is the LMS capability they value most. Effective learning organizations must adapt quickly to business change. They can no longer afford to let weak LMS infrastructure stand in the way.

Rounding out the top 5 needs are:

– Ability to integrate with other systems
– Ease of reporting
– Ease of use
– Ease of tracking

Although these categories don’t correspond directly with those used by Software Advice, there is common ground — especially with the desire for improved tracking, reporting, integration and usability.

Desired LMS Features - Software Advice LMS Buyer Survey 2014

Read the full Software Advice LMS Buyer Report

For example, regarding usability — 13% of Software Advice respondents are looking for a new system because they’re unhappy with their existing software. But, as Erin Osterhaus says, usability issues are often the underlying cause. In other words, “Their system is too complex or confusing for employees to use effectively.”

Also (not surprisingly) both surveys reveal a strong need for more sophisticated tracking and reporting capabilities. Learning leaders want tools that improve analysis and decision making — especially the ability to track compliance training more efficiently.

As Erin notes, although Software Advice respondents represent a wide variety of industries, the majority are from highly regulated sectors. “In fact, healthcare and manufacturing companies represent 22% of the data set.” We, too, see greater interest from customers in healthcare, finance, energy and manufacturing — where compliance is a key consideration for learning initiatives.

Your Turn
Are you actively shopping for your next LMS? Do you agree with the selection criteria from these surveys? What kind of advanced technology matters most to your organization’s learning success? Please share your comments below!

Note from Gordon: To learn how your organization can benefit from the advanced capabilities of ExpertusONE LMS, see the online demo now, or contact us for a personalized consultation.

Feature Image Credit: Flickr

4 thoughts on “The LMS Shopping Rush Is On! What’s Driving Buyers?

  1. Pingback: How to Win Funding For a Modern LMS | Learning In The Cloud

  2. Pingback: LMS Selection Advice: Who Do You Trust? | Learning In The Cloud

  3. Pingback: LMS Predictions 2015: Mother of All Crystal Ball Picks | Learning In The Cloud

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