Can LMSs Survive the Sophisticated Buyer?
By Clark Aldrich

E-learning means different things to different enterprises. E-learning classes can range from more traditional synchronous offerings, which are delivered at the same time to different locations; to asynchronous, publishing-based, Web-centric courses; to newer modular, self-paced content that borders on knowledge management; to experiential self-paced simulations.

Most organizations looking at e-learning need to consider the following broad links in the value chain:

• strategy, which applies the correct e-learning solution into a larger solution that addresses a given business problem
• course production, which provides authoring tools for people to build their own courses and assessments
• management, which ensures that the right person gets the right course at the right time.

But to meet those needs in today's market, corporations and government organizations must evaluate six different categories of e-learning suppliers:

• learning management systems, such as Docent, Saba, or Pathlore
• virtual classrooms, such as Centra, Interwise, Placeware, or WebEx
• off-the-shelf content providers, such as SmartForce, NETg, and DigitalThink
• learning content management systems, such as WBT Systems and Knowledge Mechanics
• integration services, such as the large consulting firms that organize third party software.

Among the supplier categories, LMSs have been particularly successful at winning large the contracts that are sold to the highest levels of an enterprise. However, five realizations from savvy buyers are making their way into the public understanding that will ultimately wrench LMSs from being considered e-learning's backbone.

1. The LMS market has no leader

The LMS market frustrates buyers, almost defying a company to select the appropriate supplier. It's nearly impossible to compare suppliers because every implementation is different, both at the back-end and at the logic and business-flow level. Meanwhile, high-end options don’t ensure quality, and some low-end solutions provide quick and easy-to-install versions that handle basic functionality. More important, most enterprises buying a system still feel like beta customers. As with most rapidly evolving industries, there's an inverse correlation between the suppliers with the largest customer bases and those with the best architecture. In other words, companies usually have to chose between stability and sophistication, or compromise their needs.

What makes the leaderless market difficult is the opaqueness of the players. For example, determining whether a supplier’s architecture is Web-centric, client/server-centric with a Web front-end, or mainframe-centric with a client/server front-end is nearly impossible. Likewise, understanding scalability is difficult and information is often contradictory.

2. LMS implementations are empty highways

Many companies have invested hundreds of thousands--even millions--of dollars to purchase and customize learning management systems. But due to the lack of courses and time pressures, less than 20 percent of potential learners use them. Enterprises that use their LMSs are comprised primarily of IT professionals who need to continuously update their skills or salespeople who need to learn about new products quickly. It would be as if, after Boston spends billions on the Big Dig, the only vehicles to use it where police cars and a few Good Humor trucks. Indeed, LMSs fail to track a surprisingly large number of self-paced formal learning options, including books, magazines, conferences, meetings and speeches, mentoring and apprenticeship programs, and such group projects as designing a new product or helping a company develop a new marketing plan.

In a few cases, such as books and magazines, learning can be rather trivial and self-organizing. But in other instances, such as mentoring, apprenticeships, and group projects, learning can lead to the kind of profound experiences that fundamentally grow people. That's the essence of enterprise learning, and it's neither orchestrated nor captured by LMSs. Supporters of LMSs will argue that those ancillary areas of corporate learning were never within the domain of the training department or HR, therefore, they shouldn’t be targeted by LMSs.

But even in the traditional training world, LMSs will find it increasingly difficult to support some relevant material because two prominent e-learning content types challenge their value. The first new content type is knowledge chunks. Chunks are small pieces of information that capture individual moments of understanding. Using knowledge chunks as the building blocks of e-learning promotes the convergence of knowledge management and e-learning, as well as effective use of just-in-time learning.

However, most LMS suppliers are defensive about KM/e-learning chunking capabilities. First, suppliers say that chunking is merely a buzzword. If pushed, some say that small knowledge chunks aren't even important, while others say their LMS performs content management already. But when faced with evidence to the contrary, most suppliers admit that they currently can’t support knowledge chunks but are making a big announcement regarding the capability soon. But in truth, no LMS can effectively search, retrieve, deploy, store, or track small chunks of content. Even LMS acquisitions of KM/e-learning chunk suppliers, will bring different offerings from the same roof rather than true integration.

The second content type is simulations. I predict that immersive simulations will short-cut the experiential learning process to become the dominant form of high-end pre-packaged management training for the PlayStation 2 generation by 2003. Currently, most simulations are CD-ROM delivered rather than Web-delivered, are packaged with their own tracking mechanisms rather than linked to a larger management system, and generate information about users that rarely fits into any standard template. However, even though simulations frustrate infrastructure and standard efforts, they challenge the meaning of learning within the context of an enterprise and reduce the value of LMSs to the low-value task of aggregating incomplete user data. The message is clear: When and where simulations dominate, the case for LMS decreases.

3. Skills management doesn’t work

The premise behind skills management is that it allows directors to understand proficiencies held by employees for the purpose of deploying and building skills strategically. Similarly, skills management can empower employees to take control of their futures by revealing skill gaps and recommending courses.

Skills management is a prime selling point of most LMS suppliers, and it's often among the top criteria used by organizations when selecting an LMS. The problem is that skills management efforts often fail. Reasons include a lack of common skills definitions, an effort to be both rigorous and employee friendly, or that companies track skills that are only vaguely important.

Suppliers are aware of this phenomenon. Yet, they push skills management as a selling point because, well, it sells. Fortunately, this ploy is starting to lose steam, and LMS suppliers will have to create a new compelling vision or lose their seat at the table.

4. LMSs support infrastructure, not strategic learning

One strategic hot spot of e-learning has been its ability to quickly educate employees, significantly changing corporate cultures in a matter of weeks rather than months or years. Ideally, the time between the first and last employee trained is less than a month. Because of the temporary nature of that sort of e-learning, consulting companies and systems integrators talking to CEOs upsell e-learning's ability to bypass the training and the IT departments as part of e-learning's value proposition.

Assessments, courses, registration, and tracking are increasingly delivered via the Internet, and are hosted by the integrator. Therefore, LMSs sit idle as companies employ this highest level of strategic e-learning. As with the simulations, the heavy lifting is done by the supplier, with reports sent to the individual customer.

Another high order to strategic e-learning is its ability to educate customers, building brand loyalty, increasing e-business, and generating incremental revenue. Unlike e-learning efforts that drive cultural change, customer-focused e-learning requires significant infrastructure. Most companies assume that infrastructure will be supported by the IT department. Again, LMSs risk irrelevance because they're built for internal audiences rather than customers. It's nearly impossible to find an LMS that has adequate scalability, a broad n-tier architecture that can handle entire companies as clients, and adequate connectivity with CRM applications such as Siebel, Clarify, or Vantive.

5. LMSs should be configured, not customized

The last tectonic realization changing the landscape is that enterprises that did significant customization of their early LMS implementations were still unsatisfied. After spending huge sums to map technology to their business processes and enterprise-wide applications, they're stuck with a system that can't be upgraded. Companies find themselves further behind as successive new generations of products develop.

Savvy enterprises realize that they should be able to configure rather than customize an LMS. Superficially, nearly two-thirds of the cost of an LMS system, which corresponds to about two-thirds of the LMS supplier's revenue, is earned through customization and implementation fees. A zero-customization customer will change the supplier’s financial model. More significant, suppliers will have to do a better job creating robust vanilla versions of their systems that are easily configured.

Bottom line

LMSs enjoyed high prominence during the 1999 to 2001 timeframe. They became the must-have application for sophisticated enterprises wanting to get into e-learning. But they ran into the classic Silicon Valley trap of too many features and not enough functionality, overselling and under performing, alienating customers and trapping themselves in maintenance mode.

LMSs are critical to understand and deploy learning, and most organizations should have them. But ultimately, they become supporting players in the value chain that brings the right learning to the right people at the right time. Otherwise, while we need learning management, we might not need learning management systems.

Published: November 2001