When I began my career as an analyst, I started out studying the LMS market. At that time (early 2000s), learning management systems were an innovative new business application that helped companies build and manage e-learning and track and organize all forms of training. These systems were actually the first practical employee-centric portals.
Fast forward to today. Now we carry around smartphones, watch videos and live streams from a wide range of sources, and communicate through multiple social media channels. We’re all used to nudges, AI-based suggestions and a steady stream of messages coming our way throughout the day.
This change in the way we interact with information has made the original LMS paradigm, that of a portal-based online university, increasingly obsolete.
That said, companies have invested billions of dollars in these systems, which in many cases store some of the most important and hard-to-move data an organization owns. Banks, pharmaceuticals, insurance companies — any highly regulated business — own LMSs packed with employee data, business rules, compliance records and content fundamental to operations.
I was at an industry meeting recently with about 50 different companies. Attendees talked about their new learning experience platforms and said they would be “shutting off” their LMSs in the next few years.
While I hate to say it, the end of the LMS as we know it is coming. Although companies continue to spend millions of dollars each year operating and maintaining these systems, they are often burdensome to manage, hard to use and hated by end-users. Many now sit behind consumer-like front ends built by companies such as Cornerstone, SumTotal and Instructure.
I think it’s clear that the function provided by the LMS no longer belongs in an entirely separate system. Yes, many LMSs are very complex e-commerce, customer education and revenue-generating systems. But the core functionalities of tracking compliance, giv-ing employees reminders of when to complete courses and storing links to online courses really belong in a core HCM system. Workday clearly believes this, and the company is making major progress building its own internal LMS integrated into its platform. SAP, Oracle and ADP still have different applications for HR and learning, but the integration is becoming more urgent every day.
What most companies are doing now is simply “starving investment” in the LMS so they can spend their money on learning experience platforms, new content libraries, advanced VR and microlearning systems, and tools that help people share video and other types of information, collaborate and implement performance support. Products such as WalkMe, EnableNow and GuideMe, as well as tools such as Axonify and Qstream, can deliver training “as needed” without an LMS, giving L&D leaders the option to shift their investments.
Often now when an LMS renewal contract comes up, companies seriously negotiate lower prices or even look at alternative systems. I don’t predict the end of big systems like Saba, SumTotal, SAP or any other LMS vendor overnight. But it’s apparent to me (and to them) that if they don’t advance their technologies to meet market expectations and trends, their new business will start to significantly slow down.
I’m a conservative buyer of technology myself, so I never recommend companies buy unproven tools when their business continuity is at stake. However, when new technologies emerge that provide clear value, companies have to shift their investments.
I use the analogy of mainframe computers, which are still a multibillion-dollar business — just not a growing IT market segment. Similarly, I believe the LMS is on its way to becoming a back-office server, more integrated into HCM over time.
Let’s all get excited about the new world of learning, which I call “learning in the flow of work.” That’s where this world is going, and that’s where the new investment will be.
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