A learning management system, aka LMS, is software used to manage, deliver, track and report the training and development activity of an organization.
The LMS market has skyrocketed during the past ten years and continues to be one of the highest growth categories in the software industry. Today there are more than 600 LMS vendors to choose from and the industry is worth over $4 billion. (1)
Whether you’re new to the LMS industry or just need a refresher, the following facts and research will help you get up to speed fast.
1) What is the size of the LMS market?
MarketsandMarkets reports the LMS market was worth $4.07 billion in 2015. The market is forecasted to grow to $11.34 billion in 2020. North America is the region expected to lead market growth with expansion expected in the Asia-Pacific and Latin American markets as well. (1)
The rebounding U.S. economy is a major factor of LMS market growth. Businesses are investing more on training, so naturally more LMS software is being purchased. (2)
As more businesses look to increase training opportunities for their employees, partners and customers, they are realizing the cost savings and scalability that eLearning can provide. Technology advancements and the continued adoption of cloud technology are driving demand for online learning solutions.
2) Who uses an LMS?
LMS users fall into two main categories:
Academic/education
Corporate
In a recent study, it was reported that academic/educational institutions make up 21% of the LMS market. The industries comprising the rest of the market are widely varied, with technology in second place at 12%. Manufacturing (9%), consulting (7%) and healthcare (7%) round out the top five industries using LMS software. (3)
3) How is LMS technology delivered?
LMS technology is delivered in one of the following two methods:
On-premise or Custom/Client hosted
Cloud or SaaS (Software as a Service)
The adoption of cloud LMS technology over custom or on-premise is becoming the industry standard. The custom or on-premise LMS model is expensive and difficult for both clients and vendors to maintain. A cloud LMS, on the other hand, can be consistently updated with new features and functionality for multiple clients at one time. Security, hosting and updates are managed for multiple clients by one vendor and the client can easily configure the solution to their own needs. (4)
4) Why do organizations buy LMS software?
A recent study reported the three primary reasons companies purchase an LMS are to:
Administer required compliance-related training
Develop and train internal employees
Extend training to customers, resellers and channel partners to educate and increase adoption of products and services (4)
First Time vs. Experienced LMS Buyers
In a 2015 survey of LMS buyers, first-time buyers stated their top reasons for purchasing an LMS were to improve efficiency of their training processes (27%) and more effectively report training activity such as completion rates and training return on investment (ROI) (24%).
Of those switching from one LMS vendor to another, 31% said they needed features their current vendor lacked and 23% said their LMS was either broken or not user-friendly enough. (5)
5) What are the most common LMS features?
LMS software functionality can vary greatly from vendor to vendor. Certain systems cater to a specific industry or niche, while others offer more advanced functionality in a certain area of training (compliance, mobile, gamification, etc.). LMS technology and functionality are constantly evolving. The following are reported as the most-used LMS functions overall.
Trainee testing – 73%
Training administration – 68%
Record-keeping – 53%
Virtual classroom – 45%
Document management – 45% (4)
In a survey by the American Management Association (AMA), 70% of HR professionals stated they use employee feedback and other opinion-based metrics such as manager evaluations (40%) to measure the effectiveness of training. (5) By implementing an LMS, HR professionals can move to measuring quantitative data such as training completions, pre and post-training assessments, and more so they can effectively report results.
Conclusion
The LMS market is growing and technology is moving fast. Buyers have more systems to choose from than ever. Having options is great, but can make the decision process that much more difficult. For best results, it’s important for the organization to know their training goals and find a vendor whose priorities are in line with theirs.
Learn More
For more research, facts and stats, presented in a stunning visual format, check out these fantastic infographics:
Top LMS Stats and Facts For 2015 Infographic You Need To Know —eLearning Industry
2014 State of the Industry — ATD
Top LMS Software Infographic — Capterra
Sources
1) Research delivers insight into the learning management system (LMS) market that is estimated to be worth 11.34 billion USD by 2020, October 2015. https://www.whatech.com/market-research/consumer/101875-research-delivers-insight-into-the-learning-management-system-lms-market-that-is-estimated-to-be-worth-11-34-billion-usd-by-2020
2) Top 10 LMS Predictions for 2015 by Talented Learning, January 2015. http://talentedlearning.com/top-10-lms-predictions-2015/
3) LMS Industry User Research Report by Capterra, April 2015. http://www.capterra.com/learning-management-system-software/user-research
4) Learning Management Systems: UserView by Software Advice, February 2015. http://www.softwareadvice.com/hr/userview/lms-report-2015/
5) Learning Management Systems: BuyerView by Software Advice, May 2015. http://www.softwareadvice.com/hr/buyerview/lms-report-2015/
6) 2014 State of the Industry Report by Laurie Miller, ATD, November 2014. http://files.astd.org/Research/TD-Article.pdf
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