We often work with customers looking for a new learning management system. They’re just getting into elearning and don’t have an LMS, or they must replace the LMS that doesn’t meet their needs.
Whatever the case, searching for a new LMS can be a daunting process. The last time we checked, there were more than 500 commercial systems on the market and no sign of meaningful consolidation on the horizon. So, where does a customer even start the search?
To be clear: Our company doesn’t sell an LMS or provide full consulting for firms looking to acquire an LMS. On occasion, we take on projects such as performing a comparison of LMS products or helping write a requirements document. But if you need a consultant to work with you through the entire process of researching, deciding, acquiring and implementing an LMS, that’s not us.
But since we’re an elearning course developer with nearly two decades of experience—building hundreds of modules, deploying them on dozens of systems and serving as administrator for several systems—we have a unique and valuable perspective to provide. So, without getting into a debate over one LMS vs. another, here are some recommendations on how to begin your search.
1. Analyze your business needs.
If you’re not clear what your business model is, what you provide customers that’s not negotiable, and how you need the LMS to support your business, you probably won’t select an LMS that’s a good fit for you. So, what’s your model?
Are you a traditional college or university with cohorts, instructor-led online courses, and other systems that keep track of student transcripts?
Are you a corporate university using the LMS to train your internal workforce and track learning records?
Are you a commercial business-to-business training provider selling courses to a variety of different customers for their employees to take?
Or are you a commercial training provider who primarily sells courses directly to students?
Each model has different requirements. One of the biggest mistakes we see is a corporate university or commercial training provider trying to use an LMS designed for a traditional learning institution.
2. Determine your requirements.
Once you understand your business needs, develop a requirements document. This is painstaking detail work but it’s critical to a successful selection. Your document captures everything your LMS needs to do, from storing and managing versions of files to organizing the hierarchy of students, training managers, directors, instructors and anyone else who will need access to courses and student records.
How about your mobile delivery requirements, support for serious gamification, or the capability to track and credit alternative learning experiences? If you don’t have deep experience with LMS operations and features, as well as a full understanding of the educational services you will be providing, it’ll be very difficult to complete this step without the help of a consultant.
3. Decide whether to buy or build.
You can license a great LMS, get someone else to host it and keep it updated, and be ready to launch in 30 days for less than $300 per month. Or you could build your own LMS, hope it works, handle hosting, employ a group of programmers to keep it updated forever as mobile delivery options change, browsers are updated and operating system updates are released—all at a cost of hundreds of thousands of dollars for development plus tens of thousands of dollars a month for maintenance. But don’t count on actually using it for 18 months.
So why not license one of the 500-plus systems out there, instead of building your own? In our experience, most organizations should license an LMS, but there are a couple of situations where building may be your best option.
The first is volume. Most systems charge a variable fee that takes into account the number of your students and enrollments. Typically, the more students you have, the less per student the LMS costs you. However, as your volume rises, you’re still writing bigger and bigger checks to the LMS vendor each year. While the cost per enrollment for the LMS may drop from $2.50 to 25 cents, you’ll see your number of enrollments increase to the point that your total outlay exceeds $100,000 a year. If that’s where you’re headed, it may make sense to build your own LMS. The economics of paying a large annual fee becomes a worse deal than the amortized cost of initial development and the ongoing cost of maintenance.
The other situation to build instead of buy is having a highly unique business model. If you aren’t a traditional college, corporate university or commercial training provider, then you may not find an LMS close enough to your model to support your business without forcing you to change your model. However, we see a lot more companies who think they’re different than companies who really are different enough to warrant building instead of buying.
4. Beware of the "Moodle Myth."
Some organizations are enamored with open-source platforms, most notably Moodle, because they’re free—and who doesn’t like free? We call that the “Moodle Myth." The base code may be free, but you still have to set it up, configure it with plug-ins or original code, host it, support it, update it and become part of the worldwide community of people who follow the bug fixes, known problems, updates and so on. That takes time, resources and investment. And even then, you may not be getting a platform that supports your business.
Moodle is the world's largest LMS platform, based on the number of students supported. But it was built for use by traditional colleges and universities. If you try to implement it for any kind of a commercial learning enterprise, you’ll be buying a half-ton truck and thinking you got a sports car.
5. Don’t forget to budget for content.
Want to look like an idiot in front of your CFO? Then sell your organization on the technology and downplay the amount of investment you’ll need for courses. This is one of the biggest mistakes organizations make with their first LMS. We’ve seen companies spend $500,000 to implement a new LMS and not budget anything for content. That’s often the case when LMS acquisition is delegated to the IT department.
Your content plan is easily as important as your technology plan. You need both voices in the selection process, and you need to realistically forecast what it will cost to build and deploy the learning programs that will attain your business objectives. Otherwise, you’ll have a new car and no gas to get anywhere.
Be especially wary if you’re licensing an LMS that comes with a library of off-the-shelf or "generic" courses. Organizations typically overestimate the number of students who will take and complete generic Microsoft Office training or soft skills programs like customer service and supervision. Those courses have huge abandonment rates, and there’s only limited value in courses that aren’t tailored to your business. Expect to spend half or more of your budget on content during the first two years and at least three quarters of your budget after that.