Before you jump into purchasing a LMS it makes sense to cover the basics, understand the jargon, decide if you want to go it alone or hire a consultant and last but not least realize you are not alone in the process.

Jargon

The industry uses a lot of jargon and it is easy to become confused. Let’s break down the most common terms and two new terms hitting the space.

  • LMS – Learning Management System – most commonly sought out by folks. Can include talent management/performance management features or add-on modules (which are often built into the system, but turned off)
  • LCMS – Learning Content Management System – going the way of the dodo bird
  • M-Learning- Mobile Learning. This means the system can be viewed via a mobile device. It does not mean that the system comes with a native app nor offers online/offline synchronization
  • E-Learning – Online Learning. Many people confuse the term thinking it means electronic learning and thus will boost that they were doing e-learning 20 years ago or even longer. Not true.
  • TM/PM – Talent Management/Performance Management. Used interchangeably. The most common features within this area for a LMS, include 360 feedback, skill gap analysis, performance reviews and skill paths.
  • HCM – Human Capital Management. A HCM will include such modules as compensation, payroll, recruiting (which may include career planning, job postings, etc.), benefits and HRIS (Human Resources Information Systems). You do not have to purchase all the modules. You can pick and choose or buy just one.
  • RCAT – Rapid Content Authoring Tool. This is a product where you build e-learning courses. It is called rapid because you can build quickly without any real tech skill sets. Some tools offer more advanced capabilities and features for folks who have a strong ID (instructional design) or e-learning developer skill sets. Common brands under RCAT – Articulate, Lectora, Captivate, Rapid Intake, dominKnow Claro.
  • Sim Tool – Simulation Tool. Geared towards ID and e-learning developer folks. Tech skill set is required. Not for novices.
  • Authoring Tool. See RCAT.
  • SCORM/SCORM 2004, 1.2, AICCPlease read post covering this topic
  • PENS – Created by AICC in 2005. Offers some nice capabilities compared to SCORM, but not widely used.
  • Users/Seats – This approach is still widely used in the industry. A seat means one user name and one password. So if you have 500 employees who will access the system every month or for the year, then you need 500 seats. Some vendors (and it is gaining steam) offer “active users”.
  • Active users – People who are taking at least one course during the month. Let’s say you have 500 users, but only 100 are taking one course in May. You pay only for those 100 users. The next month, 85 use it. You pay only for 85. There are a few vendors who will charge only when the end user completes a course (but this is rare)
  • E-Commerce model – It is rare, but there are vendors who offer it. It is ideal for B2B and B2C channels. The vendors who offer it (and those who do – do not make it public – so if you want it – you have to ask) tend to charge per course sold. The charge – is a percentile of the sale. You set the price of the course, video, etc. The percentiles are not outrageous.
  • Tin Can API – Better known as Tin Can. Communicates instances between a system and a device. Right now works with mobile devices. Could in the future work with XBox 360, SMART TV and other items of that nature.

Requires a native app (self-contained) on the mobile device and enables online/offline synchronization. Online/Offline synchronization allows the learner to take courses, etc. offline, without an internet connection and then when they have a net connection all instances (data) is communicated back to the LMS or other SaaS product. Some RCAT vendors have the Tin Can API as well as some LMS vendors.

  • API – Application Program Interface. Many systems offer you the ability to add your own APIs and vice versa.
  • LRS – Learning Record Stores. The newest kid on the block. In its simplest terms:
  1. Tied to the Tin Can API.
  2. Stores learning activites which are records
  3. The records are housed in a learning store (repository)
  4. While it can be a standalone it is more likely to be a part of a LMS
  5. If an employee or whomever leaves the company/org., etc. and thus the LMS, and then goes to another system (another company) their learning record can go with them. This will enable the record to be stored in the new LMS of their new employer. The same could apply to customers (although not sure why you would allow it).
  6. If you decide to switch to another system who supports LRSs, the employees/customers records could be moved into the new system, assuming you are having the same courses in the new system. You can have just a few of the previous courses or some materials that they have previously used or even completed test results.
  7. Reported to be the next generation for e-learning and opens up the possibility of true interoperability from one system to the next

At this point, LRSs are really not ready for prime time. As one vendor who has LRS told me, it is still a work in progress and they do not offer it to their customers.

While it has amazing potential, I have some concerns tied to privacy and security, which I believe need to be resolved. These concerns are

  • Would a company want their x-employee to have their learning record which would contain information that exists within your own system? Granted it would be of learning, but I know plenty of companies who do not allow former employees to take any materials, work that was created while employed at the firm.
  • How many clients -i.e. businesses would allow their employees’ learning move from their solution into another, without their consent? Again, it ties back into the previous.
  • Compliance issues and privacy. What about countries who have staunch laws regarding privacy. How would this work?
  • Security concerns. How much data stored in the learning record would be moved? Honestly, if I was a training director for a financial firm or aerospace/defense, I wouldn’t be likely to allow them to take their own learning record. It opens up real security issues.

Do it yourself or Hire a consultant

When it comes time to do the leg work and identify systems that you are interested in and thus take a deeper dive leading to purchasing, the first thing you must do is decide whether to go it alone or hire a consultant.

What are the advantages of hiring a consultant

  • Knowledge and expertise already exists. Assuming the consultant has vast experience in finding systems for clients, the time saved is tremendous. Many consultants, including myself know the market and thus are able to jump right in and move at a quicker pace than say someone who is new or in the process of looking around.
  • Looking for a system or authoring tool can be overwhelming. With over 511 LMSs on the market and more than 140 authoring tools finding the right one can be an exercise in pain and confusion. A consultant will handle it for you and thus enable you to do other things, without having to worry about finding the right system or product.
  • Assist with business processes. If you have never implemented a system, needing assistance in this area will reduce resources and productivity challenges. Not all consultants can offer this, but a few like myself do.
  • Eliminates creating RFPs, shooting them out everywhere and waiting for a response. Plus it eliminates the sales people following up with you and for many people they do not want to deal with that.
  • Time equals money and if you can lower the time spent, the cost for hiring some consultants will be well spent.

Going to Alone

I’ve done it many times – as a training director/manager – and haven’t had any problems. I never did a RFP nor spent more time than necessary to find a system. Sure things have changed – more systems than in any previous year – but if you are willing to take the time to do it – it can be done.

You should have a plan ahead of time of what you want to do and how you want to go about it. Many people don’t and that is where you will find yourself facing challenges.

Always follow these steps, which are essential to finding a system.

  • Try to avoid using a RFP template. There is one vendor out there who has it and many people use it. The problem is that it contains so much information and it is geared toward that said vendor, it will be impossible for other vendors to match every item. Plus, nowadays many vendors can tell when someone is using “said” template and will not respond.

If you are going to use a template (I will be creating one in the near future for folks to use), focus on the key features you will need. Ask them for the price of the system and have it based on the projected number of users (seats) for the first year.

Also have them list the pricing for other items such as setup, SSO (Single Sign On), additional skins (if you plan to have an extended enterprise product), additional languages (the first one is always free) and any additional modules – if you are interested in them.

You always want the items to be listed – i.e. itemized and not one lump price. Find out what is included in the setup fee and whether it is one time or yearly. Make sure to tell them to be very specific when it comes to pricing and seats. Some vendors will tell you they cannot give you a price point. That is totally bogus.

Ask them if they will provide a sandbox (trial) with full access if they are in the top three. Ask them who would be your point of contact – it may not be the person who is doing the RFP.

Even if you choose not to use a RFP, make sure to create a quick spreadsheet listing the features you want – being specific. For example: you want a calendar. But do you want to be able to have the calendar on the home page? Do you want to offer people to register for ILT or webinars on their own? Do you want a wait-list? What about e-mail notifications?

Do you need to have a template within the system? Can you track to see who opened the e-mail notifications and who did not? Do you want to have SMS (text messages), which is growing in popularity? Do you want the ability to color code different sessions, add a brief description, include pricing (if applicable)?

As you can see, just saying one item and assuming the vendor knows what you want is not enough.

Similar to using the RFP, i.e. pricing, setup, training, etc. and the other information presented above, you should do the same if you are talking directly with the sales person.

Ask for specifics. There are some vendors who will refrain from giving you pricing as if their system is a secret project for only a select few.

It makes absolutely no sense. With so many products out there – you have the leverage so use it. I know of only two vendors who fought me on pricing and I ended up walking away. If they are doing this now, what happens when I get the system.

Speaking of features, if you want mobile learning ask them for specifics. There are plenty of vendors who say they offer mobile, but really want they are saying is you can view the system via your mobile web browser.

To me this is not mobile learning. If you want on/off synch ask them. That said, I have vendors who said yes or what do you mean, so expect to provide them information.

Forecast for three years

When you are preparing your game plan, you should focus on three years. This is because that is how long it will take you to build mass. Sure, you might do it earlier, but on average it takes three years.

Let’s say you find your system and want to get down and dirty with the pricing. To score a lower price point, provide estimates on how many users will be in year two and year three. If you have 1,500 employees right now, do you think you will have the same number in three years? If you are rolling it out in stages and in year one only 75 employees will be using it, how many do you think in year two?

Many vendors are now offering/going with “active users”, which is quite beneficial to those of us who do not want to pay for folks not using the system in any given month.

Demos

Only look at products you are seriously interested in. Salespeople will want to ask you some questions ahead of time before scheduling a demo, even if you want one. You will always want to have the demo with only yourself or team and no one else.

Some vendors schedule demos, which means that anyone including you/your team can be on it. I hate that. If you are important to them, they will go one on one with you. Also there are vendors who have demos online for you to see.

The problem is that they are not full demos, but rather pieces. You want the full one and you want to see front and back end of the system. The back end is the administrator’s side.

A vendor who knows what they are doing will ask you questions ahead of time (before the demo) so it can be tailored to what you want to see and need.

Always ask to see a few systems that are skinned/branded so you can get an idea on what a system could look like because the demos are typically vanilla (i.e. no real skins).

Make sure that the designs you are seeing are ones that are included in the price and are not an additional cost i.e. heavily customized by the customer. I’ve seen a few of these and then had to ask the vendor if the client paid extra for such a design.

A vendor who does not want to show you at least the front look and feel of another client, is not worth your time.

Negotiations and Contracts

I have an extensive blog article on this topic, but in a nutshell:

  • Sign only a three year deal. Nothing more, nothing less. You can renew after the three years if you like the system. Some folks who bought the Learn.com system did not care for the Taleo purchase and thus were stuck.
  • Opt out clause at the end of each year of the contract. Before the next year kicks in, you want that opt out clause, which says you can leave the system without any additional penalties or fees. Vendors do not put these into contracts, so you have to negotiate for it. I have only had one vendor who refused to do this – and guess what? I said goodbye. If they aren’t willing to do this for you, how rigid are they going to be or difficult when you need some other things.
  • You want a discount. Never pay street price. Within the industry the discount tends to be 15%, although some vendors are now doing only 10%. If you are a non-profit, education institution or government entity you may get an automatic discount. This is quite common with non-profits but you need to ask and will need to provide a 501 C3.
  • The bigger you are – i.e. size of users/employees the better the discount should be. If you have 50,000 seats you should have a better deal than someone who has 5,00 seats (sadly, this is the case). And that deal should include a better discount.
  • Always have them itemize everything. I’ve seen vendors who have said the discount is in the total price, but how do you really know? You don’t.
  • Also find out if the discount is yearly or only for the first year. What I have done in the past is break out the discount over my three years. One time I had a 20% discount. So what I did was pay full price the first year (when I had less seats), take 5% the 2nd year and then 15% the third year (when I had more seats). Again, some vendors will offer the split, some won’t but you won’t know unless you ask.
  • If the salesperson says he/she cannot offer a discount ask to speak to the sales manager/VP of Sales or whoever is in charge. Nothing against the salesperson, but many cannot offer great deals. However the sales executive can.

Bottom Line

Buying a LMS requires some leg work on your part.

There are more advantages for you than in the past because there are more systems. Not surprisingly there are plenty who do the same if not better than the extremely well known vendors.

More importantly, you do not have to spend 250K or higher on a system. Nor do you have to spend 60K or higher for 500 seats.

The keys to success are right there for you.

It is what you do with them that will make the difference.

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