LMS and Learning Platforms Update

I had an opportunity to present our LMS 2013 research and discuss trends in learning technology to a fully packed audience at the conference. (I was expecting the room to be half-empty, but it completely filled up.) You can read our blogs on the fast-growing LMS market separately, but here are some comments and thoughts from the audience.

• Companies are still (and probably always will be) struggling to figure out which LMS to buy and what to do with the legacy LMSs they already have. Quite a few companies have Taleo-Oracle or SAP and they are looking to the vendors to make clear product roadmaps available.  As many of you know SAP has two LMSs and Oracle has four, so it's important for vendors to clarify their product roadmap to customers.
  
  
• I highlighted many issues in this market, including the fact that LMS platforms have to do many things; today the focus is on supporting social learning, knowledge sharing, extended enterprise training, and making the whole platform much easier to use. 
  
  
• Our research shows that there are now more than 200 LMSs in the market and the analogy I used was the way a garden grows. As one tree gets bigger, it makes room for smaller plants to grow, so no matter how fast companies like CornerstoneOnDemand, SumTotal, or Saba grow or ERP vendors consolidate LMS systems, they simply cannot innovate in all areas of learning technology. Thus lots of small vendors enter the market. So despite the tremendous amount of consolidation which has occurred, the number of vendors is still large and the biggest company only commands 8% market share. Buyers still have to shop around, define their requirements and use-cases, and unfortunately issue RFPs.  (I know that everyone hates these.)
  
  
• Quite a number of companies asked how to manage their "federated" training function - ie. sales training wants their own system, but HR owns the corporate LMS. We've written the book on this, so if this is your challenge I recommend you read The High-Impact Learning Organization or call us - there are some very clear best-practices on managing the federated model. And a critical part of this is standardizing on a "learning architecture" (a set of constrained technology choices and practices for L&D) and making sure you have a corporate LMS that meets your needs.
  
  
• There was a discussion about the role of content management systems in the market, and I reinforced how this technology category has collapsed and now only makes sense for large content development shops.
  
  
• Generally speaking there continues to be tremendous interest in modernized LMS platforms - so please do read our LMS 2013 research and we will schedule more webinars on the whole topic.

Cloud and Other Topics

Bill Kutik mentioned that there were 40+ product announcements this week, so I won't even try to cover them.  The big cloud HRMS vendors (SAP, Oracle, Workday, Ultimate, Salesforce.com, and ADP) were all on stage and everyone seems to have gotten religion about cloud computing in HR. Mike Capone from ADP rightly stated "welcome to our world," as ADP has been delivering cloud services for decades.

When asked about the big business benefits of cloud computing, Stan Swete from Workday, Adam Rogers from Ultimate, and Sanjay Poonen from SAP highlighted the benefits of "all customers being on the same release, enabling customers to gain the benefits of new features continuously." Clearly this is big benefit to both customers and the vendors (they don't have to try to support back-level releases). But the cloud has the potential to provide even greater benefits than eliminating the mess of on-premise software.

I think one of the biggest benefits of cloud computing is the way we can integrate these systems into daily work. John Wookey, the SVP of applications for Salesforce.com, described how their strategy is not to build an end-to-end HR system, but rather to deliver features and capabilites into employees' already-existing work systems (in this case Salesforce).  Work.com consists of a set of embedded modules that integrate with Salesforce to help all employees and managers set goals, reward and recognize each other, develop themselves, and support the performance management process.

This approach is transformational for business, because no matter how "great" we make HR software, it is really only used "when needed." All the wonderful things HR does (coaching, leadership development, assessment, onboarding, training, etc.) shouldn't be locked up in the "HR System" but integrated into employee's daily work environments.

With cloud systems becomes more possible because these systems are very easy to buy (no capital investment) and vendors can provide integration tools directly. The problem is getting vendors to standardize and integrate with each other, preventing a bunch of "proprietary clouds."

I flew home from the conference wondering when there will be some form of API-driven standards (or partnerships) that let cloud HR vendors interoperate with each other. Oracle claims it should be based on SQL and Java (doubtful).

In the meantime there are plenty of partnerships to be had (Workday-Salesforce is a great example), and my belief is that cloud computing will force vendors to create more interoperability.

Think about analytics. If you want to implement a BigData or Talent Analytics strategy (and who doesn't), you have to pull data out of all these systems into some central place. Again we need these systems to interoperate - at the data level as well as the application and user interface level.

Evidence of this trend: many of the inquiries we have right now are questions like "How does cloud vendor X's application tracking or learning management integrate with cloud vendor Y's HRMS?"). So as the cloud market expands, watch vendor-to-vendor interoperability become the next big issue.

A Healthy, Vibrant Market

The exciting news is that the HR technology marketplace is very healthy. Workday's IPO will be a big success (despite the company's huge burn rate), and the market cap of companies like CornerstoneOnDemand, Workday, LinkedIn, as well as valuations for SuccessFactors and Taleo mean that many investors are putting money into this market.

This has resulted in dozens of very interesting companies now focusing on candidate assessment, mining the connections of people in social networks, talent analytics tools, engagement tools, social recognition systems, work management and feedback tools, and tools to help companies build internal communities, career portals, and all the things that get left out by the bigger vendors.

I also think we all should thank Bill Kutik for his tireless focus on making this conference a huge confab for people in this market.  I sometimes feel the conference is a little "over-sponsored" (not only did we get promotions in the hotel room, but the escalators had logos on them and people were leaving brochures behind the urinals in the bathroom!). As Bill said, vendors pay the bills and make this conference possible.

Lots more to come, as we launch our talent management and HR systems research in the coming months. I welcome your comments and feedback and hope others share their perspectives as well.