Workday Introduces Learning: A Fresh Approach To The LMS Market

A shoe just dropped in the talent management marketplace. Workday introduced Workday Learning, the company’s new solution for learning management (LMS), career development, video content sharing, and video management. (Workday Learning is scheduled to be generally available in second half of 2016, with early availability starting this year.)

This is a significant announcement for several reasons, and I wanted to share some perspectives on the learning platform market and the potential impact of Workday’s market entry.

The Learning Management Systems (LMS) Market: Big And Growing

Today the LMS market is over $2.6 billion in size  and growing rapidly (more than 20% growth rate in 2014) as many companies replace their older training systems.  The corporate LMS is typically used to administer and manage the complex business of corporate education, which includes class scheduling, e-learning and virtual training, compliance and regulatory tracking, career and professional development, sale of education products to customers and partners, as well as internal video sharing, expertise networks, and some knowledge management.

Because training is so complex and varies widely from company to company, there are many vendors. Some focus on compliance and global training; some focus on video and content management; others focus on professional development and knowledge sharing. Our research identified more than 300 vendors in the market, with a few dominant players (CornerstoneOnDemand, SumTotal, SAP, Oracle, and Saba) each with slightly over 10% market share.

These systems have become mission-critical to most large companies. In industries like financial services, health care, pharmaceuticals, and energy, the LMS manages mandatory compliance training. In large global companies the LMS manages career development programs, onboarding programs, leadership development programs, and functional training programs (IT, project management, quality, etc.). And as a place to store content, the LMS is a vast repository for videos, webcasts, documents, course materials, assessments, e-learning, and tests.

While the LMS market started out 20 years ago as a standalone software category, today most companies want their LMS integrated into their other talent management applications. So all the major LMS companies built out talent management suites to address this need.

The LMS Market Shift:  From Learning Management To Learning 

The LMS market has changed rapidly over the last few decades. As the following chart shows, the market evolved in four stages, following the evolution of learning and HR technology. In the 1980s the systems focused on classroom management: in the 1990s and early 2000s they shifted toward e-learning and online learning; over the last decade they’ve focused on integrated talent management and talent development; and today they are becoming digital learning platform: the YouTube of corporate learning.

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Fig 1: Evolution of the LMS Market (Bersin by Deloitte)

 

Each of these shifts has been driven by a change in technology, leading to new approaches to learning.

  • In the 1970s and 1980s we primarily learned in the classroom and through PC-based videos. The LMS was used for training administration and classroom scheduling.
  • In the  1990s we shifted to internet-based courseware, which was largely consisted of page-turning courses. Standards like AICC let us track progress through courseware so the LMS became an e-learning management system.
  • In the early 2000s the concepts of integrated talent management became popular, so vendors focused on integrating their LMS systems with talent applications.
  • And today, driven by mobile smartphones, bandwidth, social networking, and cameras everywhere, we learn through video, content sharing, MOOCs, and recommendations from others. The modern learning world is filled with expert-authored videos, expert blogs and articles, tweets, webcasts, and an ever-expanding marketplace of external (and internal) content.  The LMS must become a true “learning system.”

The way we learn and interact with content has also changed. While people take longer courses for deep technical training, much of our learning is in 1-2 minute chunks. Vendors like BigThink, Grovo, Khan Academy and many more offer video learning in almost every area of business – including technical development, management skills, and programs for health and wellness. And this growth is likely to continue:  investors have poured more than $2.5 billion  into technology-based education companies in the first half of 2015 alone.

Driven by this shift, today’s learning platforms must help people find learning content quickly (videos, documents, or short courses), make it easy to publish and recommend content, and integrate video and other digital content right into our daily lives. The LMS should operate like iTunes or YouTube or Netflix: wherever I am I should be able to find content I need, play it on my phone, and find other content that’s related.

And now that it’s so easy to author video, companies want the system to help manage content authored by employees, providing content management, digital content distribution, and one click publishing.

Can today’s LMS systems do this?  Often, not very well.

Learning management systems are complex beasts. They have to manage thousands of courses, they are highly customized, and they must integrate into the corporate infrastructure.

When you ask companies about their systems, they often say they are hard to use, complicated, and filled with old or rarely-used content. Since the core paradigm has been the course catalog, employees often don’t enjoy using them (they have to search or scroll through thousands of duplicative courses to find what they need), and there are often too many steps (or clicks) to find, enroll, and consume content.

I just read research conducted by Degreed and CLO Magazine (209 companies responded) which shows that 46% of L&D professionals don’t even log into their corporate learning system more than once per year and only 20% of employees use the LMS for any non-compliance learning at all.

An entire industry of learning experience middleware has developed (companies like Degreed, Pathgather, Xyleme, Fuse, Wisetail and others) to help make these systems work better.

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Fig 2: Evolution of LMS Functionality (Bersin by Deloitte)

Workday’s Strategy:  An Integrated Learning Experience Optimized For Video

Workday has had time to study this market, and is launching a product designed to address many of these issues. The product is intended to offer an easy-to-use, integrated learning experience that can deploy video and online content at the point of need, integrated into the flow of work. The system uses Workday’s analytics technology, recommendations, and feedback tools to recommend content and lets training managers arrange content into campaigns. It runs on mobile devices, includes video content management (technology just acquired), and offers robust, enterprise-class learning management at its core.

Video Is Now Everywhere

Why the focus on video? Well the use of video in learning has been explosive. Analysts believe that 51% of all mobile internet traffic is now video  (some research believe over 80% by 2018) and platforms like YouTube and Facebook now have billions of users watching videos each year. If you have children who use Snapchat or Vine, you know that video is rapidly replacing photos as the most “fun” way to share information, and video is getting more prevalent and easier to author every day (nearly every device we buy now has a camera).

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Fig 3:  Workday Mobile VideoLearning Experience

LMS vendors did see this coming:

  • SuccessFactors (SAP) acquired a video learning company in 2011 (Jambok) and offers a social learning platform called Jam which integrates video learning into its enterprise class LMS.
  • Skillsoft (SumTotal), which sells video learning on many topics, built an new learning experience that curates and integrates its video into a personalized recommendation system.  They are partnering with IBM to provide intelligent recommendations for development.
  • Saba has reinvented its user interface in the last several years and gives recommendations and suggestions to learning, even giving employees points for certain social activities.
  • CornerstoneOnDemand just announced a partnership with Ted.
  • and Oracle has previewed a new video learning platform which they plan to build out into an enterprise-class LMS.

Workday is making video-based learning central and core to Workday Learning, and integrating the use of video throughout the Workday transaction platform. The company hopes to build a compelling, recommendation-based experience that makes corporate learning as fun and easy as YouTube or a consumer website. Think Netflix for corporate learning – the system recommends content based on your usage. And the company is introducing a new idea to facilitate learning: “the opportunity graph,” a way of looking at what your mentors or highly successful peers have done, so you can mimic their career and learning experiences. This is something which appeals to all of us, bringing together social following with big data analytics.

While this is not a new idea, Workday’s technology, integrated platform and architecture, expertise in analytics and machine learning, and focus on the user experience is likely to create a new level of excitement for integrated video-based learning.

(The company acquired a dedicated video learning company (MediaCore) to jump start their technology platform and video expertise.)

How Workday Learning Impacts The Market

This product introduction will impact the market in several important ways.

First, Workday’s focus on shared video makes “video learning” a central feature in the LMS market. While SuccessFactors Jam, Oracle’s Video Learning platform, and smaller vendors like Fuse, Grovo, and Wisetail offer video solutions, this announcement further legitimizes the role of video in corporate learning, encouraging buyers to look at the learning experience as a critical feature in their LMS buying decision.

Second, this announcement starts to end Workday’s partnerships with CornerstoneOnDemand and Saba. Over the years Workday customers who wanted a new integrated LMS have typically purchased one of these products and taken advantage of a productized integration between the platforms. While many customers will continue to integrate these products while Workday’s product comes to market, over the long term these partnerships will likely go away.

Third, this announcement brings Workday into the video content business. While SkillSoft (SumTotal) continues to be a large online content provider, and new vendors like BigThink, Grovo, and MOOCs like edX and Corpu (more about MOOC’s here) will continue to grow, Workday’s “video-centric” platform will encourage content providers to shift to Workday’s platform for integration and publishing, creating a powerful content ecosystem.

Why wouldn’t a content provider focus on one of the fastest-growing platform providers for their marketplace?  When corporate buyers start authoring content for the Workday platform, why wouldn’t Workday offer a content sharing system that lets customers share content with each other?  There are many new possibilities available to Workday here.

Will Workday Learning become an overnight success?  Time will tell – this is a complex market and the company has many features to build. But remember that Workday customers want a single, end-to-end solution with a unified experience and modern cloud architecture – and this is what Workday plans to deliver.

The team at Workday has experience in this space and their vision is clear. Let’s hope Workday helps advance the market and raise the bar for corporate learning for vendors, HR departments, and employees around the world.

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