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Learning
Management Systems:

Enterprise vs. Divisional


Approach:
Which should you choose?

Facts, Analysis, Best Practices


The Emerging Role of PeopleSoft
Abbreviated Version

©Bersin & Associates


September, 2004
Licensed Materials
Version 4.0
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Enterprise Learning Management: The Centralized Approach

The Learning Management Systems


Market Overview
With the explosion of corporate e-learning and internet technologies the market for
learning management systems has been growing rapidly in the last five years. What
was originally a homegrown application has exploded into a vibrant market for vendor
solutions. Bersin & Associates estimates that the packaged learning management
systems market is $380 Million in 2004 and growing at more than 15% per year. We
believe that every organization with more than 1,000 workers needs some type of
learning management system.

Market Trends

(For details on the LMS market, please read our major report LMS 2004: Facts, Analysis
Trends and Vendors – http://store.bersinassociates.com/lms-2004.html.)

©Bersin & Associates 2 August, 2004


Enterprise Learning Management: The Centralized Approach

In May 2004 we asked buyers the top three business reasons for purchasing an LMS. As
Figure 3 shows, there are two types of business drivers: efficiency-based and strategic.
In most companies the cost-justification or business case is based on efficiency drivers:
the LMS will reduce costs, enable e-learning, and streamline training operations.

Strategic drivers, however, are becoming more and more important in large organizations.
These strategic drivers are sometimes more difficult to quantify, but they drive much
higher impact:

©Bersin & Associates 3 August, 2004


Enterprise Learning Management: The Centralized Approach

©Bersin & Associates 4 August, 2004


Enterprise Learning Management: The Centralized Approach

Business Drivers for Learning Management Systems


Why do companies buy Learning Management Systems? LMS implementations are
expensive: it is important to understand the core business drivers which cost-justify
such an application.

©Bersin & Associates 5 August, 2004


Enterprise Learning Management: The Centralized Approach

As this chart shows, enterprise implementations take on a very different


focus from departmental or divisional purchases.

©Bersin & Associates 6 August, 2004