Learning management systems might seem like the hot new thing in the human resources world, but they have actually been around since the ’90s. While the concept is nothing new, the market and the technology have evolved significantly over the decades. The industry has grown by leaps and bounds since 2000, and the online LMS market has exploded; it's on track to generate $7.8 billion in revenue this year.

One of the most recent innovations in the market is cloud-based systems. Otherwise known as software-as-a-service solutions, cloud-based LMS platforms are accessible whenever and wherever users have stable internet connections. The software is hosted by a third-party vendor, which handles any updates and related data storage for the system.

This is in stark contrast to traditional LMS platforms, which are installed locally and hosted by users. The differences don’t stop there, though. There are a number of other factors to consider when deciding whether a cloud-based LMS is right for your company.

Taking it to the cloud

Cloud LMS solutions break down barriers in terms of accessibility, ease of use and maintenance. They offer continuous learning opportunities for your entire workforce, helping your organization achieve its goals and retain top talent.

The increased effectiveness of your online training improves your return on investment and employee engagement. When employees get the tools they need to succeed, they are more satisfied in their positions and tend to perform better. A lower employee turnover rate translates to reduced brain drain and less time spent seeking and training new hires.

A cloud-based LMS is so effective because the location isn't a constraint. Team members are able to access necessary resources immediately, regardless of their location. New hires can begin the onboarding process before their first day in the office, reducing their learning curve by reviewing training materials ahead of time. Additionally, learning and development teams have the ability to access and update existing materials from anywhere.

Regardless of industry, your company can benefit from a cloud-based solution. Their scalability makes them great for organizations of all sizes, and the software can be deployed rapidly with relatively low setup costs.

While the benefits of a cloud-based LMS are plentiful, there are still valid reasons to stick with a traditional platform. Let's dive deeper into the advantages of both solutions to determine which might be right for you.

Finding an LMS worth your investment

Beyond evaluating your employee needs, spend some time examining your organization's resources in terms of skills, time and money. Here's how those considerations should factor into your decision:

1. Consider the skill set of your learning and development team.
   There’s no programming or coding knowledge required with a cloud-based platform. Deploying training content globally is just a matter of a quick upload. If your team has limited experience or tech know-how, a cloud-based LMS is easier to master thanks to its user-friendly interface. The vendor takes care of the back-end design for you, allowing your team to focus on making memorable content and monitoring employee performance.
   
   This sort of setup might not be ideal for organizations that want to personalize every aspect of an LMS — or that have the IT expertise to do so. If you have resources to devote to both content creation and the technical side of your training platform, the ease of a cloud-based platform might be lost on you.

2. Calculate your LMS budget, and account for future growth.
   Payment terms can also dictate your decision. Cloud-based LMS solutions typically include a monthly subscription fee, while some SaaS vendors charge based on the number of users or the features and functions you choose. No two payment structures are identical, so decide which model works best for your situation.

3. Rank “customization” on your list of LMS priorities.
   One of the drawbacks often cited for cloud-based solutions is that they limit customization. If tailoring every component of the system is a top priority for your company, a hosted solution might be your best bet. This option allows you to alter certain aspects of the coding or overhaul the user interface to ensure it seamlessly meshes with your branding.
   
   While they’re not quite as customizable, many cloud-based LMSs allow you to personalize some aspects of the platform, such as the color scheme and dashboard. If you don’t require customization beyond this surface level, a cloud-based solution could meet your needs.

4. Identify the preferences and needs of your workforce.
   Beyond the benefits and drawbacks of a cloud-based LMS for your development team, it’s also crucial to consider the needs and preferences of your workforce — after all, they will be the ones using the platform. As such, accessibility and device preferences are two major considerations.
   
   If employees only need to access the online training resources using computers at their workstations, a self-hosted LMS is perfectly viable. If they need to access those training materials beyond normal business hours (and on a variety of devices), a cloud LMS solution is the way to go. Imagine all the scenarios in which your employees might need to access your platform, and plan accordingly.

A cloud-based LMS is not the right fit for every company — and that's OK. It is a cost-effective way to deploy online training rapidly, improve accessibility and eliminate the IT headaches often associated with self-hosted solutions. The key is to find the right platform for your organization’s needs, budget and size. Do your homework by reading reviews, browsing online directories, vetting potential vendors, and ensuring your list of learning and development objectives is top of mind.