What Are Learning Management Systems, and How do you Choose One?
Training & Learning

What are Learning Management Systems, and How do you Choose One?

There’s no question that online learning is the way of the future. The 2020 LinkedIn Workplace Learning Report found that 57% of L&D Departments plan to spend more time and money on online learning in the next year. Training Magazine’s 2019 Training Industry Report discovered that 44% of businesses anticipated investing in online tools and systems to facilitate learning.

An effective mechanism for online training is more important than ever since more companies are transitioning to remote or semi-remote work. But it’s not just remote companies that are embracing e-learning. Almost every company can benefit from an asynchronous learning model.

Diving headfirst into learning isn’t as simple as slapping up some online courses. How do you create them? Where will they live? How will you gauge their effectiveness?

Learning management systems are the foundation of online learning. An LMS is the platform you need to create and distribute courses and manage your learning programs. Here’s everything you need to know about learning management systems and how to choose the right system for your company, plus an RFP template to help you narrow it down to the best vendor for you:

RFP template cover

Find the best LMS for your team.

What is a learning management system (LMS)?

A learning management system is software for creating, managing, and delivering e-learning content. Organizations use LMSs and related software to manage their online learning programs. Similarly, a learning content management system (LCMS) is a platform that gives L&D teams the ability to create and share eLearning and training content online, but focuses more on content authoring and management, rather than the administrative aspects.

Learning management systems first appeared in the higher education sector in the late 1990s. These early LMSs, such as Blackboard and Moodle, were facilitation tools for organizing instructor-led online courses. The software was pretty basic. It consisted mostly of defined class modules and assignment-submission features. Most classes involved prerecorded classroom lectures and written course materials.

In the early 2000s, the corporate world began adopting and adapting LMS software to help meet their learning and development (L&D) needs. With an influx of interest and cash, LMSs evolved from clunky e-learning course-delivery systems to comprehensive online learning platforms with course-building, administration, and analytics features. Today, corporate LMSs are a $2.5 billion business, and 79% of all LMS users are outside of the education industry.

How LMSs are used

LMSs help learning managers handle the entire life cycle of the learning process within a company. They’re an essential tool for any company that wants to run a comprehensive online learning program.

Companies use LMSs to build online courses to train and educate their employees. Some LMSs require a separate authoring tool for course creation, while others let you build directly on their platform.

Learning management teams use their LMSs to store, organize, and distribute courses to employees as needed. Employees take courses and submit feedback using the LMS interface. A good LMS lets admins monitor employee progress, view analytics, and recalibrate their learning programs for maximum impact.

Learning managers also use LMSs to manage learning programs within the company. They assign roles and permissions to different users to designate between teachers and learners. Admins organize courses by subject or create specific tracks that employees follow (for example, an onboarding track for new product managers, or a sales training track). They can then track individual employee’s progress and their feedback.

Why your company needs an LMS

An LMS seems like a big outlay for a company that is just starting to flesh out their online learning offerings, but it’s an important investment. You don’t need a dedicated L&D department to find value in an LMS. A good LMS, particularly a collaborative learning tool, makes it easy for anyone in the company to create and share courses.

An LMS is by far the most efficient way to run an online learning program, both for the administrators and for the learners. Ad hoc solutions such as video tutorials on YouTube, instructional documents, and webinars can take you only so far. While you can share some information this way, but without the tools that an LMS provides, you’ll never be able to create an organized learning program. Shifting from in-person or informal online learning programs to a comprehensive online learning system gives your learning programs a huge boost in efficiency and effectiveness.

With an LMS, learning managers can build complete courses quickly,without the help of a developer. All important information is stored in one place so employees can easily find what they need. It’s easy for an online learning program to scale alongside the company, because there is no limit on the number of times you can reuse and refresh each course.

A collaborative learning platform takes this a step further by democratizing the learning process, taking some of the pressure off of learning managers and putting more responsibility on employees to request and create courses. It’s easier to run an efficient training needs analysis because employees directly state what they need to learn about.

An LMS makes courses more impactful and easier to consume. With an LMS, employees can access their learning materials anywhere, which lets them learn on their own schedule and at their own pace. The easier it is for employees to complete online training courses, the more likely they are to actually do it.

Meanwhile, administrators can monitor completion rates to make sure that employees are actually taking advantage of the resources available to them. Back-end analytics and employee feedback help ensure that courses are useful and good quality. Make informed decisions on whether to amplify great courses and cut or rework ineffective ones. All of this leads to more effective use of resources and better ROI on learning programs.

Online learning also helps preserve valuable internal knowledge within the company. If employees share their expertise in an online course, it remains there long after they’ve moved on from the company.

Benefits of a learning management system

The benefits of using an LMS to create more effective online learning programs don’t stop at better-informed employees. The positive effects are far-reaching.

  • Increased employee satisfaction: Online learning programs are more convenient and more enjoyable than sitting in all-day workshops or long training lectures. The 2020 #VyondTheSurface study on Workplace Attitudes found that 51% of employees prefer self-guided online training over instructor-led training.
  • Greater employee retention: The link between career development and employee retention has been well established. According to LinkedIn’s 2018 Workplace Learning Report, a staggering 94% of employees said they would with at a company longer if that company invested in their career. Helping employees learn new skills and grow on the job is a great way to show your commitment to them.
  • More Comprehensive Onboarding: A solid onboarding process sets the tone for life at your company and helps engage and hold on to new employees. Studies have shown that a comprehensive onboarding process makes employees 69% more likely to stay at the job for three years or more.
  • Increased knowledge retention: Online learning gives employees more control over the learning process. They can take their time learning complicated concepts or go back and review past modules as needed. As a result, the Research Institute of America found that elearning boosted retention rates by 25-60%.
  • Reduced L&D costs: An LMS is an investment in the future of learning in your company. While the costs may be high initially, creating online courses that can be repeated as many times as needed is significantly cheaper than running in-person courses. Many large companies have saved thousands or even millions of dollars by switching to an online learning model.
  • Easier team building: While online learning might seem like a solitary activity, new collaborative learning platforms give you the opportunity to pull employees into the process of assessing training needs, building courses, and leaving feedback.
  • Better ROI on training programs: An LMS gives you the tools you need to measure the efficacy of various educational programs. Fine-tune them to get the best return on investment. Some LMSs integrate with other tools (like Salesforce) so that you see the direct correlation between your training and sales numbers. This data lets you allocate your training resources more effectively so that your training dollars stretch further.

Adopting an online learning curriculum doesn’t have to mean shuttering all of your preexisting in-person training programs. Many companies have blended learning programs, which employ a mix of instructor-led training programs and asynchronous LMS elearning programs.

Related: Discover 11 Benefits of Implementing a Learning Management System

Use cases for LMS e-learning

Most companies use an LMS to create standard employee trainings, but the possibilities go far beyond that. Here are just some of the ways you could use online learning to enhance your company’s learning programs.

  • Onboarding: As mentioned above, a strong onboarding process will set the tone for working at your company and will lead to more confident and prepared employees. Organizations that improve their onboarding processes see an 82% increase in new-hire retention and a 70% increase in productivity.

    Onboarding is even more important for remote companies, where employees don’t have the chance to learn from each other in person. A strong remote onboarding process makes up for that knowledge gap and makes sure employees are prepared for both their jobs and their lives at the company.
  • Technology upskilling: According to a report by IBM, more than 120 million workers across all industries will need to be retrained or reskilled over the next three years to handle advances in AI automation. Online training programs are one of the most cost-efficient ways to help employees stay up to date with new technology.
  • Soft skill training: Soft skills are some of the hardest to train for. Create courses to teach conflict resolution, leadership, time-management techniques, and more.
  • Sales enablement: Sales teams benefit from in-depth product training starting from onboarding and moving forward throughout their career. Increasingly, we're seeing a move towards using an LMS to facilitate remote sales training.
  • Compliance training: An LMS is perfect for running compliance training to mitigate company liability and risk because there is a clear record that the employee completed the training. Courses on workplace safety, harassment training, and diversity training all reduce risk and encourage a happier, safer work environment.
  • Customer training: You don’t have to limit your course offerings to people inside your organization. Some companies use their LMS to educate potential clients, onboard new customers, or teach existing customers about new features. Creating a standardized online course is more cost-effective than arranging in-person training for each and every customer.

Types of learning management software

While learning management systems have become the standard term for software that facilitates online learning, there are several adjacent types of learning solutions. Some overlap with LMSs and some serve an entirely different purpose.

All of the learning management acronyms are quite confusing: LMS, TMS, LXP, etc. It’s important to understand the distinctions of each so that you choose the right system to meet your needs.

LMS: Learning Management System

As discussed above, an LMS is a software for managing online learning programs. These platforms facilitate online learning and are a high-level solution for creating, managing, and delivering courses. Moodle, Coursera, Blackboard, and Adobe Captivate are examples of a traditional LMS.

LMSs were the genesis of all other online learning solutions. As the science and technology around online learning has evolved, several other types of online learning systems have emerged.

LXP: Learning Experience Platform

A learning experience platform (LXP, or sometimes LEP), helps distribute courses to employees in an engaging and interactive way. LXPs have some overlap with LMSs (and many new LMSs have built-in LXP solutions) but often you need both for an effective learning experience. LinkedIn Learning, Degreed, and Docebo are examples of LXP solutions.

An LXP personalizes the employee’s learning experience. Instead of an admin assigning relevant courses, employees explore the courses on offer and select those that interest them. It is course content on-demand, kind of like Netflix.

Traditional LMS systems were not designed to be employee-centric. They were created to make managing and distributing courses easier for L&D departments. LXPs, on the other hand, offer a better experience for the learner. They are stand-alone portals for viewing and interacting with content. They provide intuitive design, interactive features, and on-demand access to e-learning content.

LMS vs. LXP comparison. Source: Josh Bersin

This is a little confusing, but one way to look at it is that the company uses an LMS to create and manage content, and employees us an LXP to discover the content.

Collaborative Learning Platform

Collaborative learning platforms are a new breed of online learning software that decentralizes the learning process to create a more democratic learning environment. 360Learning is a collaborative learning platform.

LMS vs. Collaborative Learning platform
LMS vs. Collaborative Learning platform

While traditional LMSs and LXPs put the onus of course creation on the L&D department, collaborative learning platforms make it possible for anyone in the company to create learning content. Employees identify training needs and make course requests. Other employees volunteer to meet those needs and create courses. Administrators help prioritize learning needs and oversee course quality. Learning coaches create learning paths for individual employees.

Whereas LMSs and LXPs offer more traditional top-down approaches, from leader to employee, a collaborative learning platform is bottom-up. This bottom-up approach to course creation is faster, more relevant, and more impact-driven than the traditional centralized approach. The concept of continuous iteration is embedded in the collaborative learning process. People are constantly making requests, creating new courses, and leaving feedback on courses. This results in significantly higher engagement and course completion rates hovering around 85-90%. Overall, the company learns faster and more efficiently.

Related: Centralized vs. Decentralized - Which is the Right L&D Approach for Your Business?

LMS vs. TMS: Training Management System

The difference between an LMS and a traditional training management system (TMS) is subtle but extremely important.

TMSs are not used to organize online learning programs. They instead help organizations optimize back-office training practices for in-person or online instructor-led training. This software is used to do things like schedule courses, handle logistics (registrations, confirmations, etc.) and manage e-commerce data. If you’re running webinars or seminars for clients, a TMS helps you manage that. GoToTraining, SkyPrep, and LearningCart are some TMSs.

This is very different than an LMS, which manages async online learning programs, although the line gets blurry, as each sometimes offers features of the other. Unless you plan to run instructor-led training events, you most likely don’t need a dedicated TMS.


What LMS is best for you?

Choosing a learning management system can feel overwhelming, especially for first-time buyers. How do you narrow down your search when there are literally hundreds of different options out there? The most visible or most popular software might not be the right one for your company’s needs.

We’ve compiled a list of important factors to consider as you make a purchasing decision. Concentrate your search by focusing on the characteristics, features, and flexibility options that best fit your company’s learning needs. The following should give you an idea of what to look for.


Characteristics of the Best Learning Management Systems

Modern LMS systems are capable of so much more than just building and delivering courses. The best systems make the course-creation process easy and provide a top-notch learning experience.

Here are some of the characteristics you should look for in an LMS:

  • An intuitive interface: An LMS is not very useful if it’s too complicated or confusing for your team to use without assistance. Look for an LMS with an easy-to-understand interface on both the front and the back end. It should be simple for administrators to create courses and for users to find and navigate through them.
  • Emphasis on feedback: Courses sometimes go out of date or contain ambiguities, misleading statements, or even flat-out errors. There should be a mechanism for team members to give feedback about the course quality, point out errors, or request more help if they need it.
  • Built-in Course authoring: Unless you have a dedicated instructional designer on staff, and the budget for a separate authoring tool in addition to an LMS, look for an LMS that lets you build courses directly within the platform. You want a code-free editor that preferably lets you drag and drop components for ease of use.
  • Cloud-based: While some larger companies use hard-drive-based, on-premises programs, cloud-based LMSs are infinitely more flexible. because employees can access them from anywhere. Users should be able to access the courses online without downloading special software.
  • Peer learning abilities: Collaborative learning offers so many psychological and practical learning benefits. Look for a system that has mechanisms in place for team members to share their knowledge and learn together. This includes features like discussion boards and peer review and the ability to collaborate on course creation.

LMS features

Every LMS platform offers a unique selection of special features. Here are some of the most common and important LMS features to look out for:

  • Analytics/reporting: Assessing the performance of courses in terms of engagement and completion help you refine your techniques to create more effective courses in the future. Generating analytics also helps you create better reports that justify your continued use of the LMS. Third-party integrations can also help you report training ROI. For example, you could connect your CRM with your LMS to see how trainings affect sales numbers,
  • Mobile Capabilities: Employees are increasingly using their mobile devices to access online courses. It’s easier, it’s more convenient, and it lets employees truly learn from anywhere. An LMS with a responsive mobile design (or a dedicated mobile app) will facilitate easier use. 34% of all companies surveyed by the Association for Talent Development are currently building mlearning (mobile learning) capabilities.
  • Gamification: Humans love games, so one of the easiest ways to promote active learning and up course-completion rates is by gamifying the learning experience. Different LMSs offer different approaches to gamification, including competition between learners, simulations, a points system, and puzzle-solving. Different LMSs offer different approaches to gamification.
  • Customer support: No matter how easy an LMS is to use, you will likely need help at some point. Choose an LMS that offers a communication format (phone, live chat, etc.) and set of support hours that is convenient for you.
  • Third-party integrations. Some LMSs integrate with other tools to help connect your workflows. You could connect to video and animation software to create more interesting courses, or you could connect it with a talent management software to facilitate easier onboarding. Want to know more on integration benefits and best practices? Here's our complete guide to LMS integration.
  • Various content formats: A course that was nothing but text would be pretty boring. Content formats that some but not all LMSs support include video, PowerPoint, webinars, audio files, downloadable documents, and VR/AR capability.
  • AI/personalization: Some LMSs use artificial intelligence to generate courses based on documents or other data, as well as to personalize course recommendations and learning paths.
  • SCORM/Tin Can compliance: Traditional LMSs require L&D to create content using the Sharable Content Object Reference Model, or SCORM. This often means creating the course using a separate authoring tool and then uploading it to the LMS. Newer full-stack LMSs and collaborative learning tools let you create your courses from scratch using platform tools.
  • Co-Authoring Functions: Multi-author functionality lets multiple team members work together to create a more comprehensive course.
  • Instant Feedback functions: Some LMSs offer a feedback survey after course completion. While this is better than nothing, it’s not a very effective way to collect more nuanced feedback about the actual course materials. An LMS that offers instant feedback inside the course lets you drill down to create better content.

LMS pricing models

Most LMS vendors follow a SaaS (software as a service) model, for which businesses pay monthly, depending on their usage. Within that model, there are several different ways that companies set up their pricing tiers:

  • Free (open source): Free LMS options, including Moodle and Canvas. Many of these systems were community-built and open source. They will most likely be lacking in a lot of the features mentioned above but are often highly customizable if you have a knowledgable developer on staff.
  • Freemium: Very basic use of the service is free, but upgrades in terms of users or features would move the account into a pay per month plan.
  • Pay per user: You pay based on the number of users in your system. Plans could be for as few as 10 employees and as many as thousands.
  • Pay per course: You pay based on the number of courses you launch.
  • One-time license fee: Instead of paying monthly, you buy a license to use the software indefinitely. These fees range from a couple of thousand dollars to more than $20,000.

Related: LMS Pricing: The True Costs of Adopting a Learning Management System

Collaborative learning platforms are the future of LMS

A collaborative learning platform is your secret weapon against stagnation. It brings the benefits of in-person learning, community, connection, and collaboration back to the online space. A collaborative learning platform truly democratizes the learning process.

Companies are struggling to keep their training programs up to date, given the rapid changes in technology and in-demand skill sets. As a result, more businesses are turning away from legacy LMSs and toward integrated learning solutions that offer more collaborative learning experiences.

The benefits of collaborative learning are extensive. By crowdsourcing training needs, you can create courses that are more timely and relevant. Because they are required to be both students and teachers, learners benefit from increased engagement and accountability. Courses ship quicker because all of the work is done in-house by people across the organization. And because courses are constantly being iterated based on student feedback, they stay up to date and relevant for much longer.

A learning management system will help you train employees, and a collaborative learning platform takes it a step further to help you create a larger culture of learning inside your company.

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