What are Learning Management Systems and how do they work?

Published: 4th February 2020

If there is one thing businesses and academic institutions have in common, it’s the need to stay competitive through better ways of educating, whether it’s workers or students. One such way that has become ubiquitous is through learning management systems.

A study by IBIS Capital found that 41.7% of Fortune 500 companies around the world use this technology to boost their businesses. IBM, meanwhile, found that companies that use learning technologies see a 16% increase in customer satisfaction.

With the market size for learning management systems expected to grow to $22.4 billion by 2023, your company or educational institution must adopt eLearning to not get left behind.

What is a Learning Management System?

A learning management system or LMS is software that lets you create, organise, deliver, and report on training courses and programmes. It acts as a hub for storing and accessing information that can help users learn with efficiency and convenience.

Training assets are uploaded to and organised in the server component of an LMS. User profiles are authenticated and managed in the server as well.

End-users such as administrators, instructors, and students access the LMS through a user interface, which is typically on a web browser.

LMS Types

There are several types of learning management systems that you can choose from, with each one having its own set of advantages and disadvantages:

  1. Open-source

An open-source LMS is often free or offered with paid-for support services. There is a source code that you can modify at will for your company’s specific needs. Setting up an open-source LMS can be resource-intensive and requires programming know-how. Contributions to its continued development are from a broad developer base, which can lead to extensive functionality, sometimes excluded from the “off-the-shelf” solutions (incidentally our own LMS is based on an open-source solution to which we have added features and functions).

2. Commercial

With commercial LMS, you either pay a licensing fee to the vendor to use the software or on a per-user subscription cost, which may include the hosting (this option is becoming increasingly common). There are also freemium learning management systems, which let you use basic features for free but lock advanced functionalities behind a paywall.

3. Managed LMS

With this model, the LMS is managed by a training management company that will handle the hosting, setup configuration, user base, course creation, certification, feature updates, etc. This new model is not offered by many LMS companies, but it is gaining traction among organisations as it takes the burden off their in-house team by letting a reliable management company take over all these costly and time-consuming tasks.

LMS Hosting Options

Some of the LMS products available in the market also offer hosting options for their software. Similar to hosting types, these also come with their pros and cons:

  1. Self-hosted

A self-hosted or locally deployed LMS is software that you have to install and maintain on your own server.

This type of LMS requires a level of IT expertise regarding the installation and management of such applications throughout a whole connected system of devices. Data backups, software updates, and license renewals are your organisation’s responsibility.

Self-hosting will give you a certain level of freedom to modify the environment to fit your organisation’s specific needs, but it will not afford you complete control over the software itself. While controlling the environment is sometimes needed in cases of high compliance and security arrangements, it’s important to note that this requires significant resources, expertise, and maintenance.

2. Cloud-based

As the name suggests, this type of LMS is hosted on the cloud. The vendor takes care of maintaining and updating the software, and no local installation is needed.

You only need to log in to the LMS, which most systems let you do anywhere with a device that has internet access. The biggest downside is that while the solution may offer limited customisation, this will be within the bounds of the vendors’ control and changes are at the behest of the vendor, meaning request from small customers will often be ignored.

LMS Uses

A learning management system facilitates learning, helping users accomplish various purposes such as:


Time is as valuable a resource as any for competitive companies, so getting fresh hires up to speed on work processes and policies as fast as possible is critical. An LMS helps make integrating a new employee faster, especially when they can learn on their own time.

Onboarding via LMS frees up resources like office space, calendar dates, and instructors to conduct training exercises, which can be used for other tasks that have a more immediate impact on a company’s bottom line. The quicker a new hire adopts business protocols, the quicker they can directly contribute to a business’s success.

Employee training

Developing and sharpening skills are crucial to a company’s ability to innovate and stay on the cutting-edge. Employees who get training improve their chances of advancing in their careers and feel valued when their employers invest resources into them.

With the help of an LMS, you can shape promising employees into innovators and leaders more easily while inspiring loyalty and retaining your best talents.

Using an LMS also addresses the real issue of employees lacking confidence. In a survey of 2,400 workers from the US and the UK by Docebo, 32% of respondents feel they are unqualified for their jobs and 33% fear their bosses and colleagues agree.

Extended enterprise

Big businesses with branches across borders face the challenge of keeping their workforce, dealers, suppliers, resellers, and other professional partners up-to-date. An LMS lets an enterprise-level company deploy training courses customised to the needs of each part of their organisation with a unified voice.

Customer education

For businesses that sell products that require technical knowledge (e.g. advanced software, medical devices), customers need to be educated on how to properly use them. Failure to do so leads to frustration on the customers’ end, and in the case of medical devices, can even result in injuries or worse.

Businesses do not have much control over how their products are used once they have been sold to customers. The environment in which customers use these products can also wildly vary. By utilising an easy-to-access and streamlined LMS, large-scale teaching of customers wherever they are is made simpler.

Supply chain education

Businesses can also use LMS to educate the entire supply chain—from training partners, distributors, installers and engineers, as well as end-customers. By centralising training, organisations can update product information and latest practices/skills, increase brand awareness, and provide a regular touchpoint for customers (which could help with marketing and building reputation).

Academic learning

On-campus education is not going to be replaced anytime soon, but online courses are gaining more traction in the academic field. By 2020, almost 25% of all students are projected to be made up of online-only learners.

The benefits of learning at one’s own pace and convenience make it an easy choice for people with other commitments like a job or a family, or those with transportation issues or disabilities. Learning management systems make online academic learning straightforward for schools and students.

Who Uses Learning Management Systems

The ease at which training modules can be deployed with an LMS has made it almost a necessity for a variety of users, including:

Small and medium-sized businesses

SMBs have to manage their limited resources smartly to survive and thrive. Training employees via LMS allows SMBs to optimise the use of their time and money. LMS’s for SMB’s are used in only a small part of training their internal staff; they instead use this for external training to drive product awareness and best practice, to partners, installers, engineers and end-customers.

According to a study compiled by e-Learning platform Zeqr, small businesses have increased their use of e-learning by 900% from 2002 to 2018, and by 2020, 98% of small businesses plan to integrate learning management systems in educating their workers.


As businesses scale up, training a growing workforce becomes unwieldy. An LMS helps streamline the process, while also providing specific programmes for different departments, partners, and customers. The application is similar to small businesses, but enterprises will also have an extensive internal staff training requirement that can utilise the same LMS. Aragon Research predicts that in 2021, 50% of enterprises will have a learning assistant for employees and customers.


Freelancers have to be flexible enough to accommodate the myriad demands of their clients. Learning management systems let them quickly adopt different processes and collaborate on projects.

Educational institutions

From traditional institutions like schools, universities and online academic resource centres, educational courses are being delivered straight to students via learning management systems today. LMS’s for educational institutions are used to supplement traditional learning with fundamentals training, distance learning, further education, and social learning.

Public and non-profit organisations

As with private for-profit companies, government agencies and non-profit organisations can use learning management systems to train their workers more efficiently. Often just as big as enterprises, public and non-profit organisations have similar learning requirements but have a far greater need to reduce costs. Budgets can be an issue, so they usually look at innovative approaches to cover solution costs.

How Learning Management Systems Work

To explain how an LMS works, let’s break down the process into six steps:

  1. Creating courses

A course can be created with wholly original material made within the LMS or with existing material uploaded to the LMS. Courses can be as simple or as complex as required by the organisation and the learners. They may be as straightforward as a single instructional video or they may have many modules that blend online and offline learning, engage learners with a mix of animations, games, virtual reality, and more.

There are advanced learning management systems that allow integration with online resources, such as embedded YouTube videos and social media posts, expanding learning possibilities and situating education in a modern context.

You can also create tests in an LMS to see how much users understand the courses they have taken

2. Organising courses

Putting together courses in an organised manner is the next step. You can make basic courses with a linear progression or more complex networks of courses with multiple branching paths and course requirements.

The more courses you offer, the clearer you should make navigating and interfacing with the courses. Putting courses in distinct categories while accounting for different users is a good idea.

Organising courses ultimately depends on the size and structure of your organisation, so make sure to get an LMS that has the features that accommodate your needs.

3. Deploying courses

With your courses neatly set up, you can then let your learners access them. How they access the courses depends on the deployment model you chose for your LMS (whether it’s self-hosted or cloud-based) and your intended audience.

For onboarding and employee training, such courses are restricted to company use with provided login credentials. For academic purposes, you can offer your courses for free or through a payment scheme. Either way, your LMS should have the feature set to restrict and open up enrollment and process payments.

When providing training to external customers, it is important to have a clear and accessible catalogue that allows for the correct training to be found. When selling training, it is important to have simple e-commerce functionality that allows user to easily purchase training and assign to learners, accepting instant payment or quick order processing.

Mobile accessibility is also critical, as 64% of learners deem it important to be able to access training materials with their mobile devices.

4. Managing users

There are three users of an LMS: administrators, instructors, and learners. Administrators set up the LMS, instructors create courses, and learners take courses.

Managing users includes user registration to the LMS, access restriction to courses, course assignments, student-instructor interaction, exam rollouts, grading, issuing of certifications, and payment processing among other tasks.

You want an LMS that can automate simple functions and let you make multiple modifications directly

5. Monitoring progress

The biggest advantage of using an LMS is the treasure trove of data that you can record and monitor. Training progress is the tracking of learner progress through courses and learning programs, providing certificates and badges which the user can access.

A modern LMS can provide real-time tracking of every bit of information that is processed within the system. From enrolment numbers to course completion rates to grades, you should be able to access such performance metrics quickly and easily.

6. Data mining

Data mining is the large amount of data that the LMS can collect and analyse. This can be used for training improvement, decisions about further learning, understanding customer patterns, etc.

Learning management systems can collate and display these figures in readable charts and graphs. With such data on hand, you can see the effects of your training programmes and map them onto your organisation’s overall performance, whether it’s bigger profits or higher passing rates.


If you want to make sure your organisation stays competitive, implement a premium learning management system to take learning within your organisation to the next level, and reap the rewards of highly skilled learners that are better equipped for the future.

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The author - lloyd smith

The author - Lloyd Smith

Lloyd is the Managing Director of Wahoo Learning. He has a passion for the learning technology industry, particularly the latest innovations and technologies.

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