What Is LMS and How Does It Work?

The best way to understand learning management systems is to think about how they’re used and deployed. Some systems are large, complex and used by thousands of students. Others are smaller installations accessed by a handful of employees for in-house training.

Let’s consider the example of a company that wants to provide learning materials for a sales team. The goal is to prepare the team for a forthcoming product launch. A company can use the course builder function within their LMS to create slides, flash cards, documentation, quizzes and certifications. When the course is ready, learners can log in to their individual LMS accounts and access that content.

After completing the course, the employee can complete the associated quizzes or tests. If they pass those tests, they’ll earn a certification that proves they’re fully trained and have the product knowledge required for their job.

Many educational institutions and big businesses use LMS platforms to support their education and training systems. Many schools started to make more extensive use of learning management systems during the pandemic.

Online learning is not a complete substitute for classroom-based education. However, with the right video content, flash cards and interactive quizzes, it’s possible to deliver a good learning experience remotely.

An LMS can be a low-cost way of conveying information and . The platform can deliver content to a large number of people in various locations, and it can test those individuals to ensure they’ve learned the content.

What Are the Benefits of an LMS?

The most obvious benefit of an LMS is that it supports the development of knowledge among students or employees. Let’s dig a little deeper into why an LMS is so useful. First, an LMS gives an organization somewhere to centrally house its training and development content. It can be stored, managed, edited and deleted from within the same software. Multiple people can work on the content, and courses can be updated over time to keep the content current.

An LMS also saves money, since traditional forms of training, such as seminars or training days, directly impact the company’s bottom line. With an LMS, users can access their learning environment from anywhere. Learning can take place at any time, at the learner’s own pace and without draining company resources or incurring travel expenses. The use case of an LMS becomes particularly strong for large companies that regularly recruit short-term staff and need to deliver training regularly. An LMS can improve efficiency for such businesses.

Basic Components of an LMS

With hundreds of learning management systems on the market, it would be hard to find two with identical feature sets. However, there are some fundamental features that no LMS should be without:

  • eLearning Standards Compliance: The ability to exchange data with other eLearning software through compliance with eLearning standards, such as SCORM and Tin-Can.
  • Multichannel Access: Learners should be able to access their account and their course material through desktops, tablets or smartphones. Ideally, the LMS would be browser-based, rather than requiring an app.
  • Course Management, Creation or Importing: Administrators should be able to build courses using a built-in course builder or import course material from other platforms. Administrators should also be able to convert existing slides or text documents into courseware-ready material.
  • Document Management: The ability for students and course managers to upload and manage documents. Those documents could be supplemental course material, coursework or anything else relevant to the curriculum.
  • Course Calendars: Features that support the creation and publication of course schedules, deadlines and test dates. These calendars help learners track their progress through the course.
  • Social Features: Notifications, messaging and discussion forums to promote collaboration among students and encourage knowledge sharing. Well-designed social features can increase learner engagement and improve course completion rates.
  • Tracking and Reporting: Detailed reports should be available, so both administrators and learners can view records of test scores. Administrators should be able to generate detailed reports about overall learner performance. Users can view their own progress and see how close they are to their goal of completing the course.
  • Assessment and Certification: Pre-course assessments (or diagnostic assessments) to assess employee knowledge levels to assign suitable content to them. Digital or physical certification should also be supported.

Enterprise LMS Features

There are many free learning management systems available. These systems contain all the basics required to provide educational content online. However, bigger businesses may need extra features or tools to support their use-cases.

An enterprise learning management system has additional features that make it better suited for delivering training to corporate staff. Those LMS features may include in-house employees or external partners. Those enterprise-specific features can include:

  • Enhanced Security: Many corporate LMS solutions boast single-sign-on, two-factor authentication, firewalls and regular data backups to ensure data security.
  • Scalability: Enterprise LMS platforms are often cloud-based, making them far easier and faster to scale compared to on-premise learning management systems.
  • White Labeling: The company can often brand the LMS, so it appears to be in-house software.
  • Multilingual Support: Enterprise LMS solutions support multiple languages on their user interfaces. This is useful for global companies who need to deliver course material to users in several territories.
  • ILT Classrooms: Instructor-led training classrooms enable learners to attend live-streamed or recorded content with an instructor, whether individually or in groups.
  • Personalization: Personalized learning paths or documentation can be delivered to specific learner groups based on their roles, knowledge or experience.
  • Extensions and Integrations: An enterprise LMS can typically integrate with other eLearning software, communication platforms and CRM systems. This helps administrators provide a more fluid user experience.
  • Gamification: With gamified courses, learners can earn points, badges or digital rewards for completing each class or taking quizzes. Organization-wide leaderboards based on those points help foster a culture of friendly competition.
  • eCommerce: Many enterprise learning management systems boast eCommerce features, so companies can sell training sessions to third parties.
  • API: Some enterprise LMS platform’s features can be extended with custom scripts and plugins. They may offer integration with third-party APIs to facilitate data sharing.

SCORM and Learning Management Systems

The Sharable Content Object Reference Model (SCORM) is a set of standards that describe how learning content should be structured. SCORM-compliant training content should function well when loaded onto any standard learning management system.

What Are Sharable Content Objects?

A Sharable Content Object is a piece of training content. The idea behind SCORM is that training units can be produced for one platform and then shared across other platforms. For example, a company could purchase training materials from multiple third parties and load that material onto their own LMS. Because all the training material is SCORM-compliant, they wouldn’t need to make alterations to the content before uploading it.

A SCO can be as small as a single quote or flash card, a page of training or a full unit. Each SCO can have its own entry in the index, a bookmark and a score attached to it. When a learner uses an LMS, they navigate from SCO to SCO.

What Does SCORM Do?

SCORM governs packaging content and exchanging data at run-time. Packaging content is managed by the Content Aggregation Model (CAM). A manifest document provides the LMS with the information needed to understand the structure of the course. The manifest also describes how it should be laid out from the learner’s perspective.

Run-time communication describes how the content communicates with the server while it’s playing. The content needs to be able to find the LMS and use ‘get’ and ‘set’ calls to communicate with it. The content uses these calls for simple features, such as greeting the learner by name or returning a score after a quiz.

SCORM is not a new technology, but it is constantly evolving. As new forms of media and integrations appear, the standard is updated to support them.

Does SCORM Compatibility Really Matter?

SCORM compatibility is important for any course manager who wants to run third-party courses on their platform. While nonstandard learning management systems may allow educators to create high-quality courses, they make it hard to use third-party content.

Choosing a SCORM-conformant LMS means educators can import courses from almost any mainstream provider and feel confident those courses will run well. SCORM is widely adopted; even the U.S. Department of Defense uses it for digital learning.

SCORM is a reference model for learning management systems. There have been several iterations of the standard. The current SCORM standard is SCORM 2004, which is also known as SCORM 1.3. This version of the standard includes support for rich media and sophisticated interaction between SCOs.

SCORM 2004 has seen several revisions and iterations, including the Experience API and its companion, cmi5. Some older learning management systems are not fully compatible with these extra extensions; however, most platforms are compatible with at least SCORM 1.2.

Should You Make Your Own Content SCORM Conformant?

Educators who are interested in having their work shared widely should make sure any content they create is SCORM-conformant. It makes sense to do this, even if the content is intended for in-house use only.

Creating SCORM-conformant content can be challenging because each learning management system interprets the standard differently. Content creators may wish to use the Rustici Driver to convert their eLearning content into a SCORM-conformant format.

Investing in creating SCORM-conformant courses helps future-proof your content. If a company decides to upgrade or change LMS, porting over old courses should be relatively simple.

Another potential benefit of SCORM-compatible courses is the ease of selling them. A course author can license their courses to other sites for a royalty. A compliance training course for a specific industry could be shared with many LMS hosts. The author can earn a royalty from their content for each customer that uses the course.


If you’re confused about the label LCMS (learning content management system), don’t be.

A LCMS refers to software that’s intended to help developers and administrators build and manage eLearning content. Unlike a LMS, it doesn’t provide the features needed to actually deliver those courses and track learner progress.

The good news is that, in the modern LMS market, almost all learning management systems are also learning content management systems. Many major LMS provide course-building features that allow for course creation and management in the way a traditional LCMS would. At the very least, a major LMS will be able to import course content from Microsoft Office or other legacy platforms.

Administrators can use an LCMS to search and organize content and potentially automate many common tasks relating to producing high-quality courses.

So, choose a powerful LMS, and you’ll get a LCMS as part of the package.

Talent Management System (TMS) vs LMS

Let’s clear up the misconception about the difference between a talent management system and a learning management system.

TMS refers to a software suite comprised of the “four pillars” of talent management: recruitment, performance management, learning and compensation management. Thus, a TMS will typically include an LMS, along with three other software applications that encompass employee recruitment, development and retention.

The value of a TMS is that it integrates several features into one system. This means you only have to learn how to use one tool. However, TMS products are often limited in terms of eLearning features. If you want a specialist learning platform to handle a lot of certifications, look for an LMS designed for that purpose.

Where TMS products truly shine is letting HR track the performance and qualifications of each worker. This can be useful for big companies that track lots of employees and invest heavily in talent development.

Is an LMS Worth the Money?

Enterprise-grade learning management systems are a significant investment. Even deploying an open-source LMS requires computing resources, time and skill. It’s usually easy to sell company leadership on the idea of investing in training and talent development. Demonstrating the return on investment of deploying an LMS is important.

Over the last few years, several large companies have been able to save money by making the switch to eLearning. Ernst and Young reported a 35% reduction in costs by moving training online. IBM reported similar savings from transitioning to eLearning.

Using a learning management system doesn’t just reduce training costs. It can also cut down the length of time training takes. Online training systems allow employees to learn at their leisure. These systems reduce the need for remote or distributed employees to travel. They also mean individual employees can study at a time that suits them. Traditional face-to-face training can tie up multiple employees for classroom-based education during the working day.

A LMS Promotes Collaboration and Engagement

A well-designed LMS can encourage employees or learners to engage with the content they’re studying. It facilitates chat between students and may drive engagement and innovation.

The social and collaborative elements of learning management systems help learners brainstorm and communicate more effectively. Because the platform is digital, there is little friction involved with participating. This means the cooperation that starts on the learning platform is more likely to continue after the students complete the course.

How to Use a LMS to Cut Training Costs

If your company is considering investing in a learning management system, there are several points to consider. A learning management system is a tool, and the results it delivers will depend on how well the system is used within the organization.

1) Consider Which Courses Need Face-to-Face Delivery

Not all educational content is suitable for online delivery. Some training courses work best when delivered face-to-face. Audit all of your courses and consider which ones require real-time, hands-on interaction between the learner and trainer. Interview employees and ask them for feedback on the courses they’ve recently taken.

Use the feedback your employees give you to decide which courses you can move to a LMS. When you implement the LMS, send a survey to students after they complete each module of a course. Consider whether the learners were satisfied with their digital training experience, and ask them what could be done to improve the course.

2) Where Possible, Alter Other Courses to Suit Online Learning

Work with your existing training providers to determine whether modules that are currently better suited to face-to-face delivery need to stay that way. If possible, update the content, so it’s suitable for use on an online training platform.

Some courses will always need to have the learner supervised by a qualified instructor. Perhaps when telepresence and Microsoft Mesh technology improve, hands-on distance learning will become more practical. For now, however, educators have some difficult decisions to make.

Remember that eLearning offers the option of video, interactive content, games, text and audio content. Consider whether you can use multimedia content to deliver more of your training online.

3) Use Live, Synchronous Training to Cut Travel Costs

If your content is best delivered by an instructor who is on hand to provide feedback to learners, use a hybrid model. Live, synchronous training can reduce travel costs and make educational content available to remote workers.

Using a LMS with ILT functionality, companies can deliver training to people all over the world in a cost-efficient way. Synchronous training also encourages employees to communicate and collaborate with each other.

Synchronous training still requires all the trainees to log in at the same time. This means employers should consider time zones and working hours when arranging synchronous training. However, even taking those issues into account, the flexibility of not needing to travel or reserve a meeting room can produce significant cost savings.

4) Use eLearning for Bite-Size, On-Demand Modules

Continuing professional development is an important issue for many industries. Training budgets often struggle to keep up with the demands of recertification and keeping CPD up-to-date. For example, many schools spend just 3% of their budgets on CPD.

Using eLearning, institutions can offer bite-size, on demand courses employees can use for CPD or when they need to refresh their memories.

Asynchronous, on demand training is a cost-effective way of empowering employees to manage their own learning. The main cost to the company, other than maintaining the LMS, is reviewing the content regularly to ensure it’s still up-to-date.

Elearning platforms are only as useful as their content. Make sure you refresh those bite-size modules regularly, so they’re useful to your customer or employee in the long term.

What Are Some Popular LMS Systems?

There are dozens of learning management systems available. Some systems are free and open source. Others are enterprise-grade systems, which can be costly but offer more features and come with ongoing support.

Free and Open Source LMS Recommendations

Some of the most popular free or open-source platforms for learning management include:

  • Moodle
  • GoSkills
  • TalentLMS
  • Thinkific
  • Moodle

The most well-known free and open-source learning platform is Moodle. This open-source platform requires some technical knowledge to set up and customize but is incredibly powerful. The free version of Moodle supports up to 50 users.

MoodleCloud is the premium version of the service. It offers support for more courses and adds features, such as web conferencing and customized certificates.


There are several GoSkills options, including a free version and a premium plan, which costs around $29 per learner. The free plan allows organizations to create their own courses and gives access to a management system for monitoring learner performance. Organizations can add their own branding to the platform, even if they’re on the free plan. The main selling point of the GoSkills premium service is access to the platform’s course library. There are dozens of ready-made courses in the library, covering a variety of subjects, including coding, finance and office skills. GoSkills is a hosted platform and is very easy to use.


Small organizations may find TalentLMS to be a suitable choice. The free version of this cloud-hosted LMS can support up to five users and 10 courses for an unlimited period of time. Course managers can upload their own courses, add branding and generate learner reports.

Premium versions allow organizations to add more users. The basic tier supports up to 50 users for $59 per month. Because this is a cloud-hosted platform there are no maintenance overheads. This makes the platform a good choice for organizations with a smaller IT team.


The Thinkific platform is one of the more powerful free platforms, supporting up to 100 users. Organizations can add courses, host discussions and run surveys. The platform even allows course creators to easily import their existing course content.

Flexible pricing is one of Thinkific’s biggest perks. Organizations can opt to stay on the free plan and pay a nominal fee for each additional user or upgrade to a monthly subscription.

Enterprise LMS Recommendations

If you’re on the hunt for an enterprise-grade LMS, you can start by exploring our guide to 42 Learning Management Systems.

Some of the best learning management systems for enterprise users include:

  • Mindflash
  • Litmos
  • Saba
  • iSpring


Mindflash is an enterprise-friendly platform for learning management. It’s designed for companies that wish to offer educational materials to external contractors. The platform supports desktops and mobile devices and features powerful analytics tools.

It’s these tools that make Mindflash such a good option for enterprise eLearning delivery. Mindflash is a flexible, powerful platform for delivering online training to a large audience.


For companies that want to offer virtual and classroom learning, Litmos is a logical choice. It supports desktop and mobile learning and is equipped with eCommerce features. The platform also does a good job of integrating social tools.

Litmos offers native apps for Android and iOS, giving a fluid experience for users, whether they’re doing asynchronous or instructor-led live training. Litmos is a good choice for companies that want to run a training program for temporary workers or gig workers. The easy-to-use mobile client lends itself to BYOD workplaces.


Cornerstone’s Saba product has a large database of existing eLearning content. It offers personalized recommendations to learners to help them find the right courses for their needs. Collaboration and social features are at the heart of the Saba offering.

One of the best features of Saba is its web conferencing and embedded video features. While any SCORM-conformant platform should support online video well, Saba has integrated video conferencing in a way that offers a slick user experience.


The level of personalization available with iSpring helps this LMS stand out from the crowd. Course managers can send out invite links to learners who have completed specific prerequisites. The iSpring platform supports video content, live training, webinars and static course content.

Users can access courses via desktops or mobile devices, and the mobile client supports accessing learning content and taking tests.

The above LMS products are just a few of the enterprise solutions on the market today. There are many other enterprise LMS offerings to choose from. Consider experimenting with the free trials or using some of the sample courses to test various platforms before settling on one.

Be sure to have employees test the platforms as well. They’ll be your end-users, and their experience with the user interface matters. A great learning platform is one that is easy to use. If the LMS is hard to navigate or users don’t know where to look for content, your employees will become frustrated.

iSpring Learning Management System

iSpring Learning Management System

Should You Opt for Free or Enterprise Systems?

Today, both free/open-source and enterprise LMS offerings are powered by similar technology. The main difference between the platforms is their size, scalability and extra features.

For a small or midsize enterprise, a free or open-source LMS should suffice. These platforms still allow companies to brand their learning environments, offering a professional appearance.

Companies that need to work with a larger number of learners or who want better social features may need to pay more. Enterprise solutions often have better support for ILT and social integration.

Another thing to consider is the existing course library. Many employees would consider access to a large database of training materials to be a good benefit. Weigh the cost of creating your own training materials against that of renting a library of professionally created courses.

Is a Learning Management System Right for Your Business?

Any business that has more than a handful of employees could benefit from having some form of training platform. Large organizations may find Moodle or a similar self-hosted platform offers them the most flexibility.

However, there are many enterprise platforms available today that are delivered as a managed cloud solution. Companies that lack a large in-house team may find Software-as-a-Service (SaaS) deployments useful. With a SaaS solution, you get the power and flexibility of an online course platform without the technical challenges of running it.

If you don’t have skilled trainers on staff, you may wish to hire someone to create courses for you. Remember that simply being good at a job does not qualify you to teach others to do that job. Having an LMS is just one part of the equation.

To get the most out of your LMS, your business will need engaging and interesting course content. Whether the courses are intended for onboarding new staff or training existing employees, the content must hold their interest.

Creating Your Own Certifications for Your LMS

Many companies use their LMS to train and certify workers, so they can keep track of multiskilled employees. Workers with several certifications may be capable of serving in more than one department.

If you intend to use courses to identify skilled workers and monitor knowledge and achievements, make sure the examinations are well-designed. Anyone can memorize a list or regurgitate facts, so it’s important to test understanding throughout your employee training process.

A good course does more than just ask learners to read a long piece of text. Use interactive quizzes in your LMS, and get learners to relate content from one section with that of previous sections. Challenge learners to develop key skills and show a true understanding of the course content.

Quality Courses Pay Off

If you can create quality courses and use them in your employee training process, the investment will pay for itself. Employees who feel like they’re learning and growing are more likely to stay loyal to the company. Bored employees, on the other hand, are likely to leave for a more enjoyable and challenging workplace.

High-quality courses can save you time versus face-to-face training, and they can also save you money. This means a good LMS will pay for itself quite quickly by reducing travel costs and speeding up the training process.

The cost of quality training content is something some businesses overlook when costing the deployment of an LMS. If you’re writing a proposal for deploying a learning management system, consider a cloud-based system. These are cheaper to deploy, and you can use some of the cost savings to pay for a good course author.

Smaller organizations may wish to take advantage of existing course libraries. Renting access to courses from a large library saves you time on creating bespoke content. It also helps you get your employees up to speed more quickly.