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To Compare LMS Systems the Right Way, You Need to Understand How They Operate


Over the last few years, the traditional learning management system (LMS) has reinvented itself as a learning experience environment over a platform that simply manages learning.

We’d say the next evolution of the LMS segments learning even further, to differentiate between learning management and performance enablement.

So, what does this mean for you, if you’re in the process of procuring one? Now, more than ever, you need to understand how the software itself works. When you factor in costly long-term contracts, the sheer choice of suppliers, your own security needs, IT infrastructure, and the whole reason you’re using a learning management system to begin with, this is not a step you want to skip.

Never fear, the ultimate guide to learning management software is here. We’ll walk you through the basics, offer some use cases, discuss how it’s hosted, and showcase the features and trends to watch out for when comparing systems. 

The rundown on learning management systems

Something to know about the eLearning industry is that it’s forever growing. While this means more innovation from competitive vendors and the credibility of an in-demand market, it also creates a large pool of providers and platforms from which to choose the right LMS for your needs.

Consider: The global eLearning market is expected to be worth $238 billion by 2024. (And that was estimated before a worldwide lockdown flooded the market with thousands of new customers.)

But it’s not just remote work driving that net worth. Online training is anywhere between 30–70% less expensive than face-to-face training in the long run. It saves time by negating the need to travel and reaches new audiences since it isn’t bound to one physical location, only a user’s internet connection.

So, really, there are a few initial questions you want to ask when looking into learning management systems.

  1. What is an LMS, actually?
  2. Who are our users?
  3. What do we need it for?

What is an LMS?

The learning management system is a central repository for the creation, delivery and reporting of online training initiatives. Some systems will give you the ability to author content as well, or pull it from third party software or platforms.

Most LMSs come under the Software-as-a-Service (SaaS) umbrella, a tech term for a cloud-based service accessed via the internet as opposed to one downloaded as an application onto a desktop or internal network. (More on the pros and cons of both later.)

Who are our users?

While the term ‘learning’ may make you inclined to think the LMS is best for educational institutions, many other industries need LMS functionality such as compliance assessment and certification, refresher training, onboarding, offboarding, continual professional development and eCommerce to survive and thrive.

It’s important to understand which of these consumer groups you fit into, because different suppliers will cater to different industries, organisational structures and training objectives.

What do we need an LMS for?

Let’s say you’ve done preliminary research, perhaps even drafted an RFP or RFQ, and now you’re facing the task of reading through a number of responses that go into the dozens of pages. There are many factors you may not have considered.

Many organisational decision-makers become overwhelmed by the sheer number of providers vying for their attention, and we’ve seen many who come to regret purchasing a particular product because they didn’t fully understand the system or their own needs.

It’s then not only a painful process to extricate yourself from a contract, research other systems and go out for tender again, but it’s a waste of resources, time and money, and a trying test of your employees’ enthusiasm for the eLearning experience.

Why use learning management software?

Aside from any of the reasons listed above, why invest in a learning management system?

The short answer is that it streamlines and automates paper-heavy admin processes, and ensures consistent training across teams, departments, franchises, companies and countries.

The long answer is that a powerful learning management system can be a crucial advantage to business strategy, boosting your return on investment, increasing profitability and fast-tracking scalability (yes, really). How so? By:

Recruitment and retention is a two-parter, though the second part generally feeds the first, so we’ll start there.

High performers account for about 80% of organisational results. But rising stars can often burnout, most often because they feel underappreciated and underdeveloped. Your workforce wants opportunities to learn and grow that are in line with their own career aspirations.

Online learning programs make it easy to create and deliver those opportunities at scale. Look for LMSs that can map specific skills, knowledge and behaviours (aka capabilities) to learning content (aka capability mapping), so you can pinpoint the gaps that need to be bridged for career or performance development. While this may require some heavy lifting upfront, it’s more profitable in the long run to re- or upskill current employees than it is to hire new ones.

And what this does is create a culture of continuous learning, which creates a sparkling reputation for your organisation as an employer and saves you money. Around 40% of new employees leave an organisation within the first six months because they feel under-qualified or neglected. Many positions can go unfilled for months or years without the right talent to fill them. Turnover costs a third of an employee’s annual salary to replace not only them, but their output, knowledge and productivity.

But mapping capability can be a static activity if not done continuously. The key to optimising learning software is to embed it (and the relevant training courses and training materials) into the day-to-day.

How amazing would it be to have a system that identifies the capabilities of each individual within your organisation, at any given point in time? The right learning management system can do that.

But what all three of these benefits offer combined is post-training enablement. A learning management system allows for a holistic and proactive approach to performance management, rather than a reactive one.

Instead of trying to correct course after a failed training program, employees get feedback along the learning journey so that performance issues don’t fester. Plus, the combination of an engaging employee training program, personal learning goals, and a flexible learning platform gives employees a greater sense of their place in the wider business operations.

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Types of LMS hosting

A university campus takes up a lot of real estate. Similarly, the data associated with learners needs a large repository to live in. In tech-speak, the term we’re looking for is hosting.

Hosting refers to how data is stored at or in a certain location. (You’ll see why we say at or in later.) How a learning management system is hosted affects not just the type and quality of support you have access to, but also your level of accessibility, network security and how much you have left in your piggy bank when the bills come in.

There are two types of LMS hosting you’ll want to consider: Local and cloud.

  1. Local or on-premise learning management systems are stored on your own data server. In this case, the LMS is simply a product sold to you by the supplier and the onus of maintenance, hardware management and servicing is on your shoulders (on top of learning management).
  2. Cloud-based hosting refers to traditional SaaS platforms. All your data is hosted securely on the vendor’s server, where it is maintained and scaled by said vendor.

Which one you end up choosing is down to your budget, needs and literal physical space, but there are a few key points you’ll want to consider when comparing systems.


Ah, the mysterious cloud. Far and wide the most popular choice for deployment; 87% of LMS buyers opt for it over on-premise alternatives. Its popularity dates back to the rise of Apple’s iCloud and now the term is synonymous in most people’s minds with their data buzzing somewhere up in the heavens. This isn’t technically wrong, as the cloud is simply a term given to data stored via the internet—meaning it has some efficient benefits. 


‘Requires little investment, no physical space and can expand easily and without direction.’ If you would’ve answered, ‘What is elastic scalability?’, you get a point. One reason cloud-based systems are so popular is they can match your input as it grows in real time. The infrastructure used in cloud-based systems is dynamic, taking the burden off IT: The process is almost entirely autonomous, rather than manual and vertical (upgrading to a larger package) or horizontal (physically creating more space).


Today’s learners are untethered and collaborative, seeking on-demand L&D that empowers them to learn. As they’re accessed via the internet, cloud-based systems can be used any time, anywhere, by any learner. In the age of remote and flexible work, it’s almost non-negotiable to offer this kind of ‘ungated’ access.

Cost effective

Many organisations opt for the cloud-based model because it’s simply inexpensive. (Indeed, most of the top learning management systems on directories out there are cloud-based.) There’s no cost for implementation or deployment, and maintenance and support are often bundled into the price you signed up for. (We recommend double-checking with vendors on the latter point, though, as where we like to be transparent with our pricing, others are not so upfront.)

Additionally, many cloud pricing models are based around what you use, further lowering operating costs and allowing you to budget more accurately.


A little closer to earth is the locally hosted learning management system. Once this LMS is in your hands, it’s your responsibility. Hosting on your own data server puts the onus of maintaining, upgrading and running it on you. If you’ve got IT infrastructure already in place to manage this, great. If not, you’ll find it’s a steep and expensive learning curve in the quest for full control.


An in-house team has free reign to develop and enhance your LMS as they see fit. The timeline for upgrades and new features is entirely up to you, if you have the budget, resources and business goals to support the development cycle and any ad hoc costs that may arise. Any problems that may arise will also take priority, and any downtime or maintenance needed can happen when it suits you.


The inherent security of hosting a learning management system on your own server is what draws many organisations in. You might even be based in a location with patchy or no internet access (such as a mining company or franchises in small towns), where a cloud-based service is not viable. It also works if you have strict security protocols surrounding user data.

Smaller upfront cost

Purchasing a learning management system to self-host is like purchasing a house. Once the keys are in your hands, you own it and you’re free to do what you want with it—but it’s also your responsibility.

It’s easy to take cost at face value without factoring in the bigger picture: Your total cost of ownership. Operating costs for data servers will stack up over time, and inevitably, your hardware will need upgrading. So while it may look like a cheap sum now, the real cost of on-premise learning management systems usually hits later.

The importance of where your LMS is hosted

Have you considered that software hosted on your internal servers will limit the number of users who may need to access the LMS offsite? The biggest disadvantage here is that a locally hosted LMS is reliant on your IT infrastructure, including your servers and internet. This could delay career development for employees and strategic workforce planning for your organisation, if learner progress hinges on their physical presence.

It’s important to consider how your choice will impact your budget, learners, business plans and growth now, lest you find yourself with an untenable and expensive platform later.

Even if it’s hosted over the internet, your data will still be anchored somewhere. A user has to connect to at least one data server via the internet to access online courses. Where that data server is located directly impacts where your data is hosted.

Some vendors might be based in one country but host LMS data overseas as it can be cheaper in other jurisdictions. For some, hosting data offshore may seem like a viable way to save money in low-tax countries. Smaller organisations might even see an opportunity to reduce the space needed to store data onsite.

But for Australian organisations, with Australian users, Australian security laws to comply with, and who may not be familiar with the difference between legal disclosure and unauthorised access of data, there’s a chance you may not even be told where your data is stored.

It’s crucial to know as your data is considered resident in the hosting country, meaning it may be subject to another country’s privacy laws. You risk violating clients’ privacy or legal data requirements if you unwittingly allow user or organisational data to be disclosed to overseas parties. That’s a PR nightmare and financial crisis just waiting to happen.

Learning management system features

Many vendors service specific industries or markets, which means the features they offer will be optimised for those end users. When you consider a learning management system is designed to streamline administrative processes, improve efficiency, reduce company costs and increase user engagement, it’s all the more important to considerately weigh up your options.

It’s also crucial to consider the functionality of LMS features. Again, the functionality of a feature might differ across applications. A content library for a university student will be customised entirely to their individual coursework, but a mining company might populate a catalogue with the same compliance training for most—if not all—staff. Similarly, a university student might have time to sit down during the day and watch long-format videos. Corporate executives will likely not, preferring bite-size chunks of information.

While not a comprehensive view, the following features are some of the most indispensable and non-negotiable when comparing learning management systems.

Content development & library

The content housed in your LMS should reflect your brand identity, voice and ideals (particularly if you use a learning management system to sell online courses). Many LMSs offer readymade or pre-populated content libraries, which are great for fast implementation but might not align with your branding.

However, a bigger library of content doesn’t always mean better. You want to ensure that library is relevant and you have mechanisms in place to guide learners down a pathway that is:

  1. Relevant to their performance needs and/or career aspirations
  2. Aligned with organisational and strategic needs.

We suggest querying vendors about the tools they offer for course creation. Some may have an authoring tool within their system, which makes it easy to manage courses, too. Others might allow you to pull content from third party providers and subject matter experts.

The real reason it’s so important to have a comprehensive library of content is so customised development programs can be easily and quickly created. Without the right content in a centralised location, learners will face an uninspiring catalogue of content. This then impacts the quality of learning analytics produced, and can lead to subpar performance management, ill-researched choices for succession planning and poor knowledge retention. 


The true function of accessibility is asynchronous learning, which occurs when learners access coursework in their own time, on their device of choice, and from wherever they are in the world. This is more cost effective and scalable for an organisation as it means learners aren’t restricted to work hours (when they may have other responsibilities or priorities) or locations (such as the office, to which they might have to commute or cannot access outside of work hours).

Accessibility is not just a choice for some, but a need for remote workers, consultants and freelancers, as well as people with disabilities. WCAG is the baseline level of accessibility required by Australian Government agencies, for example. And whilst Internet Explorer enjoyed a heyday, it’s not supported by many new LMS platforms—so if that’s your organisation’s go to, you’ll have to factor that in.


People retain information better when they can share it with others. With a number of integrations, you can ensure that A) your learners can collaboratively master new skills, and B) the system itself can partake in a little sharing of data.

Web-based lectures, live streams, video conferencing and instant messaging (aka channels like Zoom, Adobe Connect, Microsoft Teams and Slack) all facilitate what’s known as synchronous learning. Even through face-to-screen interactions, social interactions foster trust, strengthen team dynamics and solidify new concepts and skills for learners. Lacking a social learning process, the health of organisational structures dependent on teamwork will suffer.

Integrations have the added benefit of ensuring you can push and pull data from other crucial systems into your LMS, such as HRIS (Human Resource Information Systems), payroll, CRMs and third party content providers like Skillsoft or LinkedIn Learning. And without standards like OAuth and xAPI, you can say goodbye to the dream of an internal talent marketplace, because you won’t be able to leverage people data from HR or pull learning analytics back into HR systems.

Compliance management & certification

There are very few organisations who don’t follow the ever-evolving and strict legislation of their industry. Combined with integrations such as HRIS, a learning management system is the easiest way to streamline and automate your compliance management.

We understand well the drawbacks of manual compliance certification and management:

For those job functions with inflexible regulatory requirements, a lack of compliance management can also mean fines, loss of revenue and revocation of any requisite licenses or credentials. Automating the process ensures proper governance, minimises risk and prevents poor or negligent conduct.

You should be asking vendors if their learning management system allows for scheduled reminders and refreshers. This way, learners can be proactively kept abreast of upcoming due dates, rather than reactively scrambling to complete certifications in time.

Learning analytics

Any LMS worth its code will offer a broad range of readymade templates for assessment. We recommend looking for eLearning products that take a qualitative approach to online training. Why? Certain metrics and assessment tasks combine to boost proficiency and productivity to help admin—and the system—better understand gaps in each learner’s knowledge. (Remember when we talked about managing performance better?)

There are a few reasons learning analytics are an important feature of a learning management system.

  1. You won’t be able to accurately create learning pathways without the right methods of assessment or metrics to ensure learners are progressing through those assessments.
  2. If you’re going to all the effort of investing in an LMS, why wouldn’t you make sure you have the right metrics to determine your ROI and if you’re on track to achieve predefined learning outcomes or initiatives?
  3. Without the predictive analytics many LMS can offer, you’ll have to manually slog through pages of data to create individual learning pathways for every learner in your system.

A user-friendly dashboard for tracking progress and reporting on everything from cohort completion rates down to individual user statuses is something to look out for—emphasis on user-friendly. It’s important to ascertain not how advanced and astute reporting functions are. Otherwise, you might find yourself paying for additional plugins or programs that give the depth of reporting you’re after, but which blow out the budget and stakeholders’ expectations.

Much like fashion, trends come and go in the learning software space. Education has adapted to the changing needs and proclivities of not only learners, but the world. (Forgive us the ‘big brain’ moment.)

Some of the first steps have shifted an LMS to be an HR tool. Many an LMS has shifted from a simple learning environment into an internal talent marketplace. This new wave of technology uses learned data to match employees and contingent workers to the work opportunities their talents are best suited for—without HR having to lift a finger, let alone wade through pages of work experience. It also helps institute agile talent processes, provide otherwise untapped career development to employees and expand the talent pool beyond applicants.

And that’s the biggest step forward: First from a management-centric approach to a learning environment, and now to a space of intelligent discovery.

Intelligent discovery is not necessarily new; the LXPs of a few years ago tried to do this, and many LMSs today have “recommended content” functionality. But they can sometimes veer too hard into being libraries of massive open online courses, which, as we already mentioned, are not ideal for truly impactful L&D.

Remember those capability academies we talked about? They’re a place to go for learning. Now imagine that place understood your learning needs. It knew your work experience and training history to date, as well as your career aspirations, and it could put training programs based in front of you based on what you need to progress.

Next generation learning software will be incorporating AI. Think:

Content creation is first off the rank, but we caution that today’s solutions are sometimes tomorrow’s problems. AI isn’t perfect, and that could mean an influx of poor content that muddies the pool of relevant content for learners. The ideal experience will be a co-pilot between learners and a virtual assistant that will vet content for them.

Another future application could be coaching. If we consider some of the factors just discussed—AI’s ability to understand personal needs at scale and it’s system-wide reach—there’s likely to be a point where AI can offer advice and guidance on topics better than some people. (Emphasis on some.) It’ll be useful not just for learners, but managers who can run targeted performance reviews using a coaching assistant.

While the future is bright, it is best not to put on your rose-coloured shades. Many providers will promise you this and that, but AI is still not quite at WALL-E capabilities just yet. Keep a healthy dose of skepticism imbued in your procurement decisions, and know what is actually going to help your workforce versus what’s just a shiny but useless add-on.

Potential issues with LMS software

As with any purchase, there are potential usability issues that come into play that are not solely user error. While these are not life-threatening—and in the case of some like scheduled maintenance, purely unavoidable at times—they should be kept in mind when searching for online training solutions.

System downtime

Regardless of hosting, any software system will ultimately need a little downtime while software engineers introduce new fixes or enact some bug fixes. With a cloud-based system, you won’t have control over when these are done, though most vendors aren’t going to do them at high traffic times.

Even on-premise solutions will require scheduled maintenance to keep things running smoothly. So, while it’s not a real issue in the traditional sense, it is something that will need to be factored in considering anytime, anywhere access may be impeded by system downtime. Make sure to ask vendors what their maintenance schedule is when sending out RFPs.

Outdated tech

Technology is an industry that, while evolving at a faster rate than most, can sometimes trip itself up. An online training solution purchased now could easily be superseded in three years—but if you’re locked into a contract or purchased a license fee, you could find yourself suddenly working with a clunky user interface that isn’t being updated. Even we can admit that cutting edge doesn’t stay cutting edge for too long. The technological infrastructure of most cloud-based learning management systems should allow you to step over this common IT hurdle, as many vendors put utmost importance on innovation and trends that make their platforms more efficient and effective.

No mobile or tablet app

Funnily enough, mobile and tablet applications for LMS aren’t high on the to-do list of many vendors. As an alternative, most will have responsive design built into the user interface, so that a page originally made for a desktop is automatically and logically resized when opened on a smaller screen. And while this is important, there is a difference between mobile layout design and dedicated mobile apps. If a mobile or tablet app is integral to training success, save yourself time and enquire if a vendor offers one before you even get to the point of a demo.

Key takeaways

All the best learning management systems out there can’t make up for poor planning.

There are two key pieces of information that bookend the potential problems of learning software:

  1. Knowing exactly why you are procuring an LMS
  2. The expertise of your vendor (and/or IT team).

Are you setting up a capability academy, and therefore need to be able to create courses, programs and certificates? Does L&D underpin talent and capacity planning? Do you need a mobile learning app? What level of technical support do you require? Depending on provider, the LMS platform can vary in features, functionality and pricing.

Issues will rarely, if ever, be earth-shattering enough to change your mind on investment. But as with anything, it helps to be prepared and know what you’re in for from the start so you can get the best learning management system for your needs.

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