What is an LMS? Definition & Use Cases of Business LMS Software

What is a Learning Management System (LMS)?

Discover how — and why — companies use
Learning Management Systems
to train their teams

More and more companies across the world are choosing to deliver their training online. In fact, the eLearning market is growing so fast that it has seen a 900% growth since the beginning of the century. To deliver eLearning courses, companies need a Learning Management System (LMS).

A Learning Management System is the software that companies use to develop, deliver, and track training for their employees, clients, and partners. Until recently, hearing the word “training” made us think of a classroom with an instructor giving a lecture in front of students. And if we were talking about “corporate training,” we would picture a large conference or a day-long workshop.

This is the traditional way of training. Online training has now gained popularity, especially in times where connecting online is easier than meeting in person. As companies, instructors, and learners see the benefits of virtual training, the eLearning market will keep growing.

When companies use an LMS to deliver training online, learners from anywhere in the world can connect with instructors, whether in real time or through recorded sessions. At the same time, trainees have access to online training material (courses, guides, quizzes, videos, etc.) any time they want.

But what is an LMS exactly, and how does it work? Read on to learn how companies build their learning programs with an LMS.

What is an LMS?

What is an LMS? The Definition of Learning Management Systems

An LMS enables you to create, manage, and deliver eLearning courses the same way word processors (like Microsoft Word) help you write documents and email servers (like Gmail) help you manage your email.

And what does LMS stand for? It stands for Learning Management System. Let’s dive into each of these terms to understand the LMS definition better.


L

Learning

because you use it to deliver training courses and programs

M

Management

because it helps you organize these courses 

S

System

because you do everything online and keep all info in one place

A Learning Management System consists of two parts:
  • An admin interface where a training manager performs the core, back-office tasks to organize their company’s learning programs. This is where they create, manage and deliver courses, add learners, analyze reports, automate notifications, etc.
  • A user interface that runs inside your browser (like Gmail or Facebook). This is what learners see when they enroll or are assigned to a course.

So, what does an LMS do exactly?


An LMS helps you:
  • Create: Build online lessons (or eLearning content, as it’s referred to in the industry). You can take individual lessons and turn them into courses.
  • Deliver: Assign, offer, or sell those courses to employees, partners, customers, or a wider audience.
  • Monitor: Enroll and manage your training audiences. You can also track and assess their performance.

Who uses an LMS?

Anybody who's delivering eLearning courses is using an LMS― and that includes a whole lot more than educational institutions.

Here are some examples of different companies and organizations that use an LMS for training:

  • Businesses of all sizes, from large multinational enterprises to small and medium businesses
  • Businesses from a wide range of industries, such as healthcare organizations and tech startups
  • Government organizations, from the United Nations to your local co-op, government agencies, and regional government offices
  • Non-government organizations and nonprofits
  • Consulting firms
  • Traditional educational institutions (schools, universities, colleges)
  • Online and eLearning-based educational institutions
  • Independent instructors and coaches

It’s clear that a Learning Management System can serve different training needs. For example, an expert can use an LMS to sell their courses online, a company can use it to train employees internally, while a consulting agency can train clients on a range of topics.

Let’s see in the next section how companies use an LMS for different purposes.

What can you use an LMS for?

You can use an LMS for all kinds of learning activities (like the "L" in the acronym indicates). That’s why an LMS is an invaluable business tool that has been embraced by enterprises and organizations big and small.

Here are some of the most common uses for an LMS platform:


Train employees

Whether you’re an insurance company, a scooter factory, a hospital, or even a government agency, you’ll often need to train your teams. For example, you might want to provide employees with compliance training, or you might need to teach existing employees new skills.

With a corporate LMS, you can eliminate business disruptions associated with traditional learning because your employees will be able to study the material online at their own pace.

By using an LMS to deliver eLearning, you can cut down on employee training costs, as you’ll spend less money and effort compared to bringing in specialized instructors to give conventional seminars. You will also gain better insights into employee progress with integrated monitoring and reporting tools.


Onboard new hires

You can automate and simplify the all-important task of onboarding a new hire using a business LMS. You still need to greet them in person and give them a tour around the office, but they can study the rest at their own pace (and refer back to the learning material anytime they need).

New hires struggle to remember the details about your company history or compliance policies. With an online onboarding course, though, you can be sure they have access to useful information whenever they want.

Your LMS software is an excellent place to educate your new hires on your company's employee conduct code, privacy guidelines, and race/sexual harassment policies. You can also share details of their role and responsibilities, as well as information about career advancement opportunities and benefits.


Retain employee knowledge

Training your employees is the priority, but learning from them is also vital. Knowledge retention ensures that valuable skills, techniques, and information stay with your company when your employees leave or retire.

An LMS platform is a great fit for this purpose, as you don't want this valuable information to just sit in some document management system that nobody ever checks. It’s a knowledge base readily available to train new employees or people coming from other departments.


Train partners and customers

You don’t have to use your LMS internally only. You could also give access to external partners and your customers.

For example, you can use an LMS to onboard new customers to your products. Or, if you’re an agency that helps companies develop their employees’ soft skills, you can create a course in your LMS and share it with your various clients.


Enable sales teams

Employees in the trenches (e.g., salespeople or customer support professionals)need to update their knowledge constantly.

Online training is the fastest way to inform them about new products and services, industry changes, or new selling techniques. Also, new team members can get onboarding training online and start being productive sooner.


Train remotely

Geographical limitations are a common barrier to traditional training. Multinational companies or businesses with multiple branches struggle to get everyone together for training.

By moving your training online, all team members can access the training material or even attend a live webinar from wherever they are. This will save you a significant amount of money and time.


Support education

An LMS is also a good fit for general educational purposes.

It could be a school selling online lessons, a traditional educational institution supplementing its classroom-based courses, a business educating its clients, or even a government agency or NGO helping educate the general population.


Benefits of using an LMS

The transition from traditional, offline training to eLearning may sound challenging, but the outcomes are worth it. For every dollar spent on eLearning, companies make back $30 in productivity. Besides, having the right tech in place will make this transition smoother.

Here are the benefits of LMS for training:

1. Save training costs:
It’s cost-effective to invest in LMS software once and use it for all your training programs instead of having to organize different events (e.g., conferences and presentations) every time you want to train employees and customers.

2. Update content quickly:
Your training guides don’t have to be outdated anymore. When everything is online, you can make changes to your training content on the spot. Written material or in-person presentations are less effective, as you’ll have to design and deliver from scratch every time something changes.

3. Train no matter the distance:
Remote employees shouldn’t miss out on training opportunities. Whether they work from home or from another location, you don’t have to spend time and money to bring everyone in the same room. Virtual training helps build learning programs even when afar.

4. Engage and motivate learners:
Training is not always about developing skills. Sometimes it’s about getting familiar with company policies or understanding compliance regulations. In those cases, training may sound less than exciting. To make sure that learners stay focused, you can add some interactivity and gamification elements (e.g., quizzes, awards, and internal competitions) using your LMS.

5. Train on the go:
Learning programs can disrupt productivity. For example, conferences that take place during work hours require employees to step out of their tasks on a specific day and time. But choosing an LMS for training means that employees can keep learning even outside the office, at a time that’s most convenient to them. Using a mobile LMS platform, employees can access their training courses during commute or work travel.

6. Improve retention rates:
Employees value career development. Offer them opportunities to build on their skills by creating an online course library inside your LMS. This can be a win-win situation if you build courses that improve company knowledge and help employees gain new competencies or develop their existing skills without moving to a different role.

7. Track results:
Measuring the success of a learning program requires a lot of work. But an LMS takes some of that burden from you. Most LMS platforms generate metrics about user engagement (e.g. how often users log in, when they finish a course, etc.). You can also use LMS reports to evaluate your courses based on how well learners are doing on follow-up tests and assignments.

8. Promote a culture of continuous learning:
Offline training programs are hard to organize, so they usually occur annually or ad hoc when there’s a company need. eLearning courses are simpler to deliver, however, through ready-made courses, online presentations, and webinars. Training won’t be just a box you tick off your to-do list or a one-off event. It’ll help your employees, and your company, continuously improve and adjust.

***

Learning Management Systems don’t benefit companies only. They also make learning better for employees. Here are the benefits employees get when you use a corporate LMS:

1. Skill development at no cost:
If you’re offering a course library, your employees will be able to develop skills useful even outside of work, like communication abilities or empathy. This is a great way to keep employees engaged, as they might not have the resources or the time to take this kind of training on their own.

2. Knowledge that sticks:
You can’t always control how much learners understand and remember after a course. eLearning can be more powerful than traditional learning in this respect. Instead of watching a presentation and then forgetting about it, learners can pause the video during an online course, take notes, go back to a previous lesson or take a follow-up quiz to test their knowledge.

3. Self-paced training:
Learning with a one-size-fits-all program is not possible. Some people can concentrate on a course for a long time, while others prefer smaller chunks of training. Or maybe some of your employees are already familiar with a topic, while others are beginners and need more time to absorb the information. A self-paced eLearning course tackles these different training needs and preferences.

4. Learning from anywhere, any time:
Think about employees who work part-time and have to come to the office on a non-working day to attend a seminar. Or those who have to leave their tasks during a packed day because they need to participate in a pre-scheduled workshop. Not any more. With an LMS, you can build flexible training programs that employees can take whenever they see fit.

5. Unlimited access to training content:
Learners can refer back to a lesson to refresh their memory simply by signing in to the LMS. This is particularly useful to new hires who often get information overload during their first days at work.


Types of LMS

Now that you know what an LMS is, time to take a look at the LMS types. Like most software, there isn't just one type of LMS. In fact, when you begin to search for an LMS to implement in your organization, you may feel overwhelmed by the sheer number of choices that exist.

While all platforms have been designed for training, you’ll find that some of them are more suitable for your learning goals or industry than others.

Let’s break down and compare the main LMS types to help you find out what would be the best fit for your business and training needs.


Based on deployment model #1:
Cloud LMS vs. Self-hosted LMS vs. Private cloud LMS


Cloud-based LMS:

A cloud LMS is one that's made available for you by a third party, usually under a subscription model. Vendors build LMS features that cover a wide range of training needs. But, if you want total flexibility and the ability to make changes to the eLearning platform, you might want to look for a self-hosted option.

The team that created your LMS will take care of installation, updates, and server monitoring. Your cloud provider might also offer free or paid backups, as well as various upgrade options.

Cloud-based options usually come in many different tiers, so you can pick the pricing, performance, and feature combination that matches your needs. Cloud LMS platforms are typically scalable, meaning that you can pick a pricing plan that meets your needs now, and upgrade to a more advanced plan as you grow.


Self-hosted LMS:

A self-hosted LMS platform (or locally-deployed) is basically a web application, usually sold as a licensed product. You install and maintain the platform on your own server, which makes this LMS option more secure.

You need to install a self-hosted LMS on your own and be responsible for things like backing up your data and updating the server software. You'll also need to contact the vendor and renew your license after version upgrades.

On the plus side, this setup provides extra flexibility for integrating with your local infrastructure as well as the option to alter its code to fit any special needs you might have.


Private cloud LMS:

Halfway between the locally-deployed and cloud options, you get a secure and private LMS environment that doesn't share resources or code with other businesses, giving you the best possible performance and security.

Installation, monitoring, and updates are taken care of for you, while you retain direct access to your LMS to customize or integrate it with your other infrastructure.


Based on deployment model #2:
Software as a Service (SaaS) LMS vs. Open-source LMS


Saas LMS:

A cloud LMS runs in a Software As A Service (or SaaS) model. This means that you choose your software provider, run a free trial if available, and then pick a pricing plan based on the features you need.

Most LMS software providers offer different pricing packages, so you can choose the one that covers your needs and not pay for features you won’t be using.

Free plans of paid LMSs are a good option if you have basic training needs. When your team scales and needs more sophisticated features, you can upgrade to a paid plan.

Your LMS will be hosted on the provider’s server, and you won’t need to install anything on your hard drive or computer.

You can rest assured that your LMS vendor takes care of data privacy issues and software bugs.


Open-source LMS:

An open-source LMS, on the other hand, requires a dedicated IT team, as you’ll have to install, customize, and maintain the system on your own. You’ll also need to update the system manually when needed.

You have no licensing costs if you choose an open-source LMS, but you’ll probably have extra costs down the road, as you’ll need to integrate and maintain your system.

You can host an open-source LMS on your company’s server, so you need to pay for that server and hire an internal or external IT team to customize and support your system.


***


Based on use case / industry:
Corporate LMS vs. Education LMS


Corporate LMS:

Businesses usually opt for a corporate LMS to train their employees, partners, clients, or all of them. This way, they keep training material, as well as learner data and progress, in one place.

Many corporate LMSs offer white labeling, so companies can personalize their platform by removing the vendor’s logo and brand name and using their own instead.

Corporate LMSs are usually feature-rich in order to cover various training needs, such as:

  • Onboarding training
  • Employee training
  • Customer training
  • Compliance training
  • Remote workforce training
  • Sales & Customer support training


Education LMS:

Academic or education LMSs are targeted to schools, colleges, universities, or other educational institutions. Students log in and attend instructor-led training (ILT) sessions or read online material. They also complete tests and get graded by their teachers, all inside the same platform.

Content doesn’t have to be updated that often as courses are scheduled in advance and organized in school terms (e.g., semesters, trimesters, or quarters). This means that academic LMSs won’t offer frequent feature and system upgrades.

Also, organizations that pick an academic-based Learning Management System don’t have many tech requirements, like integrations with other tools, but may need support as not all users will be tech-savvy.

While an education LMS is mostly designed for schools, a corporate organization can still use it. Likewise, an educational institution may choose a corporate LMS if that better fits its needs.

At the end of the day, it all comes down to which LMS software is a better companion to your learning programs.

How an LMS works

How an LMS works

Once you’ve chosen the best LMS for your training needs, it’ll be time to start building your learning environment. Before launching a training program, you usually take the following steps.

Create an eLearning course

In order to deliver your eLearning content, you first need to add it to your LMS.

You can do this by either creating your course material from scratch (i.e., writing your lessons' content inside the LMS) or adding existing material (a Word document, a PowerPoint presentation, Wikipedia articles, etc.).

Advanced LMS software, like TalentLMS, lets you add course material from various sources and in different formats. You can even incorporate multimedia files (video, audio, graphics, etc.) into your lessons.

Another essential feature related to course creation is the easy inclusion of online assets (from YouTube videos and Wikipedia articles to online presentations and tweets), which allows you to leverage the wealth of material available online.

Organize your courses

The next step is to organize your eLearning courses.

This can be as simple as offering a single course or as complicated as deploying multiple courses for departments and student groups operating across several branches.

It all depends on the needs and structure of your organization. The best LMSs should let you structure your eLearning courses in any way you want.

In TalentLMS, for example, you can combine a set of organizational tools (courses, groups, categories, skills, branches, etc.) and have the ultimate flexibility in how you deliver your lessons. No matter if you are a multinational with branches in 20 countries or a small business in a single city.

Deliver your courses

After you have created and organized your courses, you're ready to deliver them to your learners.

How you go about it depends, again, on the needs and structure of your business.

For example, your courses might be made for a restricted audience ― e.g., for employee training inside your company. Or, they might be available to a wider audience, either as a free offering (like in the case of an NGO teaching specific skills to people in developing countries) or as paid courses (e.g., an online school offering web programming courses).

A modern LMS should handle all these cases so that you can serve and manage both small and large numbers of students, offer restricted or open enrollment, and easily integrate the platform with payment processors for paid courses.

The best LMS platforms should also be able to cater to mobile devices, with responsive user interfaces, touch-friendly interaction, and offline accessible modes.

Managing LMS users

Manage users

The ability to manage courses and users is what puts the "M" in LMS.

As we have already covered course management, let's see how an LMS can help you manage your users.

To begin with, there will be three kinds of users. These users may have different names depending on the LMS you choose. But, generally, they are:

  • Administrators — the people setting up and configuring the LMS
  • Instructors — the people preparing the lessons and accessing learner progress
  • Learners — the people doing the learning

In a smaller business or organization, the administrator or instructor could be the same person. After all, setting up a user-friendly LMS, like TalentLMS, is no more difficult than using Facebook.

As for the learners, those could be your employees (if you are an enterprise, large organization, government agency, or private business) or students enrolled in your courses (if you are an educational institution offering lessons to the general public).

Managing those users involves:

  • adding them to the LMS
  • assigning them to courses
  • interacting with them as instructor
  • determining what kind of content they are allowed to see
  • assigning tests and keeping an eye on the progress
  • handling their payments (if you're selling courses)

A good LMS takes the tedium out of these tasks, automating repeated actions and allowing you to perform changes and updates to multiple items at once.

Evaluating progress

Monitor and assess learner progress

One of the most important features an LMS offers (and a huge time-saver) is the ability to track and monitor learner progress in real time.

Whether you're dealing with 10 or 10,000 students, an LMS gives you automated and quick access to course enrollment statistics, attendance records, student grades, and many other performance metrics.

The best LMSs should also include real-time alerts and notifications. For example, an automated notification lets instructors know that a student has submitted their homework or that a webinar session is about to begin.

Another must for advanced LMS platforms is reporting — that is, the ability to query and display data in graphs and charts, so you can easily spot trends or issues (and to have something nice to show in your next board meeting).

TalentLMS, for example, allows you to filter student and course information in multiple ways(e.g., "show me only students from department X enrolled in class A,” or "show me the test scores for this particular student"). You can also get aggregated statistics, which you can export in Excel-compatible format.

LMS features to look for

What are the main LMS features to look for?

What is an LMS? Check. What does an LMS do? Check. Next, you need to learn about the features that help you achieve your training goals.

Here are some of the main features you’ll need to create a better learning experience for your learners and streamline course management for you.

These LMS features are:

  • Branding and/or customization of the LMS user interface

  • Webinar and virtual training sessions hosting, enabling multiple students to participate through audio and video

  • Gamification options, so that training managers can set goals and learners can see their progress, get rewards, or even have internal competitions with their team members

  • Mobile-friendly design, so you can use your LMS on smartphones and tablets and enable learners to study when offline

  • Integration with third-party systems and data exchange through eLearning standards such as SCORM and xAPI

  • Addition of your own custom scripts and plugins, based on a publicly available and well-documented API

  • Option to sell your courses and integration with payment processors, such as PayPal and Stripe

How to choose the best LMS

Now that you have a pretty good idea of what you can achieve with an LMS, it’s time to add one to your shopping cart. But which one? The short answer is that the best LMS is the one that covers your training needs without hurting your budget.

Follow the next steps to do market research that will help you determine which is the best LMS for your company:


1. Prioritize your needs

Surely, you want to buy the perfect LMS. But what’s perfect for one company is less than ideal for another. So, first, you need to separate must-haves from nice-to-haves, based on your specific requirements.

For example:

  • If you don’t have a dedicated internal IT team to set up and update your system, go for a cloud-based LMS that’s easy to use.

  • If you have a tight budget, look among LMSs offering various pricing plans, and choose the one that includes the basic features.

  • If you have multiple departments, clients, or branches that you want to train, pick an LMS that lets you create separate training programs for each of them using the same account.

  • If you’re selling (or want to sell) online courses, check which LMSs support the payment systems of your preference and include marketing-related features.

  • If you want to keep track of your learning, choose an LMS with a strong reporting suite.

2. Read customer reviews

Do your research inside the LMS vendor’s site to find out what others say about the software. Review sites will tell you what previous users loved about the LMS and what pain points they had.

You can also read case studies and testimonials, which you can usually find on the LMS website. Keep an eye out for companies of your size and industry. This is a hint that the LMS might be a good fit for you, too.

When reading reviews and testimonials, prioritize your specific requirements, must-haves, and deal-breakers. For example, if you’re looking to start using your LMS as soon as possible, compare the different LMS platforms based on time to go live. Or, if you’re on a budget, pitch to your boss an LMS with a promising ROI.


3. Try for free

Some LMS vendors offer free trials. This can be very useful, as you’ll get the chance to test the product yourself before committing to a pricing plan.

You’ll identify if the system meets all your needs, how easy it is to use (e.g., to create courses and assign new users) and whether there are technical issues you want to address with the support team.

Finally, after you’ve considered everything, create a shortlist of 2-3 LMS platforms and pick the one that ticks the most of your high-priority boxes.

You can download and use this LMS comparison guide to compare different platforms side by side and make your final choice easier.

Why choose TalentLMS

TalentLMS is a Learning Management System built for success. With an experience that’s fully customizable, easy to manage, and a joy to use, teams embrace training while feeling right at home.

More than 70,000 teams of all shapes, sizes, and industries across the world trust TalentLMS because it is:

  • Easy to use (both for users and admins)
  • Budget-friendly
  • Ready to go, right out of the box (can even be set up in one day!)
  • Available on mobile devices, including phones and tablets
  • Easily customizable


For more detailed reviews and testimonials, see what customers say about TalentLMS on our website or independent review sites like Capterra and G2.

Or, create an account for free today and see for yourself how TalentLMS can help you reach your training goals.