In our university we use Moodle as the LMS for the online classes.The Moodle Analytics API allows Moodle site managers to define prediction models that combine indicators and a target. To further understand how learning analytics work in the Moodle application, I am sharing a site that will discuss about it:
https://docs.moodle.org/dev/Analytics_API
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To answer the question of what are the potentials in creating and implementing environment with embedded learning analytics activities is that it may really captivate the interest of the learner and measure their potential appropriately as base on their performance and submitted outputs thus the challenge of it is on how they can easily access to these learning or what will their possible struggles be upon doing this type of learning and assessment
Using this type of assessment can actually scrutinize the overall performance of students which though it is time consuming but it is an authentic type of assessing student's that will give a real performance scoring