In this paper we explore the impact of an intelligent grouping algorithm based on learners’ collaborative competency when compared with (a) instructor based Grade Point Average (GPA) method level and (b) random method, on group outcomes and group collaboration problems in an online collaborative learning environment. An intelligent grouping algorithm has been added in a Learning Management System (LMS) which is capable of forming heterogeneous groups based on learners’ collaborative competency level. True experiment design methodology was deployed to examine whether there is any association between group formation method and group scores, learning experiences and group problems. From the findings, all groups had almost similar mean scores in all group tests, and shared many similar group collaboration problems and learning experiences. However, with the understanding that GPA group formation method involves the instructor, may not be dynamic, and the random method does not guarantee heterogeneity based on learner’s collaboration competence level, instructors are more likely to adopt our intelligent grouping method as the findings show that it has similar results. Furthermore, it provides an added advantage in supporting group formation due to its guarantee on heterogeneity, dynamism, and less instructor involvement.