As of last year, there were estimates of over 800 vendors operating in the LMS market. Each presented a different take on training and education.
Many businesses are on the fence about investing the resources to develop an in-house LMS or paying for a third-party solution. The in-house option is the most flexible, allowing an organization to develop the finished product to meet their needs and standards. However, that flexibility can come at a steep cost. The total price will depend on size and complexity.
There are many steps involved in building a solid LMS platform. Approximately 40 to 100 hours of analysis are needed followed by an equal number of hours spent in designing architecture.
Next, you may need 50 to 80 hours to create two or three design options with revisions and another 50 to 100 hours in building front and backend functionality. Then around 40 hours are estimated for integrations plus another 20 hours for testing afterward.
That doesn’t include more time needed to review code, install third-party tools, create content, and manage the project.
That can total between 400 to 500 hours or between two to three months to build. And that’s really just the first version. Some companies may need a bigger or more complex finished product, which could as much as double the project duration.
If you go this route, then you will need to either hire a team internally or hire someone to build it for you. Professionals charge between $80 and $300 per hour, which means you are investing between $30,000 and $120,000. That doesn’t include the cost of servers to house your LMS.
There’s also an ongoing maintenance expense that never goes away. This is usually between $50 and $220 per hour.
Building and maintaining your own in-house LMS adds up very quickly. That’s why some organizations prefer to let a third-party provider do the heavy lifting for them. What are the benefits of paying someone else to use their LMS instead of building your own?
The Long-Term Cost Is Usually Easier to Budget
It’s impossible to say exactly what your costs will be since each platform has its own billing structure. However, you won’t have to cover that enormous up-front investment. That combined with a steady monthly or annual fee makes it much easier to budget for a third-party LMS.
If you spread the cost of development over time, adding in the ongoing cost of maintenance, most third-party platforms will be a better deal. This is especially true if you do not have any in-house resources available, like a fully staffed development team that can handle all or some of the process.
No New Hire Expenses Required
Speaking of your development team, if you don’t have one, you will need to hire one to build an LMS. This will add to the expense. New hires cost money. According to DevSkiller.com, hiring a software engineer costs around $50,000.
And that’s assuming that the person hired works out in the long term. If they don’t, then you may have to start the process all over again – increasing the cost of building your LMS dev team.
Customer Testimonials and Reviews
It’s easier to see what you’ll end up with if you subscribe to someone else’s LMS. Any platform that’s been around for a while will have customer reviews and testimonials on the web. Most will display them on their official websites, but you should also check out other sources for information.
Find out what users liked or didn’t like so you know if the system has strengths or weaknesses that will affect you. You may also come across problems others had and how they overcame them.
Building your own LMS will give you the ability to make sure the features you need are included. However, you may discover new functionality is needed later and will have to handle updates and changes on your own. Customer reviews give you valuable insight into the LMS’s capabilities before you commit.
You Can See What the Platform Can Do
Marketing materials and websites usually publish an overview of features and benefits. Some also provide access to in-depth support documents that cover how everything works. You can use this material to your advantage before choosing a system.
Find out what the platform can do, if it is user-friendly, and if it can provide all the solutions you need. This information can usually be requested from the developer if it isn’t readily available online.
Most Devs Will Let You Test Drive the LMS
Many LMS providers offer a demo. This may be something you can do on their website or you may have to set up a virtual meeting with a salesperson. This will let you test drive the system before you spend any money on it.
Others may offer a no-commitment subscription option. That means you may only have to pay for one month of use, so you aren’t stuck if you change your mind. Some also include a two-week free trial. There’s no expensive, resource-draining commitment before you get to try out the LMS.
Protect Your Investment with Support
If you build your own LMS, then support will be on you. This can be costly, especially when implementing an unproven system.
Most LMS providers include some level of support with their products. Some even give clients multiple tiers to choose from based on their needs. This can range from basic email support or a ticketing system to 24-hour phone support and live chat.
Some of the more expensive products include a dedicated account manager that’s available for the duration of your contract or subscription.
Updates and Fixes Aren’t Your Problem
Eventually, your LMS will need to be updated or may require a fix. If you use a third-party product, then that isn’t your problem. As long as you choose a reputable company, then your LMS should be kept up to date and secure.
You can check the company’s blog to learn more about recent and past updates or upcoming changes. This will also indicate how active they are and whether they address problems or let them linger.
Access to Third-Party Content
Content development takes time. Quality is important whether you are training employees or selling your courses online. Some LMS developers include access to professionally produced third-party content. This may be their course catalog or one managed by someone else.
While most do not require you to utilize this resource, it can be a real time-saver. You can use third-party content to build your training program or add it in as supplemental to your in-house content. It can be a great way to close skill gaps in your workforce. In either case, it will reduce the amount of time and resources you have to spend on creating new content.
You Can Switch Products with Less Loss
What happens if you find something better than what you are using right now? Well, if you build your own LMS, then you can either invest in getting it up to speed or ditch the whole project. That can mean a lot of money wasted in past development.
If you are paying for a subscription to a third-party LMS, then all you have to do is switch. You didn’t invest in development, so the loss is far less. The only thing you lose is the time and money spent on implementation. And in most cases, that is minimal since many of today’s LMSs are cloud-based and ready to use with little to no downtime.
So Many Options to Choose From
As stated above, there are many LMS providers out there. Each offers their take on things like eLearning, blended learning, and administrative tasks. It may require a little research, but there is a good chance that an existing LMS has everything you need.
Even if you have very specific needs, you can find a platform that handles most of them and integrates with other services. This will give you more flexibility without the in-house development costs.
Learn More About Finding an LMS
Before you sink money and resources into building a custom LMS, make sure there isn’t already one out there that meets your needs. Visit LMS.org to read LMS reviews and find a better way to manage your training program within your budget.