How Much Does It Cost to Build an LMS

A Learning Management System (LMS) is undoubtedly a powerful tool that enables educational institutions to provide their students with an intuitive and convenient learning environment, setting a standard of easy and accessible education.

Anyway, for every future owner who wants to build an LMS solution, the key question is 'How much does it cost to build a learning management system'. The cost to develop an LMS can’t be described in a simple way. It’s influenced by multiple factors like feature set, LMS solution scalability considerations, platforms of launch, etc.

In this article, you’ll learn about what the LMS cost estimates are made of, discover the main price-impacting factors and find ways to optimize the cost of your LMS solution.

Let’s primarily discuss the key factors that influence complexity and, consequently, the LMS cost estimate. Here are 5 main factors you should keep in mind:

The rule is quite simple: the more your LMS software is staffed with diverse functionality, the more investments you’ll require. Besides, the complexity of features is also a price-impacting factor.

So basic LMS features like user management, course creation, or assessment tools (quizzes, tests, peer review, polls, surveys, etc.) will cost you less than more advanced ones like gamification elements, advanced analytics, social learning, AI-driven technologies (e.g., personalized learning plans, predictive analytics, virtual assistants, etc.) can cost significantly more.

When it comes to customization, you’ll have to thoroughly analyze your business goals. In this way, if your educational institution has specialized learning objectives and unique instructional requirements, highly customized LMS can become a advantage. It’s also applicable to more simple educational projects, but a custom LMS development is more costly than an off-the-shelf e-learning solution.

The UI/UX design of your LMS is an instrument that can attract learners more and make their learning journey more appealing visually and technically. This is the part of an LMS that your users directly encounter, and it should be your goal to facilitate a seamless, intuitive, easy and memorable user experience. However note that a well-crafted custom UI/UX will result in higher learning management system development cost than using pre-made templates and design frameworks.

LMS usually has to be integrated with your existing software systems to make it operate more organically within your business tech environment. The integrations may include HR software, CRM, Content Management Systems (CMS), Virtual Classrooms, Web Conferencing tools, Learning Record Store (LRS), etc. For sure, the more integrations your e-learning software will require, the higher LMS cost estimates you’ll receive.

When it comes to the location of the development team, onshore development, which involves hiring developers from your country, may result in higher expenses if the wages in your region are high. However, you can consider nearshore outsourcing (hiring from neighboring regions with a 1-3 hour time difference) or offshore outsourcing (hiring from a remote destination with 3+ hour time difference). This may help you reach a wider pool of experts, usually with diverse and deep expertise along with a much more reasonable price tag.

It’s pretty clear the more members your development team consists of the more investment it will require. Increased salaries and the need for more coordination among team members may definitely be more costly. At the same time, smaller teams might reduce upfront expenses, but it can take them more time to complete project-related tasks that may potentially increase overall costs in the long run. To avoid making mistakes, reach to an experienced educational app development company that will help you assemble a balanced development team with minimal risks of overpaying.

Before building your own LMS, it’s important to learn more about the options you actually have. So, below, you will find three main types of LMS software and their approximate pricing, including:

• Custom LMS
• Off-the-shelf LMS
• SaaS-based LMS

Custom LMS development involves building a system from scratch based on your unique requirements that you discuss with your IT-vendor prior. The process will definitely require more effort, and consequently, custom learning management system development cost can range from $75,000 to $500,000+. The pricing may differ depending on the scope of the project, functionality selection and your unique specifications.

Ready-made LMS require licensing fees and subscription costs. Here, you can pay per user or even utilize a tired plan when you pay differently based on the extensiveness and level of functionality filling of the chosen LMS. Even though the ready-made LMS cost estimates are hard to predict due to different numbers of users, chosen licensing models, and scalability considerations, the cost of using off-the-shelf LMS is $15,000-$100,000. While the implementation of ready-made LMS will cost you less than the implementation of custom e-learning software, you should allocate finances for setup, training, and migration services. Considering maintenance cost, it may cost you more in the future.

SaaS or Software as a Services Learning Management System is a cloud-hosted software solution that provides educational establishments with a convenient platform for creating, delivering, and managing online learning and training programs. Such LMS is accessed and utilized through a web browser or separately dedicated application, with the software being hosted and maintained by the LMS provider.

SaaS-based LMS often supports multi-tenancy, allowing different educational organizations to use the same instance of the software while maintaining data isolation and customization options. SaaS-based LMS development cost varies from $2,000-$10,000 per year for small and medium size businesses to $50,000-$200,000 for large enterprises with more comprehensive operational needs.

However, if you already have an e-learning software you may also consider utilizing LMS legacy software modernization services. The LMS development cost significantly varies depending on its current needs and conditions. In this way:

• If you need to only extend and enhance current functionality it’ll cost you less
• If you want to completely reconstruct and reorganize the whole system, building an LMS from the ground will be more convenient and cheaper

In this way, if you just need to extend and enhance the feature set it’ll be much cheaper than dealing with renewing LMS infrastructure and reorganizing the whole system. So, to avoid dealing with outdated software renovation, sometimes it’s more cost-effective to create an LMS from scratch.

As you already know what directly affects the LMS development cost, it’s important to acknowledge unobvious things that also significantly influence the LMS financial picture.

Here are four aspects you should remember about:

Users of your LMS software including tutors, learners, and administrators has to basically be proficient within an e-learning platform. High awareness of users can significantly reduce risks of underutilization, or rejection to learn due to incorporation of new, unknown technology. Training program may include instructor-led sessions, textual and video tutorials, that certainly stretches LMS cost estimates.

If you decide to incorporate off-the-shelf or SaaS-based LMS, licensing fees can be a significant learning management system development cost factor. As mentioned, there are various pricing models like one-time licensing fees, recurring subscription fees, or pay-per-user fees. Besides, some LMS vendors offer modular pricing structures, allowing you to purchase additional functionality modules as needed. Before making your choice, thoroughly assess your financial planning, and take into account that some LMS providers’ plans may significantly differ and contain hidden fees.

Imagine that you already have a wonderful, functional, and convenient LMS. But how are you going to engage more enthusiastic learners to expand your existing user base? Branding, marketing, and promotion are the answers, of course. Sadly, it’s not enough to spread your LMS throughout social media platforms. You’ll need to set up targeted ads or hire an SMM specialist, conduct email campaigns, attend education industry events, and engage with SEO or Search Engine Optimization. All this requires time and money, so make sure to include marketing into your planning.

Another aspect is to make your LMS software inclusive and culturally familiar for everyone all around the globe. LMS interface, educational materials and other content, should be accessible and clear for everyone. Efforts associated with translation services, cultural adaptation, and content localization, as well as legal considerations like region-specific regulations and cultural norms compliance, wil definitely add to your LMS cost estimates.

It’s quite easy to memorize all important things at once, especially when it comes to a learning management system development cost. You already know that pricing significantly varies due to LMS complexity, features set, number of integrations, and also LMS type. Below, you can examine an approximate summary of how much does it cost to build a learning management system:

You have to be aware that this numbers are approximate and may significantly differ from your unique LMS software development case. Feel free to contact our team to receive a personalized LMS cost estimation regarding your requirements, desired feature set, and level of customization.

Probably throughout the article, you may wonder, how you can cut costs during LMS development. Let’s see what exactly you can do below:

So, what is the use of a minimum viable product (MVP)? This method enables you to test your learning management system in real-world conditions, adding only core functionality. This way you will more likely avoid overloading the LMS with bulky functionality, and reducing LMS development cost and time. In this way you can launch an LMS more quickly, gathering users feedback and responding to learners' needs faster, making informed decisions.

A lot of businesses decide to outsource e-learning software development, as it opens vast opportunities for reaching rare and narrow software development expertise and considerably cuts learning management system development costs. Apart from this, during outsourcing cooperation, the vendor completely takes responsibility for the LMS development effort and delivery, including project management details. This enables you to focus on core tasks.

However, make sure that the IT vendor is trustworthy through past client reviews, testimonials, and examining their portfolio.

There are multiple outsourcing regions that serve lower rates compared to IT expertise giants like the US, and at the same time do not compromise in quality. For example, Central and Eastern Europe has a wide talent pool of software experts, and is cost efficient in terms of offshore software development.

Outsource and outstaff are both aimed to attract external IT experts. However, oustaffing implies that you retain full control over the development process, project management, and decision-making while outstaffing vendors provide you with skilled and dedicated IT experts who work under your supervision. This allows you to hire highly proficient e-learning software development experts, avoiding overhead LMS development costs associated with hiring full-time employees, and still keep track of every tiniest detail of your LMS creation.

High-quality UI/UX design services are not always about being overly detailed and complicated. Your main goal is to make users’ journeys flow smoothly, simply, and intuitively, and even more importantly, in learning conditions – easily understandable. Minimizing the amount of visual elements, simplifying navigation, and focusing on what the user needs can lower maintenance overhead and help you cut costs on extensive user training.

To put it simply, LMS development costs range from $20,000 to $200,000+ depending on what you choose (limited functionality software or a fully customized LMS). These are the numbers based on our personal experience of e-learning software development and research of well-known platforms such as Clutch and GoodFirms.

Finally, let’s summarize and define how much does it cost to build a learning management system. As you know, a lot of factors matter, including customization matter, the number of integrations, and the types of LMS you decide to utilize. However, to put it short, let’s disclose the LMS development cost through the core functionality of a custom e-learning solution.

Note: These numbers are approximate and may significantly differ depending on your unique requirements, feature set, and required level of customization.

As you can see, the table only contains the time required to build each of the core LMS features. These timeframes are based on our own experience in developing LMS solutions. However, the time and the cost to develop an LMS can’t be interpreted in stable numbers as it may significantly change depending on your unique case.

To clarify this, contact us and receive a personalized LMS cost estimate regarding all your requirements and expectations.

Cleveroad is an education software development company with over 12 years of experience in delivering e-learning solutions for schools, universities, and training institutions. Our dedicated software experts utilize their knowledge to help our clients optimize learning experiences, efficiently manage and deliver educational content, and penetrate online education needs.

By cooperating with us, you’ll receive:

• Practical experience in delivering e-learning solutions: LMS, CMS (Content Management System), e-learning portals, virtual classrooms, SIS (Student Information Systems), and much more
• Flexible cooperation models to choose from based on your cooperation and budget preferences: Dedicated Team, Staff Augmentation, Time & Material, etc.
• Two types of Solution estimated: rough (aimed to orient you on your project pricing and broad-brush development stages) and detailed (a precise cost estimation with nearly 100% accuracy)
• Solution Workshop stage to make your education business needs match technical implementation
• A Project Management Office that helps us oversee your projects to facilitate software creation and delivery aligning with set timelines, budget, and your specific requirements
• Credible quality management approach approved by an ISO 9001 certificate to meet the quality needs of your e-learning software
• ISO 27001-certified security management based on confirmed policies to robust data security

We have extensive expertise in e-learning software development, and all the insights from this article are based on our practical experience.

One of our EdTech cases is Modernization of educational platform for DJs. This is a web and iOS-based mobile app that bridges DJ beginners and professionals within one digital community. The app has a vast educational materials database, and active users can access it online and even offline via iOS devices, contributing to barrier-free and easy learning.

Our team improved the web-application, getting rid of limited WordPress structure and created a custom web app with authorized access. Besides we helped our client to reach iOS users providing them with free MVP, and subscription based version that opens access to DJ hub premium lessons.

As a result, the modernized app makes it easier for users to learn, providing the ability to easily purchase useful educational materials using web or iOS apps as they find convenient. The customer received an additional income source offering monthly/annual plans for the learners.