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LMS Development: From Concept to Robust Software

Yuliia Podorozhko
Market Researcher

Looking for a way to deliver lessons and courses or train your staff more efficiently? Consider following the lead of successful multinationals, banks, restaurant chains, and small businesses that developed customised learning management systems (LMSs). For example, Citigroup, a multinational investment bank with 200,000-plus employees in 160 countries, had a fragmented and frustrating employee training process. To resolve this problem, they created an LMS that helped gather and store learning materials, create courses, and train employees — even amid COVID-19 lockdowns.

To get started on the right foot, use this article as a guide to LMS development. It provides key information on how to develop an LMS including core features, monetization models, and cost estimations. We also take a closer look at the LMS market in general.

What is an LMS?

Learning management systems (aka LMSs) are online platforms for creating and integrating course materials, aligning content and assessments, tracking study progress, and creating customised tests for students. In a school context, an LMS may provide classroom management, enable a flipped classroom model, and make automated suggestions for courses according to a user's skill profile. In addition, built-in customisable features such as assessment and tracking allow students to see their progress in real-time, and teachers to monitor the effectiveness of their lessons.

lms progress tracking

Although the original LMSs were developed for the higher education sector, the bulk today are geared towards the corporate market. LMSs help companies onboard new employees and provide newbies with the necessary manuals, documents, and online training.

Is investing in LMS development worth your money?

Recent research from MarketsandMarkets indicates that the global LMS market is expected to grow from $13.4 billion in 2020 to $25.7 billion by 2025. North America is predicted to hold the largest market share during this period. Major factors driving the LMS market include the growing adoption of digital learning, which has been accelerated by the COVID-19 pandemic, Bring Your Own Device (BYOD) and Work From Home (WFH) policies, continuous government initiatives for the growth of LMSs, and the increased use of Artificial Intelligence (AI) and Machine Learning (ML) in LMSs.

lms market

The corporate LMS market is going to show significant growth as well. According to a Valuates report, it’s projected to hit $9296 million by 2026. The corporate LMS market’s rise is fueled by the benefits LMSs offer businesses: significant cost savings over traditional learning systems and a demonstrated increase in both employee productivity and efficiency. 

In addition, businesses are being forced into remote work models. Even as pandemic restrictions lessen, a rising number of employees are embracing a YOLO approach and demanding flexible and hybrid work models. This shift has also given rise to greater discourse around corporate inclusivity practices and role gate-keeping. To stay competitive, reduce attrition, and attract talent, companies need to meet the changing nature of work, and that includes being able to onboard and train staff outside of a physical office, something LMSs are equipped to do.

corporate lms market

Investing in an LMS development is a profitable strategy if it’s implemented effectively. If you own or run a business, a learning management system can improve staff knowledge and performance, reduce attrition, boost brand credibility, and save a lot of money and time. The Harvard Business Review names dissatisfaction with staff development as one of the key reasons for high turnover rates. When replacing an employee costs an average of 20% of that employee's salary — that’s $15,000 for a staff member on a $75,000 salary — it’s far more efficient to invest in LMS development to grow employees’ professional skills and performance, and reduce attrition.

If you’re planning to build an LMS as a product to sell, it’s still a good idea, but it may require more effort and it will require in-depth study of the market. And, of course, you need to have a clear image of your customer. If you’re planning to develop an LMS for schools, be prepared for tough competition as you’ll compete with giants such as Google Classroom. Your product has to be unique, innovative, and efficient to be competitive. You’ll also have to follow government regulations for educational software, and be ready to jump through bureaucratic hoops to sell your LMS. On the plus side, you might be able to access public funding if your LMS idea brings real value to educational management.

The corporate LMS market seems to be easier in terms of both access and competition. That said,  note that you will have serious rivals including Adobe Systems, PowerSchool, IBM, and Blackboard. However, don't be discouraged. Be prepared and study the market for opportunities. For example, MarketsandMarkets research highlights how gamification in learning management platforms is a winning idea. 

Gamification enhances learning, making it easy, fun and engaging. Combine this with an innovative idea, robust business planning, and a clever full-featured final product and your LMS platform should be very competitive.

Example of gamification in LMS.

Example of gamification in LMS. Source: Lingo Deer

There is no universal LMS monetization model nor standard price ranges. The way you earn money depends on the product you sell and its target audience. Several widespread models for making money with LMSs include:

  • Paid subscriptions aka a licence model – In the chart below, you can see a summary of the most popular licence models.
License model
  • Cross-selling – You can offer other products and services, for example, in-person consultations, lectures, and advanced training. A good example would be a cuisine school pairing courses with physical products: kitchen utensils, books, and so on.
  • Sponsored or ad-supported monetization – Include relevant advertising on your platform.

For example,  Docebo, an LMS platform (web solution and Docebo Go.Learn app), uses both licence and cross-selling monetization models. Not only can companies buy subscription plans, but they can also order customised solutions for their unique needs.

lms market stats

Customised LMSs: Core Features

What features of an LMS should be included in an e-learning course development plan? There’s no universal answer to this question as every project is different. But to make your product competitive, you have to take into account a number of essential functionalities:

  • Course management – As any LMS' primary objective is to teach and train students and employees, this feature is essential. Course management feature enables the teacher/trainer to design courses and create content for students/employees.
  • Skill tracking – If we cannot measure learners' skills and training, how can we judge their performance? A tool to assess and manage skills acquired during training is a must-have. Also, this feature enables learners to study at their own pace and take the course at their convenience.
develop platform like duolingo

Source: Duolingo

  • Analytics – Teachers or trainers can view detailed analytical reports on a student or employee’s progress, their achievement reports, and overall statistics for a group or an individual.
build app like docebo

Source: Docebo

  • Communication – Since education requires collaboration, your LMS must facilitate this. Forum boards, instant messages, video one-on-one and group calls are some of the many options.
develop lms solution like 360learning

Source: 360Learning

  • Gamification – A modern LMS should include game activities. The use of games eases the learning process, aids knowledge retention, and makes your LMS more appealing.
  • Mobile support – Modern learning management systems should be accessible on devices across the spectrum as these platforms should provide students with LMS access throughout the day. Mobile LMS apps allow students to take courses whenever and wherever it is convenient.
  • Notifications – Add real-time updates and reminders about courses, lessons, or tests.
  • Strong security.LMS platforms or apps should have robust security features as they store learners’ personal data. It’s important to adhere to the national copyright and data privacy laws where you work or will sell your product. The amount of security you provide must meet the legal requirements at a minimum.

How to build a learning management system

Using the services of an experienced firm is the most efficient way to develop a learning management system. By hiring a development company, you can set up an LMS development team much faster and cheaper than by creating one in-house. A development company will work on your LMS immediately, saving you money on office rent, equipment (hardware, software), and so on.

A company that develops e-learning applications is also a better option than acquiring and licensing a preexisting LMS. Since it is a prepackaged software solution, the platform may not have all of the customisations you require, or integrate with every application you need. Furthermore, eLearning platform vendors make their money by selling the same product to numerous businesses, making it much harder to create an innovative product that’s competitive. Plus, eLearning vendors with large customer bases may provide poor customer service.

With an experienced development company, you get an LMS solution quickly and without the hassle. For example, if you hire MadAppGang, you just need to define your needs and set goals. Our team will help you with all the rest. Planning, defining key features of your LMS, determining a budget, and estimating the deadline will be carried out by project managers. Designers will create smart and appealing designs for your concept, and developers will bring your idea to life at the earliest date. The product will be thoroughly tested by QA engineers. As a result, you get a quick, secure, and user-friendly software solution that adds genuine value to your company.

If you're thinking of creating your own educational app, here are some suggestions in our article about planning, building, and selling EdTech products.

How much does it cost to develop an LMS?

LMS platform development prices vary. Normally, a minimum viable product (MVP) of a standard LMS costs $50.000 to $100.000. Although, costs vary dramatically as many factors impact the overall cost. First of all, the selection of a technology stack (Swift, Kotlin, Golang, ReactJS), as this influences budget, scalability, and development time. Second, the price strictly correlates with the number of chosen features and functionalities, number of users and courses, and delivery deadlines. 

If you plan to complement your LMS website with an LMS iOS app or LMS Android app, the project’s cost rises significantly, but your product will be more competitive and add greater value to your business. If you’re on a tight budget, a cross-platform LMS app can save you 10 to 30% compared to native app development. 

We recommend building a SaaS solution as it’s hosted in the cloud and confers benefits including automatic software updates, better security, and cost reductions. If you’re new to LMS development, contact our project managers to get help defining your needs, making realistic time estimates, and calculating an approximate cost for your solution.

The bottom line

Learning management systems will be increasingly prominent in the near future as they provide companies with a wealth of benefits. LMS can centralise your knowledge base, ensure compliance, reduce training costs, and allow you to educate staff remotely. Given repeated COVID-19 lockdowns and stay-at-home orders, the last point is especially pertinent. As such, there’s never been a better time to start building an LMS. 

It can be challenging to develop a learning management system, but with a custom solution, you can design a product that meets your company's needs. All you need is the right team of developers to help bring your idea to life. That's exactly what we do! Send us a description of your vision and we'll contact you to discuss the details.