Choosing an LMS is a challenging task. Whether you’re picking your first LMS or looking to upgrade to one with more functionalities, there are many factors to consider. That’s why we’ve written this comprehensive guide on LMS selection. By following this guide, you should be able to make the right choice, avoiding the common pitfalls.
What is an LMS?
A learning management system or LMS is a platform on which online course material, assessment, logic and various other elements of modern learning are hosted. Some are for employee training & onboarding, while others are geared towards commercial use to sell online courses, such as Masterclasses.
Different types of LMS use cases include:
There are also customer onboarding, school and university LMSs.
The importance of selecting the right learning technology
You may ask, what’s at stake here? What if I go with a solution and realise it’s not right? The impact and extent of the pain would correlate with your goals and current circumstances. For B2C academies or B2B training providers with hundreds of active users looking to change their LMS, getting it wrong could mean a delay in onboarding new learners, pausing marketing, and quite possibly losing existing clients/learners.
A situation whereby not changing would be less damaging!
What factors must be considered when choosing an LMS?
Every successful LMS project starts with a clear understanding of the business, goals and needs of all stakeholders. That’s why we recommend following a logical and step-by-step process that can help you arrive at your best option.
We have broken down the selection process into the following seven steps:
- Defining your requirements
- Determine Your Budget
- Consider scalability and future user growth potential
- Choosing from different types of LMSs
- Integrations and APIs
- Review vendors’ pricing model
- Request demos or attend discovery sessions
1-Define your LMS requirements.
How do you select an LMS? Well, the first step is to determine your requirements. Finding answers to the below questions will help define your base requirements. Identifying the features that are most important for your organisation and evaluating them against the available LMS platforms is key. As we’ll explain below, the use case for your LMS will have a great impact on your options. Therefore we’ll cover this under each use case section later on in this guide.
- What is the aim of your LMS?
- Are you looking to focus on employee training or selling courses?
- Do you want a tool that will help foster collaboration across departments or enhance sales performance?
- How long are you planning on using this particular software solution? What business phase are you at?
- Will it be an MVP (minimum viable product), or have you already validated your idea and are looking to scale?
It’s important to understand how the software will be used by those who operate or access it so that they can get the most out of their investment.
Creating a list of must-have LMS features and nice-to-have ones could help focus your attention and guide you throughout the process. Must-Have features should meet all of your organisation’s specific requirements if you’re looking at off-the-shelf options. No matter how impressive an LMS looks at first glance, it may not be a good fit if it cannot meet these core requirements. For instance, if it is missing essential components for your business, such as seat management or Single Sign-on (SSO).
2-Determine Your Budget
Once you have a good understanding of what your needs are, it’s time to determine how much money you should spend on your LMS. Remember investing too little too late could have a far-reaching impact, so don’t fall into the short-termism trap, where decision-makers try to save now at the expense of issues in the future.
How much does an LMS cost?
Depending on the approach you choose, SaaS or custom, open source or proprietary, it can cost anywhere from £50 per month to hundreds of thousands of pounds. You should define your budget based on the stage of your venture and on your company’s revenue and potential return on investment (LMS ROI).
If you’re at the idea validation stage, you don’t necessarily need to invest in a custom solution right off the bat so a simple SaaS LMS might do the job of helping you test the market and find your product-market fit.
Suppose your idea is validated, and you are generating stable income and want to level up your game and develop features that will bring additional revenue. Here is the issue, every business is unique and organisations often need features tailored to their business needs. However, this is not possible with off-the-shelf SaaS solutions. In that case, it’s time to think about investing in a custom LMS. Open-source software will cost you less. If you are anticipating dozens of thousands of students over the next couple of years, you might need to switch to a proprietary system.
3-Consider scalability and future user growth potential
LMS scalability needs of organisations are diverse and vary depending on their size, current stage, user count and the volume of content they want to manage. A small firm with less than 1000 learners may not need to invest heavily in some features compared to a large business that gets thousands of new users every month. However, in both of those cases, having a versatile LMS that permits the necessary adaptations to future-proof the platform is unquestionably a crucial factor to take into account.
it’s important that your LMS supports flexible scaling features that are designed with the exact need of your business in mind. Features such as SSO, custom reporting, bespoke gamification and advanced analytic dashboards could give your eLearning business a competitive advantage and enable you to avoid using the price to attract customers.
Review Plume’s LMS & eLearning analytics services.
Some SaaS & off-the-shelf products may have some of the above-mentioned features. However, you’ll likely have difficulty finding an off-the-shelf LMS that ticks all your boxes.
4-Choosing from different types of LMSs
When selecting an LMS, you could choose either a SaaS solution (off the shelf), Open Source (OpenEdx, LearnDash,..), or a fully customised solution. Each has its own advantages and disadvantages, and we’ll now go into these.
Custom solutions are perfect for those with sustainable revenue or a solid business plan that anticipate a significant ROI. In those cases, scalability and customisation are critical to making your business model work. You can be confident that proprietary software is your right choice.
A SaaS LMS is the most popular option because it’s easy to implement and maintain. You pay monthly fees based on the number of (internal or external) users. The vendor often handles updates and maintenance for you. With this type of solution, there are limitations on what customisations or future modifications are possible. These are limited by use cases built into the platform. If your platform doesn’t offer an SSO (Single Sign-On), there isn’t anything you can do to remedy that. By the way, the SSO process could improve your conversion rate due to frictionless signup.
SaaS LMS benefits and limitations
A SaaS LMS is a great option for those either looking to monetise their course for the first time, for those needing to test their business idea to see if it is worth more investment, or simply for those who are just starting out and looking for something basic.
There are definitely many benefits of a SaaS LMS if that is the best option for you at the stage you’re at. One major draw is that usually, SaaS solutions will offer a customisable storefront for your courses that allows you to add different content blocks, telling visitors about your business and highlighting your products. A SaaS solution will also allow you to add a variety of file formats, such as PDFs, images, audio files, and videos. However, you might be restricted when using some of these. On Teachable, for example, the maximum file size you can upload is 2GB.
Other common issues with the SaaS model are:
- Inconsistency between your marketing and LMS website
- Trouble signing up without the SSO
- Limited automation and integration options
Therefore you either have to make do with existing features or use dodgy workarounds that won’t fully meet your needs.
Note that many SaaS companies will release your payments on a daily, weekly or monthly basis, while with your own custom-built LMS, you receive payments instantly.
Open Source LMS
Open-source solutions are free to download and install on your own servers. However, they require technical expertise in order to configure them perfectly. Maintaining them in the long term could become expensive due to their more complex nature. There are many different types of open-source platforms available today, so choosing one can be a little overwhelming. Keep in mind that no matter which open-source solution you choose, it will require extensive customisation before being able to meet your needs.
Moving from SaaS to Open source is like moving from a WIX site to a WordPress system. You’ll have a lot more options and room for improvement. An open-source solution could be modified by either existing plugins on the market or through custom development. The existing plugin approach is often cheaper but could bloat your system quickly, and its effectiveness and maintenance are sometimes questionable. For example, here at Plume, we offer a custom-made LMS reporting solution for LearnDash; while there are a few plugins that offer some data visualisation, they either don’t go far enough in data tracking or break under the weight of high user counts.
Open-Source Development options
You could also go down the route of hiring LearnDash developers (usually in the form of freelancers). While this approach costs less than specialised LMS agencies, you’ll have to assume product design and development cycle management. The danger is after all your time and investment you may end up with a system that isn’t good enough. Not to mention that the maintenance of a system is often more important than developing it. Working with individuals, especially freelancers, could risk leaving you vulnerable to issues affecting your LMS, which in turn may increase customer dissatisfaction and, with it, higher refund requests.
Custom LMS is where the true magic happens. This is where your vision is turned into reality with zero compromises. You could have any features, any integrations and (if you work with us) no per-user fees! Yes, it does cost more than open source. However, you have a stronger foundation from the get-go. Listen to Kaine (our Director) talking about Custom LMS and its benefits.
A custom LMS could be either based on open-source technologies or built from the ground up using Node.js. Open-source LMSs can be boosted with bespoke modifications to customise the system.
Custom-developed plugins and templates could reduce the load on your open-source solution. Thus allowing scaling and improving your ROI. Furthermore, Node.Js and similar solutions could be a great route for businesses with more than 50K users.
Benefits of a custom solution
Going down the custom LMS route does depend largely on your budget, goals, the stage of your product life cycle, your end users and your investment horizon. A custom solution, whether achieved through LearnDash or a from-scratch learning product, could set the right foundations for your business. It means your end product does take into consideration the needs of all stakeholders, their technical knowledge, requirements for time-saving automation, custom reporting requirements, existing business tech stack and finally, user-led features to provide you with a competitive edge.
By choosing to build a custom platform, your business has room to grow. You may come up with an idea for a new webinar or a new learning path for your users. With a custom learning platform, you can design and build it from scratch, and everything you create will be housed under one roof.
Custom LMS features
Custom LMS comes with unlimited everything: users, sales, content (such as quizzes), course completion certificates, downloadable material, communities, forums, discussions; you name it. Since we are in control of the server space, we can decrease or increase resources as needed.
With a custom LMS, you can design a website for your business with unlimited pages and any type of simple or complicated features. You will also have access to the admin panel of your site to be able to edit and add content as and when required.
5-Integrations and APIs
In addition to integrations, it’s important to evaluate how much flexibility you get with your LMS. Do you have the option of using an API? Can you use other third-party tools to integrate functionalities into your platforms? Your business uses a host of technologies to operate, from project management software to accounting and finance. These systems need to work and communicate with one another to ensure your growth doesn’t cause disruption in other business areas.
That’s why we recommend looking for an LMS that has easy-to-use APIs (with extensive documentation if you’re going for SaaS) or offers the development of such APIs with no limitations.
6-Review vendors’ pricing model
SaaS LMS pricing
Most SaaS solutions charge anything from £40 / Month (sometimes even a free account) all the way to £2-£3K. Similar to how most CRMs charge per contact, SaaS pricing is often interlinked with user counts. It means the more you grow, the higher you’d have to pay per month. The issue with per user model is that you’re often at the mercy of a large enterprise that decides who gets what features. If there is an outage, downtime or any other customer spooking issues, your options are limited to live chat or waiting on the line to speak to someone. Those aren’t the type of tasks you’d want to have when trying to run an eLearning business.
Some eLearning companies sell courses worth thousands of pounds, and a SaaS solution might work very well for them if they don’t need any feature customisations. For example, the price of the course is £2500, and they are teaching it to 20 students. However, if your business model is tied to the number of students, for example, you are selling courses under £100, and you are charged on a per-user basis – SaaS might turn out quite costly for you in the long term. It could be a good interim solution if you are at the idea validation stage, however.
You can think about it as renting a house; with SaaS, you pay monthly rent, and with a custom-built platform – you own the house and invest in improving it.
LearnDash, one of the frequently used open-source LMS, has a cost of $199/year for one site. Apart from that, take into account any paid plugins you may wish to purchase to improve your system. You also would need to consider development costs. If you have an internal team that has experience with developing LearnDash, the cost will be absorbed in your overheads. If your in-house team doesn’t have much experience, it’s best to hire LearnDash freelancers or agencies to develop your LMS. They can cost anywhere from £80 to £300/hour, depending on their location and level of experience. You also need to consider your hosting options. Simple hosting options used for WordPress sites may not be the best way forward and can reduce your system’s responsiveness.
Bespoke LMS pricing model
You’d often be charged an upfront development fee which could range from £20K to £200K, depending on your requirements. You could use companies like Plume to custom develop your LearnDash (costs around £20K-£50K), or use proprietary technologies (£50K-£200K). There are also support and maintenance costs which will be in the form of monthly retainers. This could range anywhere from £500 – £2000/month.
7-Request demos or attend discovery sessions
Demos are great for getting a feel of the platform. However, they are delivered in a time-constrained manner, and as such, you don’t have enough time to evaluate the full potential or weaknesses of such systems. Demos are often delivered by sales reps as opposed to eLearning experts. Therefore there is a limit to their knowledge and how much they may be able to help you to decide whether their system is the right one for you.
Scoping out your LMS requirements can be a daunting task. There are many pitfalls and points that we may not be able to cover here in this guide. However, if you’re looking for something more comprehensive, then you could request a discovery workshop. This consists of:
- A series of stakeholder discussions
- Scoping workshops
- A product roadmap and the provision of investment options
A discovery workshop will lay the foundation for the successful development of your learning product.
Take a look at our LMS audit services.
Free trials are another route that works well if you’re just starting. Moving thousands of users to a different platform for just a month is hardly a smart move and is not a valid option for many.
Selecting the right LMS is a critical decision and can have a major impact on your business. The wrong choice can cost you money and resources, while the right one will save time and deliver results. We hope we’ve helped you understand the process of choosing an LMS better so that you can make an informed decision.
If you’d like to have an informal chat about your requirements, book a good fit call with us here
How to choose the best LMS
Define your LMS requirements
The first step in choosing the best LMS is to determine your requirements by answering the questions mentioned in this blog.
Determine Your Budget
The budget alone will eliminate some of the options as they might be outside your planned budget. We recommend keeping an open mind and looking at it as a long-term investment.
Consider scalability and future user growth potential
Changing an LMS is a time and money-intensive task. Therefore, make sure you consider not just current needs but also future possibilities as well.
Choosing from different types of LMSs
There are many kinds of LMSs out there. From Open-Source to SaaS and bespoke solutions. Each has its own benefits and drawbacks.
Integrations and APIs
APIs provide the flexibility needed to connect your tech stack with your LMS.
Review vendors’ pricing model
From the per-user model to one-off payments, different LMS vendors offer various pricing models. Keep in mind the growing needs.
Request demos or attend discovery sessions
Demos are a great way to get a feel for the learning platform. However, discovery sessions are more common with bespoke solutions.