Homegrown Vs. Off-the-Shelf LMS: What Are the Pros and Cons?

By eLearning Inside
September 24, 2019

A learning management system (LMS) is designed to ease administrative responsibilities, analysis, data collection, reports, and education delivery. Before you can choose the best eLearning model for your company, you need to do your homework first. If you’re trying to decide whether your organization should order the building of a new LMS or buy a customizable solution, this article prepared by eLearning development company Belitsoft is for you.

For a start, let’s take a look at the categorizations of LMS based on implementation.

LMS by Implementation Method

Homegrown LMS

A lot of big IT businesses have moved ahead and created their own homegrown LMS.

Building an LMS from scratch is better when none of the existing systems provide the specific features your business needs. This is not a preferred choice for any organizations, but for particular use cases Google, Facebook, and Amazon have developed their own custom LMS.

The eLearning industry is constantly evolving. It takes a visionary view and a blueprint to invest in the creation of your own LMS platform. It should be a key task for your company. If you are mainly an educational or learning company, this can be meaningful because your IP in the LMS is essential for your value and is central to your organization.

An IT staff should be well-trained in the company developing LMS. They will carry on customizing and maintaining the LMS after implementation.

Open-Source LMS

Moodle and Canvas are well known open source LMS. They are a generally favored choice in operating the eLearning projects run by professionals, coaching businesses, and educational institutions. While some enterprises are also looking at open source alternatives for their training requirements, particularly for unique use cases, many big corporations are rejecting open source technology.

You may have to count on a software company’s expertise in such development, unless your IT team can build an open source LMS itself.

After you choose what implementation method is for you, another question follows: “How are you going to deploy it?”

LMS by Deployment Method

Cloud-Based LMS

A fully operational LMS is placed in the cloud hosting vendor’s data center. It is simple and quick to set up and less expensive to implement. Course materials, backup documents, accounts, and user data are stored on secure servers. Suppliers settle most technical problems like preventing corruption of information. In the cloud, LMS suppliers update the system to the latest version with no extra costs.

These solutions are appropriate both for SMEs and big businesses, but it‘s resource-strapped companies that will profit the most from this method.

On-premises LMS

These LMS are stored in the organization’s servers. However, for the smooth operation of the system, the hosting itself requires the buyer to allocate resources. The demand for a trained IT team within the company grows as various problems can appear in the organization’s system.

Some enterprises also wouldn’t want user information and other data stored someplace in a cloud. On-premises deployment is the only solution for companies with sophisticated training needs that require a significantly adjusted LMS.

Updates and servicing are more difficult with this method and can present a serious barrier when you need the latest release of the system.

Vendor-Owned LMS

In this case, the IP is owned by the LMS supplier. To access the software, you either license the LMS or purchase a subscription service. You may be tied by an annual or a monthly contract. If it’s a month-by-month subscription, then you can exit by simply switching the account off.

Most larger LMS will involve a long-term agreement because the attempt to set up the system, move information, and prepare administrators to use it will require a certain commitment.

What Are The Costs?

Whether you want to build an LMS from scratch or use a ready-made product, the price will vary.

Building a sophisticated LMS could take 400-500 hours to develop a prototype that contains hours of business analysis, information architecture, layout, functionality designing, and testing. For such work, local U.S. developers charge between $80 and $300 per hour.

Alternatively, you can use an existing LMS and customize this system according to the needs of your company. It can be located in the cloud so you will pay for a perpetual or periodic license. 

In the case of the ready-made system, you may also find that you require extra software to achieve full functionality. This will expand the overall costs. In addition, you will have to pay installation fees and you may encounter some configuration restrictions for customization.

It is often better to build your own LMS because, in the long run, you may face significant expenses. The initial cost of a SaaS solution is much lower, but the values increase due to amplifying commissions and monthly support costs.

There are a number of ways you can do it. You can either create it within your own corporation (in-house) or employ an outsourcing organization. Let’s look at what’s distinctive about these two methods.

In-house vs. Outsourcing Development

In-house Outsourcing
High initial costs of assembling a professional team and LMS building, in addition to rental costs and tax fees. Outsourcing to a reliable professional team saves money. Also, you don’t need to hire and train your own development team.
It provides more dynamic management and team-building possibilities for your administrators. There is no need to waste a lot of time on management and team-building with an outsourced team of experts.
Since all information remains within the organization, in-house development reduces the risk of privacy breaches. You must ensure that the outsourcing organization you are working with is secure enough in terms of data protection.
New trends can be hard to follow with the expansion of LMS technologies, and in-house practices can become ineffective over time. Improved outsourcing team’s organizational efficiency increases company profits, save time and helps achieve results rapidly.


The main thing in choosing the most suitable LMS for your organization is not to make rash decisions. Don’t just go with the cheapest, the most flashy system, or with the most persistent LMS vendor.

Gather all your requirements mindfully. Use the information from this article about which LMS implementation models out there. Do your due diligence to select the one that’s right for you.

Featured Image: Shahadat Shemul, Unsplash.