LMS: Build Vs Buy - A Decision Paradigm

Many times I come across this typical dilemma my clients face and deliberate upon - should they try to custom build an LMS or buy an off-the-shelf LMS and customize it?

In my experience, I have seen two distinct beliefs that drive clients’ decision making process with respect to the "build v/s buy" decision. At one end is a belief that they can develop (or get developed) everything needed and that no off-the-shelf solution will fit their needs easily. The other side of the coin is the belief that an off-the-shelf package will be more cost-effective and will be able to fit one's needs. Unfortunately, both paths frequently may lead to disappointments if not carefully and thoroughly evaluated. Below are a few points which need to be considered while evaluating the “build v/s buy” decision.

‍Does off-the-shelf LMS match your business requirements? How much?

It is important to understand how close the match is between what the business requires and what an off-the-shelf LMS provides. The traditional rule of thumb is that off-the-shelf LMS must meet a minimum of 80% of the required functionality and almost all of the required ‘critical’ functionality. For ease of comparison and evaluation Requirements must be broken down into a list of  features and functions and given a weightage as per their criticality.  It is utmost important that an off-the-shelf LMS provides a great flexibility in adopting your business requirements with very minimum customization efforts.

‍Evaluate cost of customizing off-the-shelf LMS v/s Custom Development the LMS

If the off-the-shelf LMS matches at least 80% to 85% of your business requirements, then it becomes very vital to evaluate how much will it cost to build rest of the custom requirements?  Also if you decide to custom-build the LMS how much will that cost? While doing this evaluation it is important to consider the functional expertise required for designing and developing the LMS and the cost associated with the same along with the development and project management cost. While developing the LMS from scratch, internal development capabilities could become the bottleneck in delivery of the project and may result in shooting up the total cost of development. Whereas in off-the-shelf LMS the expertise comes with the vendor itself.

‍Time to Market

‍An off-the-shelf LMS does offer greater predictability with respect to the overall implementation time. If time to market is the critical factor in your LMS implementation then it is always advisable to evaluate an off-the-shelf LMS instead of building it. With this you can focus on the core activity of Learning and development without worrying too much about the technicalities of the application. Off-the-shelf LMS offers greater predictability to plan the roll out.

‍Total Cost of Ownership (TCO)

‍Many a times the decision of custom building a LMS in-house may lead to a very high Total Cost of Ownership (TCO) as development, project management and support activities requires a dedicated workforce. Whereas with off-the-shelf LMS, you can bring the Total Cost of Ownership down to a much greater extent as most of the modules are readily available. On the top of it, if it is a hosted solution then the cost of buying the infrastructure (hardware/software) is also eliminated. The support is also managed by the vendor at a reasonable cost.

Risk & Mitigation

‍All projects involve risk, some less and some more. Each of the “acceptable” alternatives should be the object of a detailed risk and mitigation review. You may discover, for example, that the implementation of off-the-shelf LMS can be broken into smaller phases that will both reduce the risk of a big bang implementation, and give the organization time to adapt to the new, more efficient business processes.Eventually, it's an organization’s decision to choose one of these options but the above mentioned points can help prepare a clear evaluation sheet to make a more objective decision.

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