How to Create a Learning Management System Tailored to Your Needs

May 26, 2023
16 min

Learning management systems (LMS) help businesses accelerate the onboarding process, improve the HR department’s performance, boost your EdTech business efficiency, train partners to sell and support products efficiently, etc.

But when it comes to choosing a ready-made e-learning platform, many entrepreneurs lack an understanding of specific features, customizations, and scalability that’d allow for further business growth.

Here comes the question of how to create a learning management system tailored to your specific needs and whether it’s worth investing in.

Our post will guide you through the step-by-step custom LMS development process, featuring:

  • Custom LMS vs boxed solutions: case-by-case comparison
  • 4 key types of LMS platforms
  • How to create a learning management system
  • Key factors that impact your LMS success.

Custom LMS vs Packaged Software: What’s Your Choice

A learning management system (LMS) is a platform designed to manage, track, document, report, and automate educational, training, and learning activities. Shortly, LMS software means you learn, train, or educate in a remote, automated, and time-efficient way.

E-learning platforms are becoming more popular among both vendors and students. The total number of active LMS users was over 74M in 2020 (, along with 800+ LMS software vendors (TalentedLearning).

The reason behind these striking numbers is that learning management systems offer a one-fits-all approach for both sides. Users get a seamless digital experience that helps accelerate their progress.

In turn, companies leverage the following benefits of using LMS in their organization:

  • reduce staff training costs
  • enhance and speed up the onboarding process
  • boost employee performance
  • increase the employee satisfaction rate (ESF) and higher retention
  • facilitate team internal collaboration
  • improve the learning and development (L&D) task performance.

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These benefits stimulate companies to use LMS software to improve business operations. The only question is: ‘should I buy ready-made software or build a custom LMS solution?’

Now let’s discuss each option in greater detail, reveal their pros and cons, and explore the core use cases when building or purchasing is best for your business.


Custom LMS

Tailor-made learning management systems mean you build a tech solution from scratch and tailor it to your specific demands and the organization structure. This approach mostly takes more time and initial funds to deploy but offers multiple benefits.



  • Higher initial investments, more savings later on

Building a custom LMS is a pricey initiative. You need to create your in-house team or outsource to a software development company. Both methods require 3-9 months and start from $25,000.

But these investments can pay you off in the future. Compared to custom LMS, ready-made solutions mean you pay monthly subscription fees and additional charges to increase the user limit, extend integrations, or increase allocated system memory.

This means your costs grow as your business scales, and the chances are high to overpay in the future.

What’s more, custom LMS development means you pay just for the features you need, not all the bells and whistles that are likely to end up as another shelfware. That’s crucial as users report using only 20% of ready-made functionality while 50% of features are rarely or never used. (Standish research)

According to the research, custom LMS solutions offer up to a 0.9-year payback period and 430% annual ROI.


  • No controllability burdens

Building a custom LMS is about controlling the entire development during the project and after the release. Tailor-made systems mean you’re a platform owner with no potential risks that you cannot impact.

For example, ready-made learning management systems may all of a sudden remove integrations, increase subscription fees, modify specific platform functionality, and more. The uncontrolled changes may influence your business operations right away. In contrast, custom LMS development eliminates such risks for your organization.

Also, you fully control the schedule of upgrades. This means if you require additional features as your business grows – you know what, when, and why you would add to the platform.


  • Flexibility scales as your business grows

Ready-made LMS vendors cover most small-to-midsize business needs, but what happens if you need more features and resources? Say, you need to increase the platform user limit or the allocated memory size, what should you do?

The thing is, flexibility and scalability issues do limit your real-time progress and bump you into 2 options – adapting your needs or changing the LMS vendor – either of which may negatively impact your business operations and lead to time- and cost-consuming changes.

That is why you might want to go for a custom LMS which, by definition, is about scaling. First off, you embed the required scalability while building a system. Second, you can upgrade the platform by adding more cloud servers for the memory size, enhance the performance to handle more users in real-time, etc.

Although ready-made LMS vendors offer most on-demand integrations, the chances are high to lack specific integrations your business currently needs. This means you should either contact the vendor and ask to add more integrations or start using additional third-party tools aside from the platform.

Building a custom learning management system allows you to forget about any integration-related burdens. Your in-house team or an outsourcing company will add as many integrations as it’s technically possible.

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  • No compliance and security gaps

Secure hosting, data encryption, and legal liability are the must-have features of a learning management system. Still, many generic-purpose LMS vendors have little to do with HIPAA compliance which leads to system-based data leaks and other security gaps.

Although people usually sign a Business Associates Agreement (BAA), it doesn’t prevent you from potential security and data traceability issues. Here comes a custom LMS system that allows you to comply with the required legal regulations and make your data way more leak-free.

That said, we recommend building a custom LMS when you want to:

  • Have tailor-made UX and UI experience
  • Utilize demand-oriented functionality (that most generic LMS systems lack)
  • Adhere to compliance requirements
  • Have leak-free data security and encryption
  • Invest in a cost-effective long-term strategy
  • Implement on-demand limit-free integrations
  • Fully control platform updates and upgrades.


Ready-Made LMS software

Out-of-the-box LMS systems are a decent choice for companies having limited resources and modest needs. Also, purpose-generic software enables your company to deploy it fast and start using the new system within days or weeks.


  • Faster implementation and deployment

Compared to custom solutions, most ready-made LMS vendors offer speedy implementation and deployment which normally takes no more than 10 days.


  • Lower short-term investments

An out-of-the-box LMS requires you to choose a subscription plan and pay one-time setup fees which include deploying and installing the system.

E-Learning Industry states the average fee for a cloud-based LMS is $4,000-$7,000 to start using the platform. This normally includes staff training, basic post-implementation support, and minimal customizations.


  • Easy-to-configure basic UI and design elements

Most LMS providers are flexible when it comes to customizing your platform’s design and user interface. Usually, you can modify the color scheme to fit your brand colors, change the order of screens and dashboards, slightly replace locations of features, etc.


So, boxed or ready-made LMS software is a great choice when you want to:

  • Deploy, train, and start using the platform fast
  • Save in the short-term perspective
  • Access basic functionality and integrations
  • Configure the user interface at the basic level.

4 Key Types of Learning Management Systems

Before choosing a custom LMS vs ready-made software, you should first know the key types of platforms you can utilize. Here are 4 common types of learning management systems.


Cloud-based Software-as-a-Service LMS

SaaS LMS systems are provider-hosted solutions that offer intuitive, web-based, plug-and-play platforms. The software is installed on the provider’s servers which means you just need to sign up, proceed with the payment, and you are all set to start using the LMS.

Mostly, SaaS LMS solutions offer a basic level of customizations and integrations. This makes cloud-based platforms a decent choice If you want to launch fast without extra modifications to your software.

The core drawback of cloud-based solutions is a non-unique user experience which may reduce the engagement of employees and knowledge retention.


On-Premises Installed LMS

In contrast to a provider-hosted approach, you can get more data control by hosting the LMS source code on your servers. This traditional approach includes high maintenance costs and on-premises accessibility only, which means you can access the platform using limited hardware resources.

So, installed LMS solutions are a great choice if you need high data security and control capabilities. However, the on-premises approach requires your in-house vs outsourcing maintenance, upgrades, etc.


Open-Source LMS

Open-source learning management systems are free-to-use solutions that require your development expertise to deploy, customize, update, and maintain. You can utilize open-source LMS software both on-premises and in the cloud, but either of the options requires technical intelligence.

The main concern is the content-centered limitations: you cannot modify or customize the system quickly without improving the source code yourself. So, open-source e-learning platforms are a great in-between option if you have technical expertise but want to avoid from-scratch development.

You can tailor the platform to your specific brand needs in terms of on-demand functionality, brand-fit UI/UX design, scalability, and others.


Custom LMS

Custom LMS development is about bringing your specific business needs and requirements into a single e-learning platform. This means you proceed with an in-house team or outsource software development to a vendor and deliver a one-fits-all LMS platform.

The core benefits are long-term perspective investments, full controllability, high scalability and flexibility on demand, unique UI/UX design, decent security, and compliance, etc.

The drawbacks include high short-term costs and extended development, testing, and deployment taking up to 3-6-months.

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How to Create a Learning Management System


1. Define Your Business Use Case

Once you decide to build a custom LMS, you should first define your business use case. It’s about ‘why’ you’re going to build a platform and what needs you want to address.

There are several common use cases:

  • Enhance employee onboarding and continual learning
  • Improve your EdTech business efficiency
  • Train partners to improve product sales and support operations
  • Guide customers through product manuals to make the most of your products.


Next, identify the key objectives of your business use case. They may be decreasing training costs, reducing the onboarding time and resource allocation, improving the decision-making process of your employees, skyrocketing staff performance in sales, support, or customer service, measuring learning impact, etc.

All this data is crucial as you need to visualize the platform’s target audience, its primary and secondary needs, your objectives, and build platform architecture with needed features and UI/UX design around them.


2. Scope a User-Business Balanced Feature Set

Once you’re all set with the business use cases, you should plan the best package of features your platform needs. They need to meet your business objectives while addressing the learning goals of employees.

Here are the most common functionalities for your custom LMS.


1. Course Builder

Course builder is the cornerstone of your custom LMS system. It includes a set of skeleton features designed to create, manage, and track courses, learning modules, lessons, exercises, assessments, etc.

This functionality will help you build both a one-week onboarding program for trainees and a 3-month learning module for sales representatives to increase their performance.


2. Content Management

Content management is the next must-have feature of your LMS, regardless of the business use case you have. It’s about making the system editable, manageable, easy-to-track and measure for admins and authors.

First, content management should allow uploading multiple types of files like presentations (PPT), ready-made courses (SCORM), video tutorials (AVI, MP4), Flash clips (SWF), audio recordings (WAV, MP3), and different material (PDF, DOC, XLS).

Second, this functionality should include an easy-to-use and smart built-in editor. It will help course authors create visually appealing and informative long-read content with quotes, videos, illustrations, interactions, and quizzes.

Third, content management should enable admins to build custom learning track structures, freeform assignments, course progress bars, lesson status updates, progress notifications, etc.


3. User permissions and management

It’s vital to create a system duplicate of your organization structure with equal departments, teams, roles, and responsibility groups. Building a custom LMS enables you to set up multiple permissions and administrator levels.

Creating an organizational structure inside your LMS helps you assign, track, and manage training. For instance, you can smoothly assign a new course or module to a specific product team or even the entire department.

The functionality should include user invitation (to onboard quickly and easily), profile management, roles, permissions (to extend or limit specific platform rights), and account statuses (active/inactive).


4. Training management

The learning management module helps streamline the training experience for both admins and employees. Course authors can easily assign users or groups to specific courses and learning tracks, use handy filters to sort users by teams, jobs, location criteria, or even set up custom filters.

Employees, in turn, get a fully automated pipeline and an interactive dashboard with their assigned courses, training progress, completed assessments, etc.

Automatic assignments are among the core must-have features for your training management module. For instance, you can create a group ‘Newbies’ and set up an automatic rule which assigns all new members to a specific onboarding course.

Also, you can build a smart events calendar. It helps create, manage, and track all training activities in a single tab. Admins can schedule web conferences, workshops, sync-ups, live training, and other events through a calendar view, and assign users or groups.

Employees, in turn, can get customized reminders about the upcoming meetings and receive notifications on schedule changes.


5. LMS reporting functionality

Reporting is a must-have LMS feature to track the efficiency of content materials per each course, users’ performance and progress scale, etc. You can even implement detailed user reports to track results, answer breakdown, average assessment score, attempt details, and more.

You can build insightful dashboards and charts that visualize raw numbers by a specific user, groups, teams, or even courses.

Also, you can implement an email notification pipeline with custom scenarios. For example, admins can stay up to date by getting email notifications each time employees complete assigned materials or pass exams.


6. Multi-Tenant Learning Portals

Learning portals are subfolders of your main LMS portal and help your business scale smoothly by creating different learning portals for multiple separate teams and departments.

For example, your initial marketing team that consists of a CMO and content writers scales up to 20 professionals. They may include research, on-page, and off-page SEO specialists, content writers, PPC professionals, and others. With multi-tenant learning portals, you can create on-demand sub-level portals to deliver content courses tailored to the demands of each audience.

On-scale training content management is a time- and cost-saving initiative for your custom LMS solution. Everything you need is to duplicate subportals and content courses, adapting them to the information specific for each department or team.


7. Single Sign-On (SSO) Logjn

Before building the platform, you should consider the number of users and their credentials in the system. Reminding tons of passwords is often a decent challenge when it comes to using dozens of services and tools around the web.

You can reduce the IT department workloads and streamline the LMS adoption among users by implementing a Single Sign-On (SSO) login feature. It’s a single authentication service that collects all credentials of users and automatically signs them in upon request.

Single Sign-On (SSO) login benefits your LMS in two ways.

First, it reduces the IT department overload as technical specialists no longer need to handle password resets for multiple applications.

Second, it improves your custom LMS IT environment security as users get verified access to multiple systems using a single set of credentials.


3. Decide on the Development Approach

Now that you have a set of must-have features, it’s time to define the development approach: in-house vs outsourcing. We’ve published a detailed data-driven step-by-step comparison guide on what’s the best choice for your use case.

Now let’s go through the key takeaways comparing in-house development and outsourcing.


In-house LMS development

It’s a great choice if you already have high-skilled technical resources that can handle most project activities. They will include architecture design, front-end, and back-end development, UI/UX design, thorough QA and testing, deployment, and post-implementation support teams.

You may not have a decent technical team, but you do partner with an experienced CTO with a background in the same domain (ideally). That may work great for your project as this professional would mostly know what, why, how, and when it should be delivered. The core benefit of having a tech-savvy partner is that they clearly know how to transform high-level business objectives into a structured project development pipeline.

CTOs usually set up result-oriented recruiting, onboarding, and project progress tracking systems that can help you build your in-house resources from scratch.

Ultimately, in-house development is a time-consuming approach compared to outsourcing software development as you may spend weeks or even months just to recruit, onboard, and train required tech resources.

So, we recommend building your own learning management system with an in-house team when you:

  • Have an experienced CTO onboard
  • Have no time and budget constraints
  • Want to gain excellent control over the project
  • Want to build a solid in-house technical expertise for side projects
  • Set up the smoothest and barrier-free communication internally.


Outsourcing LMS development

As a counterpart to the in-house development approach, outsourcing is a great choice for reducing the time-to-market period, optimizing costs, avoiding hiring talents, and focusing on other project activities.

There are three possible outsourcing models:

  • An augmented team
  • An on-demand team
  • A project-based team.

Augmented resources or staff augmentation is about extending your in-house team with external resources to close the technical gaps. This model means you engage with external talents on the same level you do internally. Outsourced professionals can become a part of your team to extend its expertise, focus on a specific LMS product functionality, or just accelerate the timeline.

The on-demand engagement model means you outsource a specific product functionality block to an external provider. This helps you keep your in-house team focused on the core LMS project activities and avoid time-disrupting initiatives. This approach requires fewer engagement efforts from your side compared to staff augmentation, which helps you stay focused on the main project-related task.

A project-based team is a classic outsourcing approach which means you fully delegate the project development activities to external tech talents. You can choose how close you want to cooperate with the project team (if offered by a vendor). Mostly, a project-based model is a perfect option in case you have no technical expertise and resources and want to launch your LMS as soon as possible.

So, we recommend outsourcing LMS development when you:

  • Want to complete a one-time LMS project
  • Want to build additional functionality modules while keeping your in-house team focused
  • Need to launch the system as fast as possible
  • Have no technical expertise in specific LMS development to proceed further
  • Want to lessen the burdens of recruiting, onboarding, and training talents.


4. Get Your Custom LMS Live, Validate, and Improve

Once you’ve built a custom LMS and closed all project-related technical issues, it’s time to release. Whether it’s an MVP-based version or a full-featured product, first validate the feedback. Ask your departments and teams to test the platform and validate its features.

Next, ask your employees to collect any bugs, comments, and suggestions in a format of Google Spreadsheets or others. This would become data-driven feedback you should validate, prioritize, and convert into tasks for your technical teams.

Another important post-implementation activity is to conduct LMS onboarding sessions to train and assess your employees. All departments should know the platform from A to Z or there will be limited outcomes for your business. You can ask IT professionals to conduct tech-savvy sessions and a product owner to perform a one-fits-all general meeting on using the custom LMS.

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2 Key Factors that Impact Your LMS Success

Now that you know the full custom LMS development pipeline, let’s outline the core factors that impact its final success.


Business Use Case Oriented Approach

As discussed above, your learning management system will bring the expected results only if aligned properly with your specific use case. Whether you want to deliver an LMS to boost employee onboarding and continual learning, improve your EdTech business efficiency, or train partners to improve the product sales and support operations, your platform should be objective-oriented.

This includes an on-demand feature set, audience-focused user experience, high platform scalability, and other nuances you should consider. There is no need to build a custom LMS if you just need to get basic functionality boxed software vendors provide.


User-Business Balanced Features

As a part of the previous factor, LMS features are the core experience your employees will interact with. This makes defining, validating, building, and testing features a must-have activity. The reason is that delivering useless features will take your budget but not provide users with a solid value. And vice versa, failure to implement an on-demand feature like notifications or training management will minimize your LMS performance.

So, carefully analyze your business objectives and align them with the current and potential needs of your staff to build a user-business balanced feature set that works best.

Why Ascendix as Your Custom LMS Development Company

Ascendix Tech has passed a long 10-year way of custom software development and outsourcing to 7 different locations. This bilateral experience allowed us to offer a client-vendor balanced expertise tailored to your business needs and our resource availability.

In terms of custom LMS development, we’ve helped multiple companies build, enhance, and optimize new and existing platforms. For example, we assisted the client in cutting down LMS infrastructure costs by 40 times resulting in a 256% ROI boost.

First, the client contacted us to help enhance its security model and reduce infrastructure costs. Once we’ve conducted a project discovery phase, we have prepared a list of technical issues and technology solutions that included:

  • Security Model Upgrade & Implementation
  • AWS Infrastructure Re-Deployment & Redesign
  • Single Sign-On (SSO) Implementation
  • Real-time Monitoring System Setup.


So, we introduced multitenancy to reduce the deployment cycle per organization, used AWS Lambdas to optimize the existing infrastructure, implemented an auto-scaling system that tracks and validates incoming traffic, and brought automated deployment.

These technology solutions helped the company get a 256% ROI boost and achieve 40x-time infrastructure cost savings.

Keep reading the full case study on how we reduced infrastructure costs for the client to know the nuances of technical implementation, challenges, and results.

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Wrapping Up

Custom LMS development is a beneficial yet challenging initiative for your business. We hope our guide on how to build a learning management system in 4 steps will help you create a robust LMS and not spend a fortune. The core factors to succeed are defining the right business use case and implementing the user-business balanced feature set.

If you’re looking for an LMS development company to outsource full-featured or specific functionality development, Ascendix Tech is here to help. Just drop us a line, and we’ll send an estimate.


How do I make my own LMS?

First, you need to define your specific LMS business use case (trainee onboarding, improving edtech business efficiency, partner training, etc). Second, prepare a user-business balanced set of features that should include a course builder, training and content management, notifications, etc. Third, build your in-house team or outsource to a development vendor

How much does it cost to make an LMS?

Building an LMS with basic functionality will cost $15,000-20,000 and take approximately 3 months while developing a full-featured case-specific LMS can cost $40,000-70,000 and take 6-9 months.


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