LMS for Small Companies: Types, Benefits, Cost

Updated on Dec 18th, 2023


Digitization has taken over every industry, and the learning sector is no exception. The demand for e-Learning software development has increased exponentially to 400%, and the growth of pandemics further elevated this figure. It is evident that companies, irrespective of their size and niche, are investing in custom LMS development for their employees’ virtual and remote training. Moreover, the perks of managing everything from a centralized system are also accelerating the growth of the LMS software development market.   

But what is an LMS, and how can you develop one for your company? Let’s uncover answers to all such questions in today’s blog.  

What is a Learning Management System (LMS)?  

LMS or learning management system is a robust digital solution that focuses on streamlining the training aspects of any organization using digital tools. A custom LMS solution uses various technologies and tools, including chatbots, AI solutions, and document management tools, to promote a remote teaching experience.   

With custom LMS software, you can easily manage the data of all your trainees, along with their progress reports, curriculum, grades, tests, practice sessions, and more. You can create new lessons, assess your trainees’ performances, offer them grades, and even allocate their assignments using the same system.  

Due to such amazing benefits, the concept of custom LMS development attained new heights in the eLearning software development market. Furthermore, the global pandemic also facilitates the growth of LMS software development for all education organizations, enterprises, and even startups.   

What are the Various Types of Learning Management Systems?  

In today’s digital era, we have countless options for a certain thing, and LMS is no exception. Various learning management systems suitable for small companies satisfy the needs of different niches and industries through their unique concepts. To name a few, we have:  

Web-based LMS  

As the name suggests, a web-based LMS works seamlessly over any browser and offers a unique experience to users worldwide. You only require an active internet connection and a laptop, palmtop, or computer to access this kind of LMS. It is also known as SaaS-based LMS.  

Open-source LMS  

Open-source LMS is the kind of LMS where the code is available for the users to customize per their requirements. That means you can customize the features or interface of the learning management system according to your needs with an open-source LMS.   

Closed-source LMS  

That one is actually the reverse of an open-source LMS. Meaning the source code is not available to the general public, so no customizations can be made by the user. However, you can purchase the license of such an LMS to later any functionalities.   

Installed or Locally-hosted LMS

 A locally-hosted LMS, as the name implies, is hosted on your local server. All the data remains safe at your access, and you can make any changes to the solution per your needs.   

LMS with Content Authoring Tools  

Many learning management systems for small companies come with content authoring tools. These types of LMS allow you to create your own digital learning courses and tests without any technical experience. You can use the pre-built tools to do all that without any issues.  

AI-Based LMS 

Artificial intelligence-based LMS focuses on automating repetitive tasks and improving the efficiency of the system. The system is equipped to take AI in eLearning to the next level.  

Mobile LMS  

The world has gone digital, and mobile apps are the business sector’s future. Hence, today, you can readily see many mobile LMS that are used for better management and higher user experience.   

Custom LMS Software  

Lastly, we have a very popular type of LMS, which is custom LMS. in this type, you can easily specify your requirements and ideas, and the eLearning solutions are built according to those ideas. A custom LMS is the most popular type, based on your specific business requirements and delivering exceptional results with fewer complexities. You can hire software developers to create your custom LMS software.   

Benefits of LMS Software Development 

Progress Tracking 

Trainees and employers can track progress at any given point when using an LMS. The system creates logs for every trainee and the courses and learning they have accomplished. The entire data can be accessed and the training program modified based on it.  

Better Assessments 

For companies hiring freshers, LMS can assist with assessments of all kinds. The training program can be used to access which trainee would be suitable for which type of job; through it, you can fulfill all candidature requirements based on real-world skills displayed during training.  

Reduced Training Costs 

Training can cost a fortune, especially when it fails in the long term. The commitment towards the training of a company can even cost an employee their initial career progress, and nobody wants that. An LMS helps reduce the cost of training while ensuring no errors or unsuitable training curriculum is allotted to a trainee.  


Training isn’t fun at all, but a well-implemented and built LMS can do that for you. Various gamification options can be added to the system, and you can leverage smart learning for different modules and courses. Not only would it make training fun, but boost learning as well.  

Round-the-Clock Access 

24/7 access for trainees to go through modules assigned to them. LMS allows an ecosystem that can be accessed from anywhere and is online all the time. Trainees no longer need to worry about traveling to the office for training and can learn at home.  

How to Begin LMS Software Development?  

Creating an enterprise solution requires great knowledge of market trends and complex analysis of your business goals. Hence, it is always advisable that you begin your LMS software development with thorough market research and competitor analysis.  

That way, you will know what trends resonate with your business goals and what strategies your competitors use to lure the target customers. Besides that, you can even uncover the competitive features and tech stack needed for top-notch LMS software.   

Consult with Experts  

Once you clearly understand your business goals and the motive behind LMS software development, you need to consult with the experts. An expert digital consultant will help you to audit your business requirements and frame an effective software development strategy.  

What features will you need, the tech stack, resources required, and the development stage? Every such aspect can be simplified with expert consultation. Besides that, experts also have complete knowledge of the latest tech trends in your niche. Hence, you can leverage that information to ensure maximum success for your business idea.    

Leverage Staff Augmentation Services  

The next big step for LMS software development is hiring experienced developers. You need a talented team of engineers, including developers, testers, UI/UX designers, and even project managers, to transform your ideas into reality.  

Hence, the best way to do that is through staff augmentation services. Using staff augmentation services, you can hire the best developers that dedicatedly work on your project until it is deployed on your choice of platforms. You can choose the number of developers and even scale your LMS software development team according to the project requirements.   

Not to mention a reliable eLearning development company also offers flexible hiring models that you can leverage for a cost-effective hiring process.    

Choose Suitable Features and Tech Stack  

Features play a crucial role in determining the scope of your LMS solution. Offering competitive and unique functionalities to your customers improves the UX (user experience) and makes your product stand out from the competition.  

Hence, we have listed some essential yet engaging features you must implement in your custom LMS software.  

  • Profile Creation
  • Access-based Rights  
  • Progress Tracking  
  • Online Tests and Assessments  
  • AI-based Grading System  
  • Reporting and User-Analytics
  • Data Management  
  • Social Sharing  
  • Offline Learning Tracking  

Always Begin Your LMS Software Development with an MVP  

MVP stands for a minimum viable product. It is a digital service that allows you to transform your ideas into a functional prototype for easy evaluation. With MVP development, you can easily validate your LMS software’s features, designs, and overall experience without actual development.  

That means any alterations can easily be made to the product before the software development begins. Overall, MVP development reduces the cost of testing and eliminates the chances of rework.   

Read More: MVP Development for Startups

Develop, Test, and Deploy Your Solution  

Finally, you must develop your custom LMS software based on the approved prototype. However, make sure to follow the agile methodology for your LMS software development. That’s because the agile method allows you to get constant updates on your project after every development cycle.   

That means you can verify the features and designs and even change them accordingly without affecting the previous development cycle. All the changes will be live in the next sprint, decreasing the cost and time of your LMS software development.  

Hence, hire developers from a reputed LMS software development company that follows the agile methodology.  

Do not forget to test your product, as it ensures that your LMS solution optimally performs on every platform and device available in the market. Testing also detects the errors that were left unidentified during the development process. You can choose between manual and automated testing depending on your project requirements. Finally, deploy your solution on your choice of platform.   

Cost to Develop an LMS 

The cost to develop an LMS depends on the functionalities you want in it. A simple LMS would usually cost less and require only an eLearning development company to develop it for you.  An AI-based LMS would require you to hire an AI development company and use various third-party APIs and services.  DevOps implementation services allows you to further better the LMS, and implement the features even better. Consult with experts to know the exact cost of your LMS, as suggesting a ballpark doesn’t do justice to your time. All you need to do is contact us, and our consultants would help you all the way.  


The learning management system has been effective in increasing employee learning efficiency, decreasing friction in learning, and overall contributing to productivity in a company. I hope this blog helped you understand major factors related to LMS for small companies. If you want to develop an LMS for your company, we will be happy to help you. Book a free consultation with us, and our eLearning experts will guide you through LMS software development.


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