Build vs. Buy: Understanding the Costs of Building Online Learning Technology

Thought Industries
Aug 9, 2018 10:00:00 AM
If you're trying to decide whether your organization should build or buy a new Learning Management System (LMS), this article is for you.
As a growth engine for your business, the LMS you choose will have a big impact on your success, so this is definitely a decision you want to get right the first time.
To help you get started, we outlined some important items you'll want to consider before you decide to build a system from the ground up, or purchase an off-the-shelf (OTS) or customizable online learning solutions.
As you start to weigh your options, it's important to think carefully about the budget, business goals, and resources you can allocate towards your online learning program. 
More often than not, the time, money, and headaches you'll save by selecting an off-the-shelf (OTS) or customizable learning solution far exceeds the cost of building a homegrown system. But, there are times when  building a homegrown system makes sense.

Weighing the Costs of Building Online Learning Technology

In the initial stages of launching an online learning initiative, your organization is faced with a big question: Build or buy? If your organization plans to educate internally, or to a group of 50 or less external learners, a homegrown or MacGyvered solution might make sense. In fact, you could probably store educational materials on an internal corporate drive, in the cloud using Box or Google, or upload learning to YouTube or Vimeo. In this instance, your organization isn't necessarily concerned with reporting, eCommerce, design, or a customized experience. 
However, if your organization is looking for something more professional or sophisticated, building is going to require staff and money to help with development. To handle things like reporting, eCommerce, and design, your organization will need to negotiate contracts and then dedicate staff to managing those tools and accounts. 
These kinds of costs can add up. Here are some things to consider about building before you forgo the idea of buying:

  • Hosting: If you want your learners to be able to access online learning content anywhere at anytime, your organization must consider hosting costs. Just like your corporate website, you'll need to pay hosting fees for your online learning environment to live on a server with a unique domain. Other hosting costs to consider include video and large file hosting. 
  • Authoring: Creating an online learning environment with 3rd party authoring tools can be costly to integrate. After you figure out how to get the content into your learning environment, you also need to consider the costs of curating that learning content.
  • Design: Once you have your online learning framework, process, and approach in place, if you don't have in-house designers and content creators to actually deliver the experience, your organization will need to hire outside help. When considering design work, don't just think about the look and feel of your online learning environment, also consider any curriculum or instructional design costs. 
  • eCommerce: Want to sell courses? Well, that will come at a cost for you. Prepare to pay a monthly subscription fee for eCommerce tools like Shopify, BigCommerce, and WooCommerce. Then prepare for possible headaches when integrating those tools into your homegrown platform.
  • Reporting: There are a lot of free reporting tools our there. If you have a small-scale learning initiative, those tools might work for you. Remember to factor in the time and effort it takes to manage and pull reports from different tools before selecting which ones you'll use to measure your courses' success or  learners' performance.

  • Development and Upkeep: When creating the initial framework your online learning initiative will live within, does it require IT help or development work? Depending on the complexity of the initiative you are looking to build out, having the necessary resources behind launching (and maintaining) the initiative can add up.

Deciding If Homegrown is Worth It

Homegrown solutions might work for small scale online learning initiatives or for an organization committed to creating something very unique and profitable to gain competitive advantage. But, without the manpower and money to support those initiatives, organizations might run into roadblocks. Plus, as your learning initiatives scale, you could struggle to keep the platform up to snuff. 
Here are some final homegrown considerations:
  • Staffing expenses associated with paying current employees to work longer hours or hiring new staff.
  • Costs associated with roll-out delays associated with any failures, staff learning curves, or platform tweaking. These could be loss of sales, legal issues, paying employees more, etc. 
Choosing an online learning technology that offers an all-in-one solution, one that you don't need 3rd party tools and extra man-hours to manage, might be a better solution for your business. Weigh all of the pros and cons for building versus buying online learning technology before committing to one or the other. 
To learn how Thought Industries can help, request a platform demo today.

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