What Affects the Cost of E-learning Projects?

How much does e-learning cost? That's a difficult question to answer since it really depends on the circumstances surrounding the project. There are, however, clearly identifiable categories of costs and considerations.

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How much does eLearning cost? That's a difficult question to answer since it really depends on the circumstances surrounding the project. There are, however, clearly identifiable categories of costs and considerations. By working through these various categories of cost for the particular circumstances you face, you should be able to derive responsible estimates of the total cost of eLearning or develop a list of questions to pose to vendors to ensure you have your bases covered.

Factors that Affect Direct and/or Vendor Costs

Development Considerations
  • Seat time/run time
  • Complexity of content
  • Availability of content
  • Stability of content
  • Desired level of learner interactivity
  • Desired level of professionalism of product
  • Use of established development process, templates and standards
  • How project will be managed? (communication, reviews, reporting, accountability)
  • Development tools (Which? Who provides?)
  • Developers' expertise with tools
  • Developers' pace

Factors to Consider for Internal Projects

Direct Costs
  • Infrastructure/LMS (purchase, support, management, maintenance)
  • How project will be rolled out? (facilitate adoption of new learning initiatives or change management)
  • Market and promote training
  • Performance measurement

Hidden Costs
  • Ripple effect of development effort on other work
  • Audience (Who? How many?)
  • Distribution costs
  • Equipment/facility costs
  • Time away from job/disruption to productivity
  • SME access and time: typically the same as Instructor Led Training (ILT)

Factors to Consider for Internal Projects

Hidden Value
  • Will the company see the value in factors that don't show directly?
  • Freeing up of premises
  • Less wear on ILT delivery, equipment
  • May free up subject matter experts to perform job related tasks rather than training tasks
  • Less travel costs for learners
  • Less travel costs for instructors, or subject matter experts
  • Consistency of training delivery; promotes company standards
  • Potential for increased learner effectiveness
  • Potential for attitude change of employees (impacting retention, job satisfaction)
  • Access to training 24/7 in or away from office

General Considerations

Company Culture
  • Can learners learn on the job? Will managers allow it?
  • Are learners/the company rooted in ILT?
  • Will the budget process support eLearning?

Learner Impact
  • Control of own learning: just in time, self-paced, easily referenced
  • Ability to train large numbers faster/simultaneously with consistent content

Tips to Help Drive Down the Costs of eLearning:

  • Get organized, set goals and determine clear objectives! Don't forget to include input from all key stakeholders to avoid rework later on.
  • Build shorter courses that average about 15-30 minutes. Quicker development times will lower costs.
  • Be creative with a more blended approach to your training.
  • Reuse content and create templates to save time on future courseware development and updates.
  • Create pre-tests so learners may skip courses containing material they already know. This leaves them free to take only the training they need.
  • Consider supporting informal learning efforts in tandem with more formal ones. Social media allows for the use of "free" user-generated content in your training efforts.
  • Avoid using proprietary tools, technologies and media or those that are simply "in fashion." Ensure these items will meet your development and learner's needs over time. What's hot today may not be so hot tomorrow.

In Summary

Planning and investment in planning will reduce development costs whether your project is developed in house or outsourced. Remember, though, that good development requires specialist skills as they relate to tools, design, instructional competence and graphics. How well you plan for it, position it and implement it determine the cost and outcomes to your e-learning project.

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