Monday, August 17, 2009

Cut to 30% eLearning Development Costs

Let us do the rough math.

Assuming a typical one hour eLearning costs $35,000.

This is how Do-it-Yourselfers think and do.
• Focus efforts on must learn, probably around 20% of the content.
• Apply authoring tools on the 20%.
• Develop images only for some 20% of the content.
• Develop exercises, tests, games and simulation only on the 10% of the 20%.
• Use HTML, PDF, Word, PowerPoint, etc. for the 80% references type of content.

As you can see, the step of separating “must-learn” from “reference-type” of content from the very start allows you to focus the least expensive media and tools to the references and the more costly development and creative time to the 20% content.

Your cost goes down to $10,500. It is also faster to deliver and learners learn better.

Another way of cutting down cost is making sure your estimation process helps in managing details. Oftentimes industry experts calculate eLearning development time by computing seat time. For example, one seat time hour is $35,000. I find this a questionable practice. What is involved in the details? How does one know what the learner is going through in an hour?

This is my suggestion.

Using your estimated design, estimate the following details:
• Number of text pages – number of words per page
• Number of images – what type and approach
• Number of tests – text based or other formats
• Number of games, exercises, simulation – is this Flash, or other tools

When you have these ball park numbers, ask each of the specialists like graphic artists, authoring specialists and Flash developers how much it would cost and how long it would take. Include in your specs examples or demos of what you want to emulate, follow or copy. Armed with the per unit costs, you can then now plug the numbers in each unit.

For example:
• Number of text pages - 200 pages X $10 = $2,000
• Number of images – 50 images X $45 = $2,250
• Number of tests – 20 text based tests X $5 = $1,000
• Number of games, exercises, simulation – 5 Flash animations X $500 = $5,000

Total of = $10, 250

Note: There might be other costs you need to account.

The benefit of this approach is that you have details to make good decisions. Without this level of details, you can’t control costs and time, and ensure quality.

Ray Jimenez, PhD

"Helping Learners Learn Their Way"


  1. I like the simplicity of your estimating approach. I would also consider time in my estimates for status meetings with the client, quality assurance / review / testing, pilot feedback / integration of feedback & edits from pilot. In my experience, these areas can cause large budget overruns when not controlled from the beginning. I'd add 10% of your estimate for status and 15% each for QA & edits after a pilot run of the module.

  2. Ray, your per costs numbers don't calculate:

    Number of tests: 20 text based tests X $5 = $1,000
    Number of games, exercises, simulation: 5 Flash animations X $500 = $5,000


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