Creating high quality e-learning materials which will engage learners is a complex business because it involves many different disciplines in so many different circumstances.

Quite rightly the e-learning vendor community and clients alike have looked for a simple way of expressing the cost. The result is a cost per hour of learning. This can be anywhere from £5,000 to £50,000, but is most commonly quoted at between £25,000 and £30,000 for quality custom content created from scratch.

Whilst this metric has provided consumers with a ballpark figure with which to broadly compare vendor’s development costs, Piers Lea, CEO of LINE Communications, says that calculating content cost in this way can hide its true value, lead to unrealistic expectations, and result in flawed business cases. While the metric has been useful for everyone to ‘get their heads’ round costs, it’s time to move on, or risk missing the true power of interactive learning.

Comparing two different pieces of e-learning content on price alone is about as useful as comparing the cost of an economy class flight from London to New York to a transatlantic trip on Concorde. Both flights will get you to New York, but if costed on the journey time alone, it would be reasonable to expect that the Concorde trip would be the cheaper option, taking just 3 hours compared to the 7 hours via more traditional aircraft. Of course, we all know that this isn’t the case. A trip on the supersonic jet is priced to reflect the quality and benefit of the experience rather than the duration of the flight alone - as you would expect. The e-learning community, nevertheless, has continued to use a time-based costing metric to compare all content solutions.

In principle, there is nothing wrong with using this widely adopted metric, but it can lead to disillusionment or unrealistic expectations of what can be achieved with eLearning budgets - as illustrated by the recent lack of confidence in the marketplace. It is true to say that with the average hourly cost of custom content being quoted at anything between £25k and £30k many consumers have formed the view that custom content is the preserve of the larger multinational organisation. This is simply not the case, and it is only through examining a more sophisticated costing framework, that these myths will be broken and the industry as a whole will reap the benefits.

The hour-based methodology has provided a ballpark estimation tool for consumers, with which they can budget for content development – but does not guarantee that this content will address any of their business or learning aims or objectives. It also fails to take into consideration the complex reasoning behind why one piece costs more than another and makes the following, sometimes dangerous, assumptions:

- All students will take the same path through the content

- The content has a pre-determined instructional density

- The content is trying to achieve the same kind of outcome (ie the difference between learning how to use Microsoft Word, as against a behavioural subject, or a complex scientific theory)

Same path

So keen are all vendors to stick within, or near, to industry metrics that instructional designers are forced to shy away from multiple paths through the learning to suit different audiences. This is a shame because, quite patently, one of the advantages of interactive learning is that individuals can take exactly what they need out of a piece of learning and leave what they don’t need. The art of the ability to create programmes that transform themselves to suit learners is, in my view, being held back by the metric that is supposed to be helping us.

Instructional density

When e-learning is developed with high levels of instructional and interactive design, the same piece of content will provide a valuable learning experience for students of all levels of capability (e.g. beginner, intermediate or advanced) and knowledge. This will save money in the long term and deliver considerable learning benefits. To use the transatlantic analogy, caveat number two would mean that all transatlantic flights will always be the same number of hours and cost the same, regardless of whether you fly first class, business class, economy or on Concorde! We know that this is simply not true.

If we accept the limitations that these three caveats place on content development, it is easy to understand the shortcomings of a ‘one-size fits all’ costing metric. The cost of eLearning content will always vary depending on who is using the solution, the aims and objectives and the multimedia richness of the content. Given this complexity, would it not make sense to calculate each piece on the basis of development time rather than quantity?

It’s the Business Case that Counts

What business leaders need to look at is the effect on their business that a high impact piece of learning can bring, the size of the audience they are trying to reach (together with how dispersed they are). Very often if you look at the business case as a whole, the cost of creating the programme itself is incidental compared with the comparative budget for delivering the training via another route.

For example, you may need to create 90 minutes of material but only expect users to spend 45 minutes to get exactly what they need from the learning. If you need to create an impact, and therefore make use of different media, the 90 minutes could easily cost £80,000 to create. £80,000 for 45 minutes of learning - absurd! Or not?

If you have 5,000 learners refreshing their knowledge each year and another 1,000 per year for three years (8,000 in total) then the total cost of learning comes to £10 per head. £10 per head over the next three years for a piece of training critical to your business - absurd? Of course not. In fact you probably wouldn’t mind if the creation costs were three times this amount if you thought it would have the appropriate effect.

That is where the whole gauge of ‘fitness for purpose’ comes in. Sometimes an effective piece of learning can be created for £5,000, sometimes £100,000. It really is on a case-by-case basis. So here, broadly, are the cost areas any vendor will look at.

Each of the core activities, which will directly impact eLearning development cost, falls broadly within four specific areas: analysis, design, build and testing. When calculating custom content development costs, our expertise and experience have taught us that the following areas are all essential to identifying the scale of the investment required and to ensuring a piece of content addresses all of the identified aims and objectives.

Instructional and Outline design

There is a massive difference between the cost to develop an application and the cost to interactively/instructionally design and build an application. If you have to isolate and define learning objectives, construct a taxonomy and sequencing of instructional objects and then write the detailed design documentation, the content built via this more detailed process will be a lot more expensive than a simple build where this process has already been completed. Either way, instructional design cannot, and must not be bypassed.

Size of the application

This is best defined by the number of objectives that a given piece of learning content is designed to address. The number of objectives will impact on the number of screens and in turn will affect the number of assets required (graphics, animations and video). The use of assets will impact on the richness of the content and contribute to the level of learner engagement that will be achieved by finished solution. The availability (or lack) of these assets will impact on the final cost.

Degree of Templating (self-similarity within application)

The degree to which templates of functional units can be built has a very large impact on the time to produce a piece of courseware, and as a result, the cost. Examples of templates include question types such as: multi-choice single select, multi-choice multiple select, free text entry and drag and drop. These can be developed so that the theme is continuous throughout the entire e-learning programme or can be constructed for individual sections or sub-sections within the solution.

The time to develop the required templates is related to the number of different template structures that need to be developed, not the total number of structures themselves.

In the end all this comes down to the subject you’re trying to teach.

Media Complexity

The complexity of media assets such as sound, video, animation, graphics and text has a large impact on the time to produce a piece of courseware. An application that is full of complex diagrams and 3D rendered animations is going to take a lot longer to produce than an application that uses simple photographs as bitmaps. Production of original artwork can be very time consuming.

Data reporting and performance support functions

The amount of learner tracking required and the time needed to link content to student management systems or computer managed instruction (CMI) systems, such as Learning Management Systems, (LMS) can add considerably to the overhead. Catering for different categories of user (instructor, first time student and refresher student) will also add to the required development time.

In addition, the design features of the wider system (i.e. the embedding environment) will also have an impact
1. Access control
2. Authentication
3. Central reporting and marking of assessments
4. Status tracking
5. Community support (e.g. forums)
6. Link to tutor via email

Degree of Navigation and User Interactivity

One of the key benefits of effectively developed eLearning is the degree of navigation and user interactivity that can be achieved. This does, however, have a large impact on time to build a piece of courseware. For example, 1000 screens in a linear paging structure will be much faster to build than a 3 level decomposed hierarchy, but the end solution will be more targeted towards individual learners. This should start to become apparent as the aims and objectives for the learning are identified.

Adding additional functionality such as a courseware map (similar to a site map on a website), search, history and glossary will improve the quality of the training environment, but increase the time taken to develop it and impact the cost accordingly. This is the same when constructing learning activities and interactive components such as quizzes that take longer than building a simple static screen. It is essential to consider the level of experience of the developers when looking at this, as often creativity and adding small interactivity or navigational tools can make the difference between a piece of eLearning being an overwhelming success or simply a good job.

Standards Compliance

Standards are often overlooked, but are becoming increasingly important as custom content inventories increase. Where an organisation has existing content, which is hosted on an LMS, or LCMS (Learning Content Management System) compliance with standards such as AICC or ADL SCORM may be a necessity. Ensuring content compliance can add significantly to the overheads of creating instructional objects, but can increase the acceptance of a piece of content within an existing learning environment.

Usability Testing

Usability testing is often omitted from budgets, with the effect that content is released to the learning masses without undergoing businesses answering the most important question - does it work! Without learner support of any piece of e-learning content, any investment would be wasted if employees won’t use it. Always budget for extensive usability testing to ensure that the end product meets the demands of your learners - omit it at your peril.

Addressing all of these specific elements of content development will ensure that a piece of content will deliver results by helping to drive performance and competitive advantage. Costing e-learning content based on these elements will also enable the industry to create a level playing field for all vendors and consumers alike to cost content.

This methodology will also enable e-learning to realise its true potential, rather than being a marginalized and underestimated training solution. With Return-on-Investment at the top of every boardroom agenda, costing content based on development time will also enable the first accurate calculations to be made for e-learning. This, if nothing else, is reason enough to develop an accurate costing tool which gets away from the current inflated and misleading hourly rates.

And finally, remember, airlines offer different classes to suit different needs, all of which require business cases to justify. Even in today's economic climate people still chose to use premium classes where the business case stacks up.