Cost of developing 1 hour of elearning

Steve Flowers said:

I've referenced Karl Kapp's article on estimation.

http://www.astd.org/LC/2009/0809_kapp.htm

In my experience "it depends" is a big x-factor. But you should be able to get a rough order of magnitude that you can line up against an expectation of quality on delivery.

I've attached a document to this post - will attach another to a follow-on post. The first document is a quick estimator based on this chart and my experience in the industry. This is based on GSA schedules (government) which may be significantly higher than what you might experience in your industry. These are also rough estimates for proportions of distribution between labor categories. Your mileage may vary. The second is a definition of some factors commonly associated with interactivity rubrics (one factor in the calculation of cost / value).

I've found the best things for maximizing value and minimizing risk are:

1. Complete a good pre-design analysis. If you go into a statement of work with a weak description of the delivery, or leave your expectations to interpretation... you are going to pay more for that risk.
2. Separate the expensive and special outputs into separate deliverables. Need a 3D model or a complex animation? Make that a separate delivery. The risk is that if you define one type of output, the vendor may tend to paint the entire deliverable with the same level of effort brush - handily masking more simple tasks under this level of complexity. They are, of course, a business. Maximizing profits is the name of the game. Particularly if you can do this while wowing the customer.
3. Be aware of labor categories. Instructional media design and development takes all kinds of team talents. If your contract is not firm fixed price, you'll end up racking up expensive hours if you don't have stratification of those hours specifically spelled out in the contract (an ISD is more expensive than a graphic artist, and typically less efficient at those tasks).
4. Stick with known quantities. A trusted partner is worth it. The best way to remove risk is to know who and what you're dealing with (this point and number 1 can lift huge weights of worry off your very own shoulders).

~Steve