Forum Discussion
Cost of developing 1 hour of elearning
I occasionally have clients ask me if there are any industry standards regarding elearning development, particularly around cost.
"Sean," they say, "How much should we be paying for an hour of elearning?"
"It depends," I say.
And honestly, they are never terribly happy with that answer. So I'm trying to come up with something a little more detailed. Obviously, there are any number of factors that come into play, but I was wondering if there were any quick and dirty estimates that you all use.
Thanks!
sean
- SteveFlowersCommunity Member
To your other point, $100 is atypically high for an independent contractor. For a large vendor, the rates may balance near this level due to the overhead carried by a large firm.
Offshore work will be significantly lower for similar quantities (and is gaining quality every year). This should drive competition and quality edge.
- PoornimaRamachaCommunity Member
Very useful piece of info. Thanks guys!
- BenDCommunity Member
Steve,
Thanks for all the resources you post. These estimators are particularly helpful.
Ben
- HollyMacDonaldSuper Hero
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:
- 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.
- 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.
- 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).
- 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
Awesome resources Steve, it's always good to have confirmation that you are in the ballpark.And nice that when I go searching in the forum I find the answer I'm looking for.
- TechDiva95Community Member
Jeannette,
Thanks so much for your reference article! As a novice I really appreciate your extra effort.
- ShaneRobinsonCommunity Member
I'm looking for someone with real-world boutique training company experience, to throw out some ball park figures on what their compnanies are charging small to medium size businesses for a 1 hour medium-complexity e-learning course built with Articulate Presenter, from the client's PPT deck.
Basically, I need a range. Can someone provide a price-range that works for clients in that market (small to medium size) that they have found from experience, just works. I would imagine that someone could say "don't settle for anything less than $2000 (insert real amount here) above your time and materials....but we price these courses out at no more than $15,000 (insert real amount here) per hour of seat time, because we have found that beyond that, we exceed what clients are willing to invest in the training project."
I understand the work-effort calculators. That is not exactly what I am looking for here. I am asking what the fair market price is.
Thanks,
Shane
- ChantelleNashCommunity Member
Steve Flowers said:
I've referenced Karl Kapp's article on estimation.
Does anyone know where I can find this article today? It looks like the link is no longer valid (and I've tried Googling to no avail).Thanks!
- PattiBryantCommunity Member
- ChantelleNashCommunity Member
Patti Bryant said:
Is this the article you are looking for?
Yep! Thank you. Do you happen to know if this is the 2003 or 2009 version?Thanks for your help!
- ChrisFletcherCommunity Member
I looked at that presentation and was thinking "wow, that's really expensive" but then when you think about it, most of the eLearning I create is probably 15-20 minutes long, and the ratios are actually pretty accurate for the amount of time I spend on them.
That's some really interesting information that I think I can use to help me approximate the time it takes me to build my modules.
Thanks everyone!
C