The cost of e-learning?

So the most often asked question (even if not audibly asked) when it comes to your e-learning solution is 'how much will it cost?'.  It's like the baby elephant in the room at the start of your first exploratory discussions between L&D people and the e-learning service provider that grows to a full-scale mammoth by the time you've scoped out the project and need to know just what your solutions are likely to set you back.

The answer from most vendors is usually a 'it depends' or my personal favourite 'it's like asking how long is a piece of string'.  Fair enough, e-learning can be exactly like that, you can have short and simple pieces or long and complicated, highly interactive 3D widgets with virtual reality. 

In the learning technologies world, I've been able to put together a price-guide document because, well, the technologies are a wee bit simpler when it comes to pricing.  In our case we usually work with open source technologies so there's no per-user licensing on your LMS, but there are hosting costs and some integration type costs if you want to go down that road and they have standard-ish costs depending on what is being integrated or set-up.  The training, the consultancy etc come in packages around time and materials and they're pretty standard.  It means I can offer up clients a total Totara LMS solution for anywhere between $10,000 and $100,000 (and more!) but it's usually pretty visible and people generally 'get it'.

The solutions or 'content' is more complex because essentially the vast majority of what we're talking about here is a bespoke solution.  That means the e-learning you get at the end of it is designed solely for you rather than being purchased off the shelf (anyone remember the phrase COTS - commercially off the shelf?).  There are a gazillion variables that go into producing e-learning from the cost and quality of your graphic design, to your animations, video work, themes and overall design, platforms, technologies, interactions etc.  The one that is probably most important is often missed from a lot of vendors and buyers - the instructional design or ID work that goes into the end product; maybe it's just taken as a given (but hey, I'd want to talk about it and not assume...).

So I know there's big studies in the US around what e-learning should cost; here's my mini-guide on what I think (note this is Nigel, I not Kineo official pricing please!) you should be looking to spend depending on your needs and wants.  All are based on a single piece of e-learning of average length (let's call that half an hour of e-learning for the sake of arguement).

Cheap Solution; so we do it all in-house the cost is just time.  Oh and any stock images.  And perhaps quality.  Really this depends on who you have working for you and what they can do and how long it takes them (and their salary of course!).  Chances are you may not have the insider you want here and need to go outside - and whether this is the cheapest option or not is highly debatable - but it often looks that way to organisations!

Light Solution; I call it light because that's essentially what we're talking about here; often light on ID, light on graphical design or originality and certainly a light interactive approach.  Your asking someone to convert your Powerpoint or take your docs and make them e-learning on a very tight budget you'll get this type solution.  It's going to cost you very little in the big scheme of things, bring your little wallet and expect to pay $1,000 to $5,000 for a piece here.  For those of you already baulking that we went into the thousands at the lightest end you best not read on, it's important to realise that e-learning is not super cheap (but it does provide excellent ROI).

Bronze Solution; So if you want to move up and get a serious piece of e-learning this is where we hit the higher quality solutions (and the smart amongst you will have already noted that bronze is the cheaper metal!).  In this case we're talking actual e-learning with a higher degree of 'swish' about it generally than the light in.  I would expect a decent bronze solution to still have plenty of ID work going in to it (yes.. storyboards...) and expect decent graphical schemes, some interactions and things for the learner to do (not just watch or click next).  It may even contain some minor animations but probably more likely short video snippets and static graphics.  Some providers will do this in a 'rapid' way and keep your costs down - sometimes this can still spiral into the expensive regions.  I would expect to pay from around $5,000 to $20,000 for something that fits this description.  I know it's quite a range but the $5k end is for a swish and more learning-filled version of the light solution, but even if you have well-done page turning with custom graphics and good design you're probably not far off the higher end of the scale.

Silver Solution; For me the next level of solution is all about the interaction of the material.  Bronze is generally still fairly simplistic in design but as we move up we've now got a greater ID input and more things to do in the learning.  Problem is that more to do means more cost because it's the interactions that really take the time to put together.  The graphics again could notch up to the degree that your own characters better represent your organisation, there are far more likely to be some animated pieces into the solution and/or professional video.  The cost for a silver solution expect to open up your cheque book a little more to the tune of $10,000 to $30,000 per piece.  Yes I know it overlaps the last, but this is far from an exact science you know - I'm just trying to get the picture across for you!

Gold Solutions; So before you started reading this is what you thought you wanted right?  Highly interactive custom design, high-end ID work that you can show off and people go 'wow' as well as hitting all the learning marks and actually having an impact on the way your organisation does its business.  This is the type of solution that meets the aims, tracks everything you need done and is fun too (please make your solutions fun people).  What will it set you back?  I'm guessing you'll pay $30,000 to $50,000 for it and if you have the sort of budgets that allow for that you won't regret it either if it's done the way it should be.

Diamond Solutions; Gold may be rare but it's also soft - if you need something hard invest in diamonds!  I'm just being a bit silly but there's plenty of room to wiggle here - there really are higher end solutions than gold - often they're not about the interaction, the ID or the graphics but about some other aim you have.  If your work is 3D for example or requires extensive gamification or some alternate type VR world then forget about the previous costs and trade in elusive gems.  Once upon a time it looked like 3D was a big player in the e-learning world but the costs are generally so high for true 3D that most are steered away from it beyond engineering type applications.  It's also harder to find 3D vendors of educational materials as it's a hard skill-set to have on-board.  I remember once when I was running the Navy e-learning centre that we did a full 3D walkthrough familiarisation training piece of a Navy warship.  It was awesome and if we had been external would have cost a fortune in development - we were approached by someone in the Royal Navy in the UK about doing something similar for their new warships and if I remember rightly we were talking in the hundreds of thousands (sterling!).  There is almost no upper limit on your spending here depending on what you want and are prepared to pay for.

Economies of scale; yes good news guys is that it gets cheaper the more you have done from most suppliers!  A single piece may cost you $30,000 but 10 pieces may cost you only $15,000 if you are using some re-usable bits and pieces like graphic or design screens.  It's not unreasonable that you get some significant savings this way due to the way the e-learning producer is able to re-use things along the way.  If you're looking above 2 or 3 pieces expect to see discounts that grow the more you have done - but get that sorted before you start out or you could end up being each piece one at a time at premium costs.

In summary I've attempted to answer the piece of string question; somewhere between a few thousand and hundreds of them is your answer - when you ask for your e-learning the key is to have some understanding of why it costs that much and how they justify the costs involved.  As a final final here you need to be very careful when getting work done and specifying what is to be done - if not it's entirely possible to pay for gold and end up coming up 'light'!

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