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eLearning Design & Development Cost Analysis…How do I prepare for 2018?

As a pioneer in eLearning, I have been part of over 5000 plus projects from Project Management, Instructional Design, Instructional Development and LMS management. The biggest roadblock I experienced, in the beginning, was pricing the jobs based off of fair market value. I looked at sites such as, Career Builder, and Indeed and looked at the hourly cost for each of the assignments. I also pulled out past logs to see based on word count and slide count as well as level on how long the project took to complete and based my hours from past experience as well as verifying it against the industry benchmarks.. I also looked at every department within my City as well as FD from IT/Applications, QA, Legal, Design, Graphics etc.. and calculated their hourly rates and adjusted our final per hour rate for project proposals. As I created more projects this task got easier and easier in which I created a spreadsheet, actually my Business Analyst did, in which I can enter the hours and the final cost would calculate. The main source I used as a guide was ATD formerly ASTD.

The first step you need to do when your hourly is configured is breaking down your design and development price based off of the levels you are going to implement. For example, let’s say you get an existing power point from a Captain or Chief and is requesting to provide the brick and mortar training online and is now requesting to convert an existing full-day training program to self-paced eLearning. I spoke with the officer and based off of his/her request we agreed on a creating a very basic online course. This type, of course, is considered what we call  Level One Design and Development with a linear approach with some interactivity every 4-6 minutes to keep the learner engaged. The biggest thing you need to know is eLearning is broken down into three levels when it comes to the development of the content. Can your department create it or do you need to pay an external contractor? 

Here are the parameters you need to know when it comes to elearning content development:

Level 1- Rapid Development

Level 2 – Custom e-learning

Level 3- Rich Media Multimedia Elements (audio, video, custom graphics, animations) Simplistic and used sparingly Includes custom visuals, and complex animationsExtensive use of audio, video, transitions, animations, and simulations.

The one thing to remember is Interactivities are Limited to off-the-shelf templates and features provided by the authoring tool. If you require complex, custom created designs and templates or Branched logics, scenario-based content questions that allow learners to explore multiple paths and feedback levels. The tools used for Development of these type of eElarning modules are the following: Articulate Storyline 2, Adobe Captivate 9, Expedite LearningArticulate Storyline, Expedite Learning, and Articulate Storyline, If you are looking for Custom HTML5Images/ or Graphics/Illustrations these can be taken from Sourced from Stock libraries, not custom created Graphics created based on custom requirements. If the courses require High impact custom graphics and illustrations or Assessment/Knowledge Check Questions these are all types of Simple Questions-Multiple, single choice/True FalseChallenging and application-oriented questions such as Scenario-based questionsBranched Assessments, Problem-based scenarios, Business SimulationsCourseware DesignRequires basic Instructional design strategies requires more complex Instructional design strategies, includes the necessary organizational branding guide i.e. colors, corporate logo, etc.Rich storytelling approach and gamification elements to make the training more impactful and engaging includes the necessary organizational branding guide i.e. colors, corporate logo, etc.Course NavigationBasic page-level navigation such as play/pause, next, back, menu and help.Basic page-level navigation such as play/pause, next, back, menu and help.Basic page-level navigation such as play/pause, next, back, menu and help.VoiceoverMay be included on a need basis, charged separatelyProfessional voiceover most compelling Professional voiceoverSCORM FunctionalityBasic- bookmarking and performance trackingBookmarking, Performance tracking, Interaction reportingBookmarking, Performance tracking, Interaction reporting, and other SCORM features based on the design device CompatibilityDesktops, Mobile devices (Tablets)Desktops, Mobile devices (Tablets)Desktops, Mobile devices (Tablets)The ratio I will utilize is industry standard based on of past practices so the ratio for development is 127:1 (that is, 1 hour of e-learning takes 127 hours to develop). For 3 hours, that’s 127 times 3 or 381 hours total work. That’s the work for everyone on the team, not just me.
Based on ATD standards here is the breakdown of tasks and the percentage of time for each item needed for the design and development.

Front End Analysis: 9%
Instructional Design: 13%
Storyboarding: 11%
Graphics Production: 12%
Video Production: 6%
Audio Production: 6%
Authoring/Programming: 18%
QA Testing: 6%
Project Management: 6%
SME/Stakeholder Reviews: 6%
Pilot Test: 4%
Other: 1%

The above breakdown helps us determine an estimate based on of our analysis. Eventually, once you get a few courses under your belt you can utilize past cases for your proposals when requesting pricing or put together your budget for the upcoming year.

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