-2. What does the cost of an e-learning solution depend on?

- The cost components for e-learning include the courseware, the course delivery expenses (including instructors), marketing/promotional communications with the students, and administration and support expenses.

Tell Me More

You can make better business decisions about e-learning if you have a good grasp of what the cost components really are. (In the same way, knowing that the cost of owning a car is partly the purchase price but also includes the ongoing cost of maintenance and insurance helps you figure out what kind of car you can really afford to buy.)

In a sense, e-learning is a lot like any kind of product you're trying to get to a customer. You already know that the major costs for making and selling any product to a customer depend on:

- Making the product (or buying it to resell)

- Marketing it so your target customer knows how it meets a need that she has (and so the customer knows that you have the product available)

- Delivering it to the target customer

- Administration and support personnel for the previous tasks (often thought of as an indirect cost)

If you think of e-learning using that basic product model, with the student as the customer, then the basic e-learning cost components will turn out to be very familiar to you.

- It's going to cost you time and money to create (or buy) the e-learning courses.

- It's going to cost you time and money to make the students aware of the courses.

- It's going to cost you time and money to deliver the e-learning courses to the students.

The following table summarizes the cost factors for e-learning:

Cost Element


E-learning courseware

Course development cost (or cost of purchasing/renting existing vendor-developed courseware). Even if you have courseware designed for the classroom, it will cost you something to prepare it for e-learning use.

Cost Element

Course delivery

Marketing communications to students

Administration and support


New hardware and software for your e-learning environment unless you're using computers and IT infrastructure that already exist in your company (and that are being paid for another way).

Instructors, assuming your e-learning approach uses instructors.

Promotional communications to the prospective students about the courses.

Administrative personnel to load courses, manage schedules, fix problems, etc. (Don't forget the user help desk.)

Your e-learning implementation might have additional incidental costs, but when you're doing a basic cost analysis, the table includes the main costs to look at.

-3. What else affects the costs of e-learning?

- The biggest thing influencing your e-learning costs is the size and complexity of your training problem.

- There are only a handful of factors that make up the remaining dimensions you need to think about.

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Perhaps the biggest thing influencing your e-learning costs is the size of your problem. Think of it this way: If your problem is to move people from one end of the city to another, then you have a rough grasp of part of the problem. But it's a different problem altogether if you're trying to move a half-dozen people one time or if you're moving 100,000 people every day. In the first case, you can rent a van and drive them over yourself. In the second case, you might want to consider getting the city to build a rapid transit system.

There are only a handful of key factors that can affect the size and complexity of your e-learning problem and thus affect your e-learning costs. These problem factors are listed below, but you can find details about them in Chapter 8:

- Number of students

- Student time available for training

- Time to build

- Deadline to train everyone

- Long- versus short-term shelf life

- Starting and ending skill levels

- Need for instructor

- Need for collaboration

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