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A decision makers overview of elearning

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The questions everyone wants to know the answer to are: who is the best provider and what does it cost? …

The questions everyone wants to know the answer to are: who is the best provider and what does it cost?

The answer is: they are both trick questions.

Each is easy to answer if you do not care about the outcome other than the cost and being able to check the “training complete” box on a to-do list. However, the answers are not at all straight forward if you actually want to deliver the outcomes envisioned by the client (internal or external).

My purpose here is to draw back the curtain and expose the wizard so that you are better equipped to:
• Understand more of what is available and how it may relate to your organizational needs,
• Ask the right questions and lead the procurement process rather than being sold to,
• Better position yourself to define the project scope so that it both satisfies your needs and is within budget for money and nonmonetary resources,
• Keep with best learning practices and are capable of returning the knowledge transfer results and true ROI your organization expects,
• Identify the questions you need to ask, and
• Develop some expectations as to how your questions should be answered in order to demonstrate that the solution provided will meet your financial and outcome requirements.

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  • 1. E-Learning – what, how and why? _____ A Decision Makers Overview of E- Learning.© Philip Herring 2011 Page 1
  • 2. Table of ContentsTable of Contents .......................................................................................................................................... 2Forward: ........................................................................................................................................................ 3The first questions:........................................................................................................................................ 4Learning Styles vs. Training Methodology: ................................................................................................... 5 Learning Styles .......................................................................................................................................... 6 Training Methodology ................................................................................................................................ 6 Coaching ................................................................................................................................................ 6 Guided Design ....................................................................................................................................... 7 Just-in-time training................................................................................................................................ 7 Accelerated learning .............................................................................................................................. 7E-learning is: ................................................................................................................................................. 8E-learning is not: ........................................................................................................................................... 8 The difference between e-learning and effective e-leaning: ..................................................................... 9 Translation vs. Interpretation ................................................................................................................. 9Where E-learning is effective and where it is not,....................................................................................... 10 A few truths about the state of e-learning................................................................................................ 10 Where Distance learning is not effective ................................................................................................. 10 Where e-learning is effective ................................................................................................................... 10How to Choose a Provider .......................................................................................................................... 11 What’s the difference?............................................................................................................................. 11 Providers.................................................................................................................................................. 11 Commoditization of Training.................................................................................................................... 12 Major Red Flags ...................................................................................................................................... 13 Price vs. Cost .......................................................................................................................................... 13 Use of Standards ..................................................................................................................................... 14 Capabilities .............................................................................................................................................. 15 Operational Capabilities Checklist:.......................................................................................................... 15Is e-learning really saving $ or is it just a transfer of costs? ....................................................................... 16Expected Costs Based Upon Project Type................................................................................................. 16 Interface................................................................................................................................................... 18 Content .................................................................................................................................................... 18 Compression Rates ................................................................................................................................. 19 Other major cost sensitive design elements............................................................................................ 19Summary..................................................................................................................................................... 19References .................................................................................................................................................. 20© Philip Herring 2011 Page 2
  • 3. Forward:An insider’s view of the value of distance learning initiatives in a corporate environment.As a leading consulting to small and Fortune rated training enterprises I am both a buyer oftraining programs and a provider of training so I can speak from experience regarding salestactics, courseware development, the roll of technology and negotiation of third party contractsfor training development and delivery.Our clients expect that we are able to identify and provide the leading edge skills and abilitiesrequired by industry experts through effective knowledge transfer. If any of these elements arenot true then there is no reason for any organization to come to us for training advice.This puts us in a very tight position. Develop and deliver on the promise of excellence,efficiency, and provide a best in the world thought leading learning experience that no otherorganization has yet developed or lose credibility in a world where credibility and capability iswhat keeps us in business.The best way I know to accomplish this is to educate our clients and potential clients in themethods and effectiveness of training, how to choose training providers, and how to know whatquestions to ask in purchasing training using the inside sales and procurement information thatonly training providers have.This may sound counter intuitive but it is my belief that a well informed client is better able todiscern:  Differences between training providers,  Identify value added capability service and delivery,  The true value being offered by all competitors responding to requirements.So, if you know what I know and you are able to challenge our organization in every aspect ofyour requirement, very clearly articulate the result you expect and understand what it takes toget there we never have to sell anything. Our interaction with your organization, as a client,becomes a consultative process whereby our industry leading capability and delivery areevident and we can concentrate on fulfilling real needs rather than trying to convince a clientthat what we do is the best solution. Philip Herring© Philip Herring 2011 Page 3
  • 4. The first questions:The questions everyone wants to know the answer to are: who is the best provider and whatdoes it cost?My answer is: they are both trick questions. Each is easy to answer if you do not care about theoutcome other than the cost and being able to check the “training complete” box on a to-do list.However, the answers are not at all straight forward if you actually want to deliver the outcomesenvisioned by the client (internal or external).First of all, it is not fair to expect that anyone not accustomed to:  Designing and delivering “Learning Style” based e-learning using specific “Training Methodologies”,  Fully utilizing the capabilities of e-learning systems,  Metrics that look at current state, development state, and end result requiremtns, and  The way adults learn (adult learning theory) will understand all the questions that need to be asked before considering an e-learningsolution. (See learning styles vs. training methodologies below)This would be akin to asking someone from the training industry to manage a corporateacquisition. Easy, right? – Just pick a target company, ask “how much does it cost”, and writethe check…Just as your local CPA is probably not equipped to handle the ins and outs of a merger oracquisition; in many cases the local Training Manager may not be equipped to undertake theanalysis necessary to determine the scope of the project based upon a standard training needsanalysis.Most needs analyses are based upon technical information requirements without consideringhow people learn, apply and retain information.The problem here is that the uninitiated company and its employees are in effect thrown to thesales wolves of e-learning providers where you ask for X and are delivered X. So, yourprovider has delivered x but it is not your “X” and you will never know it until you have spent thetime money and resources to produce a training program that does not deliver the goods whenyour employees under perform against your forecast results.Although this may not be a completely fair characterization of sales teams, it is the job of a salesorganization to assess your requirement and to provide their best solution to your needs. Ashard as a sales person may try, their best solution is not necessarily your best solution.© Philip Herring 2011 Page 4
  • 5. My purpose here is to draw back the curtain and expose the wizard so that you are betterequipped to:  Understand more of what is available and how it may relate to your organizational needs,  Ask the right questions and lead the procurement process rather than being sold to,  Better position yourself to define the project scope so that it both satisfies your needs and is within budget for money and nonmonetary resources,  Keep with best learning practices and are capable of returning the knowledge transfer results and true ROI your organization expects,  Identify the questions you need to ask, and  Develop some expectations as to how your questions should be answered in order to demonstrate that the solution provided will meet your financial and outcome requirements.To take the first step in drawing back the curtain the first things we need to address are thepreconception of:  Learning styles vs. Training Methodology  What e-learning is,  What e-learning it is not,  The difference between e-learning and effective e-leaning.After these topics are covered we will be better prepared to discuss the costing of your e-learning solution.Learning Styles vs. Training Methodology:Not everyone learns in the same way (Learning Style) and there is more than one way topresent training materials (Training Method). However, each methodology supports specificlearning styles.If a learning experience (Training Method) is not engaging, only those that are highly motivatedor, by chance, learn best in the style supported by the method will be successful (willsuccessfully complete the course and gain the knowledge skills and abilities intended). In fact,all instructors have looked out on an audience of students to see heads nodding and eyesglazing over. If a live presenter teaching students in an open environment where students areaware of and watching each other notices such behavior what happens when that liveinteraction is removed? The crux of the e-learning issue lies in dependence upon legacysystems (technology) for delivery of and in producing the lowest cost per unit solution leading tocutting corners in development and a failure to deliver training based upon appropriate learningstyles.© Philip Herring 2011 Page 5
  • 6. The first mistake organizations make is accepting the widely held belief that the use oftechnology is itself a learning strategy or training methodology. In fact, according to ForesterResearch (www.forrester.com), 70% of those who start an e-learning course never complete it.This is bolstered by the Corporate Exchange University’s (http://corpu.com) researchdemonstrating that 70 % of online learners never complete their courses.This is in large part due to the misplaced use of technology as a training method.Technology is the tool that is used to deliver the result of the learning strategy and the trainingmethodology itself. Learning strategy should be driven by corporate objectives from whichdesired competencies can be extracted, constraints (technological, time, budget) can beestablished, student experience and current capability level may be assessed, which will thenallow you to outline the types of learning experiences that may be used to provide theinteresting and engaging learning experience necessary to achieve required corporateoutcomes.Learning Styles include student activities that enable a student to absorb new knowledge orinformation.Training Methodology includes those elements that support specific learning styles and whichalign directly with how your audience learns. Methods include both systems and specifictraining actions.The best training methods make use of a combination of methods which are supportive of asmany of your trainees learning styles as possible (Kevin Moore & Greg Harmeyer April 23, 2002Learning Solutions Magazine) such as:  Coaching,  Guided Design,  Just in Time Training, and  Accelerated learning.None of these labels are intuitive when applied to e-learning as they were all developed beforethe advent of contemporary technology and systems. In any case, each technique wasdeveloped to address those cognitive areas that bolster learning for adults, are equally relevantand can be translated to apply to e-learning today.For example: Coaching is the act of engaging a student in an actual problem solving discussion during which something new is learned. Coaching allows a learner to apply earlier lessons to real scenarios. This adult learning method includes procedures for joint planning and goal© Philip Herring 2011 Page 6
  • 7. setting, coaching, information sharing and modeling, learner information gathering and practicing, analysis of and reflection on the learner’s experiences, and coach feedback (Leat et al., 2006). Coaching also recognizes that effective learning requires experience. Guided Design is characterized by direct instruction by requiring students to participate in pre-specified problems. It requires students to apply new knowledge skills and abilities to real world problems. Guided design may use self-paced, e-learning, or ILT teaching delivery methods to cover core subject matter which must then be applied to actual working problems. The guided design model also provides for students to work in group settings in order to solve problems in a collaborative environment and is designed to promote critical thinking and self-directed learning (Hancock, Coscarelli, & White, 1983). Just-in-time training is characterized by the immediate effect of delivering new skills usage opportunities, tailored to an individual’s roll and in a real world context, within a short time from training delivery. As an adult learning method Just in time training provides the information required to improve performance or complete a task, on-the-job use of the information or guidance, and the availability of input from a “coach”, as above, on an as-needed basis Accelerated learning, first called suggestopedia (Lozanov, 1978) techniques are the most widely used and it has found its way into global management systems such as ISO standards training. RAB-QSA, one of the world’s largest Quality Management education certification bodies, now requires that training providers use accelerated learning methods as a part of all accredited training. The use of these methods is auditable as part of the annual review process for RAB-QSA certified training providers. In fact, the failure to demonstrate accelerated learning techniques will result in a major non-conformity which, left uncorrected, results in the loss of accreditation for the learning program. The primary aspects of this method are the use of “tranquil” learning environments and implementation of active learner engagement in the learning process (Meier, 2000). Active learning includes role play, practice exercises, group activities, presentations and journal writing which increase retention and expedite the student learning process. Donovan et al. (1999) defined how people acquire, learn, and master new material and information and used these definitions as benchmarks for developing operationally defined characteristics to assess the effectiveness of training. Further, the Donovan research was able to integrate key elements involved in benchmarking, delivery, and assessment to further demonstrate that adults:© Philip Herring 2011 Page 7
  • 8.  Are more attentive and more engaged with learning programs if they know why they are learning something relevant to them and of importance,  Are able to see the relevance to their job and, in turn, corporate goals and when the training is related to existing learner knowledge,  Learn faster though targeted subject related activities,  Retain information longer though problem-solving activities and consulting with others,  Need to make immediate use of the training to achieve mastery of the material,  Develop a deeper understanding and are more effective in the continued application of the training in real world environments when they are supported by on going monitoring and self assessment.These six characteristics also align very closely to those described by Graham andWedman (1989) as the critical aspects of effective adult learning programs and, due to themisconceptions surrounding e-learning, are exceptionally important to creating successfuloutcomes thus confirming Donovan.E-learning is:Technically, e-learning is learning that takes place through “electronic” means via the internet,using computers or over a network. However, most people think of e-learning as simplyeliminating the instructor and putting the course content on line or on a disk for someone to readand become magically enabled to tackle real life situations. The only training that is moreexpensive than this misguided notion and resulting underachieving / failed project is to conductno training at all.Abbreviations like CBT (Computer-Based Training), IBT (Internet-Based Training) or WBT(Web-Based Training) have been used as synonyms to e-learning while distance learning[idiom] is a method of studying which training is broadcast or classes are conducted bycorrespondence or over the Internet, without the students needing to attend a an instructor ledclass in person.E-learning is not:A panacea for training that magically reduces the costs to a fraction of your Instructor LedTraining (ILT) costs while providing the exact same or better learning results.© Philip Herring 2011 Page 8
  • 9. The difference between e-learning and effective e-leaning:The most important point to make is that well produced student centric Instructor Led Training(ILT) can only be directly translated into e-learning and maintain its efficacy in very limited andspecific cases. In all other instances e-learning must evolve beyond Power Point slides tosomething that promotes learning and adoption of new knowledge, skills, and abilities. In effectthe subject matter needs to be interpreted.Translation vs. InterpretationIt is a very small semantic difference but makes for a huge difference in the results you achieve.A translation is a direct literal move from one format to another. It is like going to an onlinetranslation service and typing in a phrase and receiving a result. Try reversing that processnow. Use the translation you received and translate back to English. What you received was adirect and literal translation of the words on the page with little focus on meaning and languagenuance. The same is exactly true for training when moving from ILT content to e-learning.Many organizations either assume the translation method is the “standard” way to create e-learning or do not know there are alternatives whereas training providers use this method forquick low cost development.However, e-Learning, exponentially more than instructor led training, must keep the people itsdesigned for in mind. How do we learn? How do we acquire and retain skills and informationand how can we present the training in such a way as to assure that it is effective and theorganization receives the results required?Only when we address individual learning styles can the "e" in e-learning factor in. Then thetechnical side — the electronic delivery — can be adapted to the learner.In some cases translation from ILT methodology is effective because it matches the type oflearning to be accomplished and the style of learning most effective for learning. These casesare generally informational instruction rather than knowledge transfer. Informational trainingprojects can include any situation where a static process is being related to students. Examplesinclude some regulatory information, policy, and some procedural information such as:  Anti harassment training,  Emergency evacuation procedure,  Regulatory reporting requirements,  Physical plant controls.© Philip Herring 2011 Page 9
  • 10. Where E-learning is effective and where it is not,A few truths about the state of e-learningFrank L. Greenagel, Ph.D.  E-learning providers have not kept pace with the development of increasingly rich IP- based delivery platforms because the e-learning in many ways is mis-understood by both providers and purchasers of training.  Developers don’t seem to be aware of how people learn which is too often demonstrated by the use of flawed leaning models and failure to include features that take into consideration differing learning styles.  Corporations are often more interested in throughput and low unit cost, so solid measures of effectiveness are frequently underdeveloped or systematically applied.  The available platform drives the instructional strategy, which may not be appropriate to the learning style of trainees or to the learning objectives.  The cost of development is high, so misguided (cheap) programs drive out the good ones in the absence of any commitment to measured effectiveness.  Effective e-learning experiences for complex competencies are difficult to scale if standards are misunderstood or misapplied.Where Distance learning is not effectiveE-learning is generally effective in every environment and situation where any other training iseffective although there are drawbacks to its use in certain situations.Speed to market is a weak spot as effective e-learning requires, on average, 4 -5 times thedevelopment time and expense as the same subject developed for an instructor led (ILT)environment.The most difficult areas to effectively use e-learning are knowledge and skill development forexperiential functions such as wiring fiber optic networks. In fiber optics (FIOS) cabling, theexperience of actually feeling how cables are stripped and clipped into connectors and thentesting the newly made connection cannot be taught through demonstration. This must betaught through hands on experience.However, e-learning may be used to supplement hands on learning and is extremely effectiveas a post class on the job memory aid or technical reference.Where e-learning is effectiveE- Learning can be effective almost anywhere as long as the correct methods are utilized andthe methods support appropriate learning styles. It is deservedly famous for its ability to:© Philip Herring 2011 Page 10
  • 11.  Reduce costs which follow a better than linear decrease as student population grows,  Increase learning effectiveness and sustainability,  Support disbursed employee networks,  Train large numbers of people in a short time, and  When used in combination with a well executed Learning Management system provide unparalleled: o Assessment of program effectiveness, o ROI tracking form the individual to the enterprise level, o Tracking of training project delivery milestones.E-learning is one of the most effective methods in supporting experiential ILT or as acontinuation of ILT training in support of knowledge retention and speed with which an individualis able to master new skills.How to Choose a ProviderI am not going to go into how to run your procurement process. You already know how toassess providers on the typical variables. Instead, I will focus on variables that rarely make itinto proposal requests.What’s the difference?A great question that I fail to ask myself often enough. To begin with it is critical that we areoperating on an apples to apples basis; comparing course to course, outcome to outcome,method to method, learning style to learning style, and all the variables under each. In everycase we need to peel back the project like layers of an onion.ProvidersTraining providers come in all sizes shapes and ability levels and generally seem to sell thesame products and services as every other provider. So how do you choose the right providerfor your organization?A few important considerations are:  Reputation with your firm and the market in general,  Brand value (lack of risk)  Support,  Scalability,  Capability and experience,© Philip Herring 2011 Page 11
  • 12.  Understanding of learning styles, e-learning methodology, and the ability to integrate the two,  Etc.Commoditization of TrainingWhen I purchase training services it seem to me that every sales rep that comes through thedoor tends to say the same thing even though they use different words and ways of presentingtheir solution; “we have the best materials, we have the best trainers, we have the best solution,etc.” so how do you choose? It seems to me that the way training solutions are presented turnsevery solution into a commodity.As a commodity how do we decide who to choose other than by the price? To begin with cost isprobably a better measure. Dealing with the commodity effect is the first problem faced indetermining what the actual cost of a program is. My purpose is not provide a tutorial inaccounting for line items on a financial spreadsheet but rather to identify those issues that affectnot just how much you pay for a program but value and outcomes as well.The commoditization of training is inexorably linked to quality, training methods, learning styles,the value of training that delivers on its promise made toward objectives and results and theopportunities not lost due to lack of training or poor training. When a provider starts reducingcost they have to start cutting elements out of the training. As a buyer you do not care whattheir margins are but it is critical to remember that your provider can not stay in business if theygive their product away. There is only so much elasticity in pricing. Once any significantchanges are made to any program there must be a corresponding change in cost and thereforeprice.With the rare exception of some Mom and Pop operations under very specific circumstances theadage is almost always true. “You get what you pay for”Therefore, if at the end of the day you feel like you need to play a game of “eenie meenie mineycheap” run for the hills or be prepared to educate your provider. Stay away from commoditysalesmen. They generally do not know what they are talking about.An extensive list of options that are well defined and available immediately is an excellentindicator of the maturity and stability of the organization and its solutions. If everything isavailable now, they have almost certainly had multiple prior deliveries meaning they havealready integrated a best practices lessons learned model which greatly reduces your risk.There is one major variable that comes into play based upon the size and reputation of yourprovider. A small organization, generally, does not have the ability to weather the costs of fixinga problem caused by slim margins whereas larger organizations have the financial stability to© Philip Herring 2011 Page 12
  • 13. weather the costs involved with fixing delivery problems in order to save you as a future client orto salvage corporate reputation.Major Red Flags1) The most obvious red warning flag is when a vendors or training executives seek to downplay successful completion rates as a significant measure of success. Completion is also linked to outcomes although it is up to you to define what successful completion means.2) Whenever an organization comes up with an easy off the hand answer to the question: “How much does it cost for e-learning?” a. These types of questions and answers are driven by metrics spewed at conferences and sound like “it takes us X hours to develop one hour of e-learning”. b. The costing problem here is that the provider is using arbitrary metrics without peeling back the layers of your training needs and outcome requirements.3) Lack of experience delivering your solution or implementing solutions that consider learning styles.4) Lack of clear SCORM expertise and or lack of standards in the development process. a. Indicates potential scaling problems and significant risk that your delivery will be platform specific and static when it comes to updates and upgrades. b. Represents a clear risk of high future costs.Price vs. CostPrice is simply the number on the check whereas cost includes not only the number on thecheck but also the potential lost opportunity cost and negative ROI from failing to meet thetraining objectives and the resulting impact on the organization.A provider should be consultative and provide answers to your requirements that fit both thesubject matter requirements and also the delivery methodology relevant to your audience andtheir learning styles.The typical buyer of training goes into a procurement situation with the idea that there is lots ofmargin built into a proposed solution that can be negotiated away or where additional servicescan be easily added for the same or lower price. In fact there is usually somewhere in theneighborhood of 10% – 15% in negotiable margin open to discussion before the product you aregoing to receive is affected. Beyond this, if you want a lower price or more service, where is theprovider going to take it from? They are in business to make money and are not going to givethe store away or lose money on a deal and make it up on volume. The only way to reduce© Philip Herring 2011 Page 13
  • 14. costs is either though scale, where you agree to buy more at a lower price, or for the provider tolower quality, quantity, features, service, and or support. For smaller operations costs can bereduced by reducing the take home of the owners / developers. In either case the results arefraught with added risks. Added risk is an enormous factor in assessing your potential costs.Remember, “There ain’t no such thing as a free lunch!”Risk has the potential to negatively impact:  Delivery time,  Production,  Quality,  Methodology and learning styles used,  Capacity to deliver expected outcomes,  Ability to assess outcomes, and eventually  Bottom line losses for fixing a broken program.This poses a business question that only you can answer; how much risk can you stand?Once you have the risk threshold question answered, objectives and outcomes defined, andlearning styles identified you are ready to look at the providers you would like to bid on yourproject and to the variables that have a direct effect on cost.Use of StandardsThe literature is replete with examples of highly regarded training industry gurus who havemissed the boat on what it means to incorporate standards into training development. Most ofthe articles I have seen deride the use of standards because they only look at the use oftemplates that restrict scaling or at the term under a microscope and equate the entirestandards world with SCORM compliance.This is akin to using a single day’s data on the stock market to develop your life long investmentstrategy.In actuality, the use of the term standards, in these cases, is both misleading and shows a clearlack of understanding of the term and the industry. The use of standards actually is enabling of:  Scalability,  Requires that client requirements are considered on a consultative basis,  Integration of Six Sigma and PMI based Project Management methodology in your project,  Improved efficiency and effectiveness in the development process,  Greater probability that your project will be successful,  Risk reduction, and  MANY other benefits.© Philip Herring 2011 Page 14
  • 15. A provider that is able to articulate this level of understanding gets a gold star for their corporateculture being an enabler of your project and dedication to your outcomes (See ISO 9001: 2008– The definitive, global, authoritative, base source on the use of standards)CapabilitiesYour provider’s capabilities should match with the requirements identified when selecting themethodology relevant to your audiences learning styles.The following capabilities are deliverable by most any serious provider because they use astandards based SCORM compliant production process. If these capabilities are not optionsthe lack of this capability should raise a red flag. Find out why the element is not available. Ifthe answer that comes back in line with: “it will be available in our next version” or “this will beavailable but it is an extra charge” or anything that makes you think this will be the first time theyhave included the capability in a project, you should be extremely weary as they may beinexperienced. This type of provider may have low costs and seem like a great partner but whatis the cost of a botched project, missed deadlines, or the inability to provide what waspromised?Operational Capabilities Checklist:SCORM compliance becomes a major issue as it is supportive of many of the followingcapabilities. So, even if your provider does not specifically support one of the followingcapabilities so long as they are capable of designing a SCROM compliant program you can addthese features later without affecting the ability to deliver training to your students.  Registration capabilities: including curriculum, courses, instructional responsibilities; straightforward registration process  Course management: management of curriculum and courses  Competency and records management: tracking, reporting, etc.  Administration: proctor assignment and tracking, instructor assignment to courses, certifications, and regulatory requirements, reporting  Course creation: features, templates, sample of interactivity, output formats  Customizations: detailed overview of any customizations required to the platform to meet our specific requirements.  Product support: attention to detail, quality, track record with other clients  Modular design  User interface: intuitive navigation and interface  Test and assessment capabilities: online test creation and management  Interface w/ external system: e.g., HR, content management, assessment and enterprise resource planning systems.© Philip Herring 2011 Page 15
  • 16. Is e-learning really saving $ or is it just a transfer of costs?If an e-learning program follows basic design principles using: 1) Needs and requirements assessment, 2) Mapping of requirements to corporate goals, 3) Definition of deliverables that follow your requirements to goals map, 4) Appropriate Learning Styles, 5) Adequate Training Methodologies, 6) SCORM, and 7) Sufficient measures and assessments during and after development and delivery. your project is very likely to provide major cost reductions for large or geographically disbursed projects over that of ILT training programs.However, reduce costs, cut corners, and fail to follow the rules above and your e-learningproject has an increasingly higher likelihood of: 1) Failure or project restart, 2) Missed program objectives, 3) Underachieved training outcomes, and 4) Increased business costs or lack of cost reduction.In this case it is not unlikely that your cheap e-learning program will cost exponentially morethan an ILT program with post course SME support and mentoring. The program can be shownto have a much lower throughput cost per unit but this type of cost per unit calculation is justanother case of “How to Lie with Statistics”. [Darrell Huff]Expected Costs Based Upon Project TypeAs noted at the beginning of this paper this can easily become a trick question: “how much willmy e-learning cost based upon the project we decide to go with”? My apologies for not simplyproviding a nice Excel spreadsheet and check list along with a list of those organizations thathave the best track record in producing “the best e-learning”. However, based upon what youhave already read I hope that this expectation has been somewhat mitigated.Further, I did not intend to discuss how to measure outcomes which are critically linked to cost.This is a topic that is deserving of its own paper or book and is exhaustively discussed in sixsigma literature and methodology and is widely addressed in professional training forums. Formajor training projects, it is my strong recommendation that both six sigma and ProjectManagement Institute (PMI) based project management methodologies be incorporated intoyour planning and delivery. Where training programs are long term and are expected to grow© Philip Herring 2011 Page 16
  • 17. organically, I also suggest that a quality management system be utilized (e.g. ISO 9001 or otherISO industry specific standard).These systems are easily integrated, incorporate seamlessly into training operations, and coveryour organization form the local to the enterprise level. Better yet; using these systems provideready to use templates and how to guides for critical training business functions such as:  Management and client involvement,  Communication processes,  Development process inputs and out comes,  Versioning,  Measurements of outcomes,  ROI justification, etc.Use of these template and management systems results in enormous cost savings and addedefficiency as you are not creating anything from ground up, have the confidence that thetemplates you are using have been globally vetted and are guaranteed to be effective, so longas they are used correctly,Unfortunately, the push to reduce costs often translates into most effort being directed towardmeasuring the cost of a program in terms of number of “completions” and low unit costs,especially where training staff can claim substantial cost savings. Just Google “e-learning costsavings” and you will find hundreds of articles quoting training managers describing how manyhundreds of thousands of dollars their organizations have saved through the use of e-learning.Where metrics are included you will find that these savings generally come from reduced travel,lower staff costs and fewer hours spent in training and have no association with the actualoutcomes, success or lack of success of the training program itself.If you are counting costs simply based upon the size of the check you write to pay for thedevelopment and delivery of an e-learning program you have already lost. The critical elementsto be considered in determining and preparing for cost need to include:  Rigorous measurement of outcomes (benefits, efficiencies, performance increases, actual revenue produced),  Refusal to accept anecdotal accounts of success and sunk cost in determining costs  Sunk costs – actual planning costs and price for development and delivery,  Infrastructure (new systems, IT, bandwidth, upgrades, platform requirements, delivery, etc,  Objective based cost reduction or revenue generation,  All elements contained within your project scope..The important thing to take away from all of this is that so long as your planning is accurate andif you understand the variables involved in determining costs, you can take the magic right out© Philip Herring 2011 Page 17
  • 18. of the process. You just have to be rigorous and uncompromising in pealing back all the layersof the “project onion”.An accurate cost model can be developed through involving your project members. Forecast thetime, resources, and sunk costs by using examples of similar courses, lessons and/or topics.Ask project team members to forecast their own hours and to provide a basis for the forecast.Use their forecasts as project planning elements so that they are motivated to control their owncostsEach of the variables listed below (interface, content and compression rates) should beconsidered when determining costs. In fact, to accurately determine the cost of an e-Learningprogram, it is important that you also understand the implications of each of these variables.And, it is highly likely that there are several additional variables that must be considered by yourdepartment or company. Create a check list of the big ones that you can share with yourproviders. This will help get you closer to creating an accurate costing methodology.If you need animation throughout the program, in a live interactive game play environment, youneed to be aware that interactive business game designers are vastly more expensive thanHTML programmers. And unless the programmers are also the owners do not expect the highend simulation wizards to work for HTML coder pay.Remember what we discussed in “Commoditization” and “Price vs. Cost”: ‘You get what you payfor” and “there ain’t no such thing as a free lunch”.InterfaceThis is straight forward. The more customized the interface the more costly. To mitigate costsuse templates where available and when they meet your needs. Better to pay a bit more forcustomized elements than to have to come back aftermarket to have them installed. Just thinkof buying options on a new car, the same principle holds true in developing e-learning.Aftermarket add-ons are more expensive and usually of lower quality than those from themanufacturer.ContentHow much of the program is based upon pre-existing content, what is the condition of the pre-existing materials and how much must be custom developed by your SME? The farther youmove toward custom development the higher the cost and slower the speed of development.© Philip Herring 2011 Page 18
  • 19. Compression RatesAnother major flaw in many cost computations is due to misapplied or overzealous applicationof compression rates. Compression rates are linked to the student’s level of familiarity with thematerial. You can forecast this but until the beta is taught do not bank on this number as it isvery much keyed to individual prior existing knowledge for which most organizations have nodata. Also, self assessments can be flawed due to individual’s tendencies to inflate their ownabilities when polled. The most accurate way to estimate compression rates is to test similar e-learning material your provider may have in order to set a baseline expectation tied to actualperformance data.Other major cost sensitive design elements  Interactivity requirements,,  Assessment requirements (pre course, intra topic, and post course),  Playback capability,  Systems integration (Web delivery and or LMS delivery),  Quality assurance, beta and go live testing,  Cost of project failure or required restart,  ROI based upon lower operational costs or revenue produced based upon your e- learning meeting its objectives.SummarySo, back to the original question; who is the best e-learning provider and how much will my e-learning program cost?I promised an easy answer so here it is: It will cost exactly as much as your budget will allow and will be based upon the training methods critical to supporting the learning styles of your audience, Creating an Excel spreadsheet that tracks multidimensional project costs is not difficult. It is very easy to graph your e-learning ROI vs. ILT programs by using the following formula: Total Cost = (Fixed Cost + Variable Cost) x Participant license cost where variable costs can be closely estimated by working with your provider and based upon the requirements you define.© Philip Herring 2011 Page 19
  • 20. AND The provider you choose will be the best suited for the job if you use them as a consultant, know your environment and requirements and do not allow them to sell you a commodity.Just remember to stick to your PMI based Project Management methodology, Six Sigma basedanalytics and quality control. And remember to peel back one layer of your project at a timewithout skipping anything just because there are a lot of elements to keep track of.After all, that is what we have technology for in the first place.References 1) The eLearning Guild (2002). The e-Learning Development Time Ratio Survey. http://www.elearningguild.com/pdf/1/time%20to%20develop%20Survey.pdf 2) George, T. & Mcgee, M. K. Educational Advantage. Information Week, March 10, 2003, pp. 57-58. 3) Klein, D. E., Mallory, C. A., & Safstrom, D. W. (1997). Analysis, design, and implementation of aweb-based trainning system for multi-criteriadecision support, integrating hypertext, multimedia-based case studies and training software. Montery, CA: Naval Postgraduate School. 4) Laird, Dugan (1985). Approaches To Training And Development (2nd ed.). Reading, MA: Addison-Wesley 5) Kirkpatrick, D. L. (1996). Great ideas revisited. Training & Development, 50(1), 54-59. 6) Kirkpatrick, D. L., & Kirkpatrick, J. D. (2006). Evaluating training programs: The four levels (3rd ed.). San Francisco: Berrett-Koehler. 7) Ainsworth, S. E., & Peevers, G. J. (2003). The Interaction between informational and computational properties of external representations on problem-solving and learning. In R. Altmann & D. Kirsch (Eds.), Proceedings of 25th Annual Conference of the Cognitive Science Society. 8) Baldwin, T.T, Ford, J.K (1988), Transfer of training: a review and directions for future research, Personnel Psychology, Vol. 41 pp.63-105. 9) Bassi, L. & McMurrer, D., (2007). Maximizing Your Return on People. Harvard Business Review, March 2007, Reprint R0703H. 10) Bassi, L., Gallager, A., & Schroer, E. (1996). The ASTD Training Data Book. Alexandria, VA: American Society for Training and Development. 11) 34:1 Chapman, B. and the staff of Brandon Hall Research (2007). LCMS Knowledgebase 2007: A Comparison of 30+ Enterprise Learning Content Management Systems. Published by Brandon Hall Research, Sunnyvale, CA. 12) 33:1 Chapman, B. Brandon Hall Research (2006). PowerPoint to E-Learning Development Tools: Comparative Analysis of 20 Leading Systems. Published by Brandon Hall Research, Sunnyvale, CA. 13) 750:1 Chapman, B. and Brandon Hall Research (2006). Online Simulations 2006: A Knowledgebase of 100+ Simulation Development Tools and Services. Published by Brandon Hall Research, Sunnyvale, CA. 14) Clark, Richard (2001). Learning from Media: Arguments, Analysis, and Evidence. Greenwich, Connecticut: Information Age Publishing. 15) Clark, Ruth, Chopeta, L. (2004). Graphics for Learning: Proven Guidelines for Planning, Designing, and Evaluating Visuals in Training Materials. Jossey-Bass/Pfeiffer. 16) Delahoussaye, M & Ellis, K. & Bolch, M. (2002). Measuring Corporate Smarts. Training Magazine, August 2002. Pp. 20-35. 17) The eLearning Guild. (2002). The e-Learning Development Time Ratio Survey. Retrieved 7,2008 from: http://www.elearningguild.com/pdf/1/time%20to%20develop%20Survey.pdf 18) Frei, B. & Mader, M. (2008). Perspective: The productivity paradox. C/Net News, 1/29/08. Retrieved 8/2008: http://news.cnet.com/The-productivity-paradox/2010-1022_3-6228144.html?part=rss&tag=2547-1_3-0- 5&subj=news.© Philip Herring 2011 Page 20
  • 21. 19) Georgenson, D. L. (1982). The Problem of Transfer Calls for Partnership. Training & Development Journal. Oct 82, Vol. 36 Issue 10, p75, 3p. 20) Keller, Fred (1968). Good Bye Teacher. Journal of Applied Behavior Analysis 21) Locke M. (1995). The transformation of IR? A cross national review. In, The Comparative Political Economy of IR. Wever K & Turner L Eds. IR Research Association: Champaign, Illinois. pp 18-19. 22) Marzano, Robert J. (1998). A Theory-Based Meta-Analysis of Research on Instruction. 23) McMurrer, D., Van Buren, M., & Woodwell, W., Jr. (2000). The 2000 ASTD State of the Industry Report. Alexandria, VA: American Society for Training & Development. 24) Pfeffer, Jeffery (1998). Human Equation. Boston: Harvard Business School Press. 25) Reeves, T. (2006). Do Generational Differences Matter in Instructional Design? University of Georgia, U.S. Department of Labor, Department of Educational Psychology and Instructional Technology: http://it.coe.uga.edu/itforum/Paper104/ReevesITForumJan08.pdf 26) Saks, A. M., & Belcourt, M. (2006). An investigation of training activities and transfer of training in organizations. Human Resource Management, Winter 2006, Vol. 45, No. 4, Pp. 629648 27) Shulman, L.S., and Grossman, P.L. (1988). Knowledge growth in teaching: A final report to the Spencer Foundation. Stanford, CA: Stanford University 28) Knowles, M. S. (1980). The modern practice of adult education: From pedagogy to andragogy. (2nd ed.) New York: Cambridge Books. 29) Knowles, M. S., Holton, E., & Swanson, A. (1998). The adult learner.(5th ed.). Houston: Gulf Publishing Company. 30) Gallacher, K. K. (1997). Supervision, mentoring, and coaching: Methods for supporting personnel develop paths of professional development. In P. J. Winton, J. A. McCollum, & C. Catlett (Eds.), Reforming personnel preparation in early intervention: Issues, models, and practical strategies (pp. 191- 214). Baltimore: Brookes 31) Trolley, E. (2006). Lies About Learning. Larry Israelite, ed. Baltimore, Maryland: ASTD 32) Twitchell, S., Holton, E., & Trott, J. (2000). Technical Training Evaluation Practices in the United States. Performance Improvement Quarterly, 13(3), 84-109. 33) Merriam, S., Caffarella, R., & Baumgartner, L. (2007). Learning in Adulthood (3rd ed.). San Francisco: John Wiley and Sons© Philip Herring 2011 Page 21