The eWyse Approach To Cost Calculation
Our clients sometimes do not take into account all the factors that influence the true cost of implementing and deploying eLearning. Instead, they are simply looking for a quotation based on the duration of their intended final product. A very common question we receive is: how much does one hour of eLearning cost? Or, we plan to have six 15-minute modules for our onboarding purposes. Can you give us a quote?
But this approach leaves out important factors, such as:
- Level of interactivity and complexity in eLearning development
- The exact volume of the “raw” knowledge that needs to be transferred into eLearning
At eWyse, we’ve developed a more accurate cost calculation model that takes the most relevant factors into account.
Rather than basing our calculation on the duration of the course, we estimate according to raw materials—for example, the number of PowerPoint slides our client provides as the basis for their course. We then use our tried-and-tested timelines to calculate the number of hours it will take our team to develop, design, animate and deploy the course.
Raw material can be provided in several different forms such as Word/PDF text documents, video recorded live workshop lessons, pre-recorded webinars, etc. For each form, eWyse has a unique formula for the calculation. In this example, we will cover the most used form—PPT “raw” materials.
Let’s zoom in a little.
For our transparent and straightforward equation, we use the following information:
- The number of PowerPoint streams the client is providing, aka “raw” materials
- An additional 30% (+30%) based on information received in “raw” PPT material. It includes all intro-outro screens and allows for creating extra screens to accommodate content-heavy PPT slides, branching scenarios, etc.
The average time it takes our team to complete one finished eLearning screen/scene in the most common Level of interactivity/complexity – Level 3** is 2.5 hours in total:
- Learning Architects: 1 hour per stream
- Instructional Designers: 1.5 hours per stream
- 2.5 hours altogether
- Agency hourly rate
The final equation ends up looking something like this:
(PowerPoint Streams + 30%) x 2.5 hours x hourly rate = budget estimate
** There are different levels of interactivity and multimedia complexity when it comes to eLearning development. The most common gradation is in levels. Level 1, 2, 3 & 4.
Level 1 is the simplest. It looks mostly like a standard PPT deck with simply click-next functions, while Level 4 is the most complex level with all the possible bells and whistles. You can find detailed explanations about the levels of eLearning development in our infographics.
The number we need here is the number of hours needed for the development for each specific level:
- Level 1 – 0.67 (40 min) hour per finished screen/scene
- Level 2 – 1.5 hours per finished screen/scene
- Level 3 – 2.5 hours per finished screen/scene
- Level 4 – 3 hours per finished screen/scene
This is an equation that makes total logical sense. Let’s take Level 3 as the most common level. If we know that one PowerPoint stream takes our team an average of 2.5 hours (Level 3) to process, then it follows that 2.5 hours multiplied by the number of streams would give an accurate estimate of the total hours required.
The eWyse Equation In Practice
Let’s take this equation for a test drive. Imagine your company is outsourcing the eLearning course creation. You have 15 PowerPoint streams in your raw materials, and you want to outsource the entire architectural and design process.
If our hypothetical hourly rate was a round number of $100, here’s how the calculation would look based on the levels of interactivity and multimedia complexity:
- Level 1 (15 + 30%) x 0.67 hours (40 min) x $100 = 19.5 x 0.67 x $100 = $1,306.50
- Level 2 (15 + 30%) x 1.5 hours x $100 = 19.5 x 1.5 x $100 = $2,925,00
- Level 3 (15 + 30%) x 2.5 hours x $100 = 19.5 x 2.5 x $100 = $4,875,00
- Level 4 (15 + 30%) x 3 hours x $100 = 19.5 x 3 x $100 = $5,850,00
Of course, in order for this calculation to hold any merit, you’d have to trust that we’ve crunched our numbers properly—but rest assured that all of these figures have been rigorously tested. Our clients continually express that it’s an incredibly accurate estimation of the cost to develop their eLearning courses.
Tips For Using Our eLearning Cost Calculator
The eWyse calculator isn’t set in stone. If you aren’t creating your course through an outsourced agency, you can simply remove the hourly rate component in order to estimate the total hours it will take your team to complete the eLearning course.
Here are a few tips to make the most of our calculation:
- Make sure you include the 30% for intro-outro, and also allow for the creation of extra screens to accommodate content-heavy PPT slides, branching scenarios, etc.)
- If you’re not sure about the number of PowerPoint streams your course will require, err on the side of caution and add an extra 10–15%.
- We’ve based the calculations in the above-mentioned example on PowerPoint slides because they make up roughly 80% of the raw content we receive from our clients. If you’re working with Word/PDF documents, don’t worry—there is also a formula for that calculation, that is only a bit different.
Don’t forget that this calculator is purely for the creation of your eLearning course. There are many other things to take into account when estimating the overall cost of eLearning and onboarding in total, as we’ve covered in the previous articles.
Download the eBook Get Fully Ramped In Record Time: Your Guide To Boost Employee Onboarding ROI to onboard with ease and stretch your L&D resources. You’ll discover how to not only create a budget but stick to it by leveraging the right outsourcing partner and proven strategies. You can also join the webinar to learn the secrets of how to fully ramp in a flash.