Budgeting for e-Learning Course Development

The most scientific methods of determining the price is to multiply the estimated project completion time by the costs and profit margin.
The direct development cost of the e-Learning courses involves the production cost. The total estimated expenditure of personnel time, materials, overhead, and profit becomes the bid price for the project, depicted by the following formula: Price = Cost + Profit

However, you will also need to factor other items into your budget such as:

• Software to run the e-learning (LMS or e-Learning system)
• Hardware for housing the e-learning software
• Associated training for the client
• Specialized programming for connecting e-learning software to existing human resource systems
• Any additional services or products you provide

Project Bid Prices
Based on Time and Resources involved — A mutually agreeable hourly rate for personnel is established and billed accordingly as the project continues. Expended materials and supplies are added to personnel charges. This approach is most desirable the scope of work is likely to change often during the life span of the project. While, this approach appears to be the fairest for conducting business with any customer.

Determining the Project Scope
Budgeting is built on project scope. None of the below-mentioned factors contribute solely to a project bid price.
There are several factors that can affect project scope and pricing:

Number and type of Learning Objectives — The assumption is that more objectives suggest more work and those instructional lessons for higher level objectives as categorized by Gagné and Bloom are more time consuming to prepare than lower level objectives. In this case, we establish fees for each type of objective based upon previous experience.

Number and types of interaction — Linear electronic page-turners are more easily constructed than lessons with abundant branching options.

Assessment requirements — The inclusion or exclusion of pretest, posttest, and embedded questions affects the complexity of a project. Also, true/false and multiple choice items are easier to create than drag/drop interactions.

Expected length of program — Often the project price is based upon a unit price per hour of instruction. The hourly rate varies depending upon the type of lesson requested. For example, a one-hour lesson dealing with learning facts and basic knowledge may price out at $3500, whereas a one-hour lesson dealing with a simulation of a complicated company process may be priced at $11,000. Generally the standard effort time required to develop 1 hr of e-learning course is 350 man hrs including the efforts of all related human resources such as Instructional Designers, Graphic Designers, Animators, Flash Developers, etc

Level of media integration — The type and amount of media used in a lesson affect the project price. Basic text is the least expensive; motion video is the most expensive. Animations are more expensive than static graphics, but static graphics are usually more expensive than clip art. The use of sound such as audio narration and special sound effects influences the project bid price.

Technical challenge — The technical requirements such as the authoring/ programming tools to be used, the delivery system, and any special requests certainly affect the personnel resources needed for a project.