This is one of the most common asked questions in elearning? How do you prepare a cost estimate for a piece of custom elearning? If you are a buyer of elearning what should you expect to pay for your elearning course and what information do you need to provide the supplier with?
Do you know what is involved in creating a cost proposal for a piece of custom elearning? Are you involved in sending tenders and quotes out to elearning developers and wonder why you often get such variances between the prices that you get back? There are some things that you can do to get a more accurate price and this article will help you get more accurate prices and also give you an insight into how much custom elearning courses cost.
It is because that so many of our customers come to us with such different prices for the same tender document that why we’ve decided to share our insight into how to get the best information back from your tenders and how people prepare a cost for custom elearning enquiries.
Just how much does custom elearning cost? There isn’t a stock answer to this question, each project will have a different cost as they are all different. Each client will have different requirements and developers will cost their projects in a different way, however there are factors that you can look at that will help you understand how much custom elearning courses cost and what you can do to get an accurate cost.
Let’s have a look at some of the information that help a supplier provide an estimate and also what you need to provide to get a accurate quote if you are look to develop a custom elearning course.
Set your budget
Set your project budget and understand what you need to cover within the project budget. Things that you might need to cover are development, training, maintenance and future changes.
Ensure that you have a clear understanding of the costs and any future costs when you set your budget. Make sure that you know who the budget holder is and can sign off the cheques! It is know good having a budget on paper that you can’t release.
It is a good idea to have some spare budget allocated in case you run into any issues on the project – this might be a content change that you hadn’t expect, technical issue or something unexpected. Better to have it and not use than to not have it and need it!
If you are working with a development company that are overseas make sure that you take into account any currency costs. You might find that the exchange changes and this affects your project budget. It might be an idea to agreed a fixed rate before the start of the project – also make sure you know who will be paying for any banking charges.
Do some research?
If this is the first time that you have developed a custom elearning course that take some time to do some research. Speak to some colleagues that have created a course to see what they learned on their project, speak to a few developers to understand what they process is and who they have worked with.
If you have a very specific content area that don’t be too surprised if you don’t find that you can’t find a developer who hasn’t worked in your content area. It doesn’t mean that they can’t create your course! You will need to provide access to a subject matter expert so that they can advise on your particular content. If you have quite a common content area then make sure that you really need the custom course, is there an off the shelf course available that might save you money?
Try and find out how much other people have paid for courses, start to understand how much custom courses cost. Each course will have a different cost but you will start to get an idea about the type of quality you get for the budget. If you have an idea for a particular course then you could speak to colleague or some developers to get an idea of cost. You might get a range of costs that will allow you to understand how much money and time you need to allocate.
If you are looking to develop an elearning course be realistic about your budget and what you will get for your money. Custom work in any industry takes time, involves review and is built to your specification – to have something that is built to your specification you need to be able to provide the funding to allow the developer to create it for you.
It is great to have an idea about the course that you want to develop but you need to make sure that you have the project budget to be able to develop it. If you are unsure then speak to some developers about your budget, you will quickly get an understanding about what you can achieve with the money that you have.
Think about your timeline – a huge budget might get people to work on your project but it might not get it completed in time. Think about when you really need to get your project completed and why is it need so urgently? Does it really need to be completed so quickly? Urgent rush jobs will cost more money as they will need more people on them all the time. You will pay a premium for the fast service. Think of it like DHL or UPS – they will get a package round the world almost next day but you will pay the top price!
Before you start the project make sure that you have done your research and documented your requirements. Speak to all of the people within your organisation about the project, make sure that you have all of the content that you need and ensure that this project is actually required.
Take some time to think about your project and what you want to achieve, who is the elearning course for, what is the audience, what is your budget, when do you need to complete the project for. If you want to be able to get an accurate cost then the more information you can provide the more accurate cost you will get back. If you have provided good information to the developer you should still expect for them to come back with some questions – in fact we’d want a developer to ask some questions. Don’t think that you’ve missed anything this is them trying to establish what you are trying to achieve in your project.
Have a look at our resource on elearning new course request form about some of the questions that you can ask before you start a new project. If you are a developer you can have a look at our questions before you start a new elearning project post over at elearningindustry.com.
If you have provided some really good details and you still get a good price then I’d go and find another developer to get another price…or I’d ask again!
Fixed or floating price
Before you start the project you need to agree the price with the client. You might agree a fixed price for the project or a floating price. If you have a fixed price then you will have agreed a price linked to a specification that won’t change. If you have a floating price then you will be paying an hourly rate to the developer until your course is completed. Regardless of the price model that you pick make sure that you are working with a specification and that you have enough money to complete the job.
Keep the reviews to a minimum
Reviews cost money. You might want to have reviews included in the project as a safeguard to make sure that everything is ok but this is one area where you can add a lot of money to your project. Review at the graphic stage, review at the script stage, review at the development stage and so on. Most developers will include a number of reviews in your contract (if you don’t then get them included). If you go over the agreed number of reviews then you will be paying for them and this will quickly starting adding to your budget. It is a good idea to agreed how much reviews cost and how much work outside the fixed price or specification will cost.
Quite often additional reviews happen because the project team hasn’t got together and collated their feedback or a senior manager who isn’t involved in the project ‘wants to have a look’ and then provides additional feedback. Good project management can reduce the amount of reviews and can keep your project costs down. When you are setting up your project specification and agreeing your project costs have a look to see how many reviews are included this is an area where you can increase or decrease your project cost.
You don’t always need to develop a custom elearning course but when you do there are some questions and steps that you can do through to help you get an accurate cost and proposal. Take some time to complete your research into what you actually need, think about the time that it will take the developer to prepare your cost. If you only want a quick cost make that clear to the development company. If you only send a two line email then you won’t get much detail back. If you are unsure about the procurement process have a look at the 10 rules of painless procurement.
Have you bought custom elearning courses? What do you do when you send a quote? What are the questions that you ask when trying to understand how much a custom elearning course will cost?