One of my LinkedIn contacts, Guy Tourigny at IBM, recently posted a response to a forum question about “How much does it cost to design elearning?” Guy gave an excellent response (click here) that echoed my own experience, and reminded me to post my own advice on some “rules of thumb” for the instructional design of classroom and elearning courseware.

Rule of Thumb #1 - Estimate 40 hours of work per hour of scripted classroom training.

A good estimate is between 30 and 40 hours of work to produce 1 hour of new classroom training. Guy mentioned a study that cited an average of 36 hours of work to produce 1 hour of training. Your design rates may vary, but if you work with a $100/hr consulting estimate, this would translate into a cost of $3,000 on the low end to $4,000 per classroom training hour on the high end. This is design time only, and does not include materials preparation or delivery costs. You can get instructional design time for less or for more, depending on your regional market and the type and quality of services you are buying. The $100 hourly rate typically applies to small practices and seasoned independent consultants.

Rule of Thumb #2 - Estimate 1 hour of eLearning to replace 3 hours of classroom training

The “compression rate” between Classroom and eLearning is about 3 to 1; meaning those 3 hours of classroom should translate to 1 hour of eLearning. One advantage of elearning is that the delivery costs are already sunk into the LMS and existing information architecture that the learners will be using. As Guy and others point out, the more people you train, the more the cost per learner is reduced. The thing about elearning is that it has greater up-front design costs because you have to script out and program the whole thing, without being able to rely on a skilled facilitator to adjust to real conditions in the classroom.

Rule of Thumb #3 - Pick between the three common eLearning quality levels to estimate price

WBT Level 1 – Basic WBT Course:
•Basic description is an online page turner to get information out. Some interactivity, but not very much by current standards. It includes elements like stock images, screen captures from computer applications, or client provided graphics.
•Interactive screens such as menus or hotspot reveal
•Stock flash animations and interactions included, but audio may be extra
•Includes end of course assessment with multiple choice or matching interactions
•End of course assessment could include, pooled, random, and/or weighted questions
•Estimated Price per hour of finished content range: $10,000 - $15,000 (estimates are based on courseware produced by a US Midwest Region small-to-midsized specialist firm, like LearningSim or Pixel Farm Interactive)

WBT Level 2 – Interactive WBT or Basic Simulation Course:
•All properties of WBT Level 1
•Includes audio (professional voice actors may cost more)
•Includes different types of flash animation and interactions 
•Can include branching simulations with multiple options (new 5-Step Simulations™ start here)
•Assessment includes additional interactivity with exercises and simulations, with additional interactions such as: drag/drop, essay / fill in the blank, and adaptive evaluation, if desired
•Estimated Price per hour of finished content range: $15,000 - $25,000

WBT Level 3 – Complex WBT Course or Full Simulation:
•All properties of WBT Level 2
•Includes advanced audio
•Includes advanced instructional strategies that promote interest and engagement, such as online games, simulations, blended real and virtual work designs, and “hyperlearning”
•Includes advanced flash interactivity and animations
•Assessment strategy is embedded in the learning and supports the learning strategy
•Estimated Price per hour of finished content range: $25,000 - $50,000

(Please note that these prices do not represent an official pricing policy or specific proposal terms. Prices always vary with the situation. These examples just highlight the three tiers and relative pricing. )

Rule of Thumb #4 - Estimate a 50-60% cost reduction for using existing material

If you are revising an old course or using content that already looks like you want it to look and will require only modest editing, then you can save time and cost. If you agree to use the designer’s customary templates (which will save him or her time), then you will also save on cost. For classroom training, if you can skip the step of creating a verbatim, detailed facilitator script, you can save a lot of time. Tip: Remember to ask your designer what kind of details you will get for the estimated price! If you need more than one review cycle, or need to get buy-in to the course content, methods, or other details, then you have to plan on additional time and cost that will bring you closer to the normal rules of thumb, even if you have existing material.

I hope these quick estimating guidelines are helpful to you in your learning and development projects!

–Steve