Estimating the Cost of eLearning Projects by malj


									Estimating the Cost of
    eLearning Projects
    (Session 101)
         Mark Steiner

       San Francisco, CA
Wednesday, Nov 3, 2010 10:45 AM
            Session Agenda
–   Introductions                       – Assumptions
–   Session Approach                    – Estimation Types
–   Roles                               – Estimation Techniques/
–   Milestones & Deliverables             Spreadsheets
–   Writing and Responding to           – Pitfalls
    RFPs                                – Q&A

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                   Who am I?
– BS Industrial Tech. ‘88                  – Familiar with many
– MS Instructional Design ‘92                development tools
– 15+ years eLearning &                    – Presenter - eLearning
  interactive media dev.                     Confs. US & Europe
  experience                               – Started own eLearning
– Dozens of projects from 2 min.             consulting company in
  to 33 hours in runtime                     March 2001

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 In what sector do you work?
A. Corporate
B. Academic
C. Government/Municipality
D. Other

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         What is your role?
A. Project Manager
B. Instructional Designer
C. Developer
D. Other

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 What’s an Average Project?
A. $10,000 or less
B. $10,000 - $50,000
C. $50,000 - $100,000
D. Greater than $100,000

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          A Quote . . .

 All people who have turned out worth
anything have had the chief hand in their
                                             –Sir Walter Scott

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          Session Approach
I usually dislike when people say:
 “Oh, it’s an art.”
Art vs. Science: I’m going to attempt to
 identify as much of the science as I can.
Science = Process: Remember the Scientific
I’m a science / process person, therefore this
 session will have that sort of approach
Ummm . . . There’s still some art to it. ; )

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 Strategy                                Technology
   – eLearning Project Manager                 – Technical Architect
   – eLearning Strategist                      – Integration Specialist
 Content                                 Client
   –   Instructional Designer                  –   Buyer
   –   eLearning Programmer                    –   Acceptor
   –   Instructional Developer                 –   Project Manager
   –   Graphics                                –   Reviewer
   –   Media Specialist                        –   SME
   –   Training Administrator

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 Milestones and Deliverables
Needs Analysis
Design Document
Media Development
Course Alpha/Beta/Final
Other Services
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A Calculator Example

Comparing Traditional
Learning to eLearning


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              RFPs Poll
A. I’m not sure what RFP stands for.
B. I know what it stands for but have never
   written one.
C. I have written and/or responded to a few
   of them.
D. I have written and/or responded to many
   of them.

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                 Writing RFPs
 Carefully and succinctly define the problem
 Define the RFP process: Format, Protocol, Submission
  Requirements, etc.
 Determine key dates both in the RFP process and project
 Determine evaluation criteria, check for internal
  company/department requirements
 Get help (inside or outside) if needed
 If you can’t define the problem and are too vague,
  responding companies will have too little to go on, cause
  wide ranges of solutions and cost estimates. Perhaps
  consider changing the scope to only include analysis.

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      Writing RFPs:                  Sample RFP Outline
Administrative Section               Management Section
  Ground rules                         Project management plan
     Bidder’s conference               Delivery and acceptance
     Relevant dates                    Maintenance, Training, Documentation
  Proposal/submission format           Vendor qualifications and references
     Mandates a proposal outline     Price Section
     and pricing outline               Cost of building the application
  Evaluation Criteria                  Vendor software, third-party software
     Mandatory requirements            System hardware required
     Optional requirements             Project Management
Technical Section                      Installation
  Description of current situation     Maintenance, Training, Documentation
     Current technical environment   Appendices – Technical /Contract Info
     Current limitations               Current technical infrastructure
  Provide specific background          Corporate standards
     information                       Sample contract
  Provide specific examples            Non-disclosure agreements
  Description of proposed
  Make requirements functional
     in nature
       Responding To RFPs
Read the RFP very closely
Quickly determine Go/No Go status
Follow the RFPs prescribed process
Do any colleagues have experience with the
 company and/or RFPs?
Bidders meeting basics
My opinion: Unless you’re a large company
 and/or have an “In”, it's a hard way to go.

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       A Quote . . .

Good fences make good neighbors.
       –“Mending Wall,” by Robert Frost

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     Another Quote . . .

Problems that go away by themselves
       come back by themselves.
                                      –Marcy E. Davis

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   Documenting Assumptions
 Define *everything*              Travel
  that you can                     Project file formats
 Client Participation             Technical
 Central Point of                  Specifications
  Contact                          Duplication
 Review and validation            Revisions
  parameters                       Knowledge Transfer
 Delay penalties                  List and Define any
 Runtime                           other Risks and

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        Estimation Types:
        Time and Materials
Usually an initial estimation of cost is given
 in a range (between $X and $Y)
Risk is minimized for vendor
Client only pays for hours worked
Profit built into rate structure
My advice: If possible, always pitch analysis
 as initial step.

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   Estimate Types: Fixed Cost
 Key Point: Fixed cost does not mean the cost can never
  change. It means that the cost is fixed to a scope. If the
  scope changes, so should the cost.
 It also assumes the scope is definable, so then the cost
  can be fixed (linked) to the defined scope.
 Risk is built into price. Add 15 – 40%
 Why are there so many neon lights & fine hotels in Vegas?
 When, then?
   – Client requirement
   – Repeated, consistent, well-defined project(s)
   – Sometimes Vegas pays out big buck$.

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     Another Quote . . .

Whenever things sound easy, it turns out
    there’s one part you didn’t hear.
                                    –Donald E. Westlake

   Dig the well before you are thirsty.
                                         –Chinese proverb

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             Development Ratios
 Level 1 eLearning (Basic) – Including content pages, text, graphics, perhaps
  simple audio, perhaps simple video, test questions.
 49:1 - eLearning output, Rapid Development, Simple Content, Specialized
  Authoring Tools
 79:1 – eLearning output, Most typical (average) Level 1 eLearning Content
 125:1 - eLearning output, Complex projects, difficult to produce, more media
 Level 2 eLearning (Interactive) – Level 1 eLearning content plus 25% (or
  more) interactive exercises, virtual “try it” exercises, liberal use of multimedia
 127:1 – eLearning output, Rapid development through templated interactions,
  simple animation, efficient or low-end media production
 184:1 – eLearning output, Most typical (average) Level 2 projects
 267:1 – eLearning output, advanced and custom interactions, embedded
  simulation activities and lots of media
 Level 3 eLearning (Advanced) - Highly interactive, possibly simulation or
  serious game-based, use of avatars, custom interactions, award-winning caliber
 217:1 – eLearning output, templated interactions, templated games and
  simulations, efficient simulation development practices (rapid development)
 490:1 – eLearning output, Most typical (average) Level 3 projects
 716:1 – eLearning output, complex projects, advanced learning simulations and
  games, extensive media production
                          Source Citation: Chapman, B. (2010). How Long Does it Take to
                          Create Learning? [Research Study]. Published by Chapman Alliance
     Estimation Techniques
Estimating Via Key Categories
Estimating Via Run Time and Screens
Estimating Via Detailed Screen Information
Filling in the Details

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        Estimating Via Key
Technical Complexities
Media Richness

             Launch Calculator

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    Estimating via Run Time
         and Screens
What’s an hour?
30-50 Screens per hour
Based on mix of interactivity/screen type
10-30 seconds for text-only screen
1-1.5 minutes for MC questions

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      Estimating Via Detailed
        Screen Information
Occasionally, the detailed Design Document is
 already complete.
Similar to Run Time, except for amount of info
 available. Analysis is finished-maybe.
Less art, more science
Build a matrix that contains all screen/ interaction
 types. Assign a cost factor to each.
Apply metrics to content to determine cost

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       Filling in the Details
A Spreadsheet via Roles
A Spreadsheet via Process and Roles
Using Microsoft Project

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      Client Communication
        Establishing Value
Not to be a marketing weasel, but define
 and communicate your Value Proposition.
But . . . find and use your own words.
Leverage the situation so that it would be
 foolish and risky for the client *not* to heed
 your advice.
If the former is not possible, perhaps it's not
 a project you should undertake.

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     Another Quote . . .

Smooth seas do not make skillful sailors.
                                             –African proverb

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                Pitfalls List
Unclear scope
Scope creep
Unclear client/vendor roles
No single point of contact with client/vendor
Ill-defined system specifications
Hours allocated to a task not sufficiently
 dissected/broken down
Lack sufficient skill base to complete a project

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          Final Quote . . .

He who is afraid to ask is afraid of learning.
                                                – Danish proverb

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         Contact Information
Mark Steiner
Chicago, IL

See examples of eLearning Calculators, Reusable
   Learning Objects, related links, past conference
   slides and materials, and other information at:
Click on Resources

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Thank you

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