Here are a few strategies for developing cost-effective e-learning solutions that achieve solid business result.

Most large companies have embraced e-learning as a cost-effective method of delivering learning to an enterprise audience. However, business divisions with specialized needs and mid-size and small companies continue to face challenges in finding e-learning solutions to fit their scale and budget.

The good news: E-learning is becoming a mature market and prices have gone down to commodity levels. Technology platforms, tools, and courseware have evolved significantly in five years, so you can learn a great deal from peers that boldly went before you into the e-learning space.

The bad news: Your company may want to deploy an e-learning solution, but due to layoffs, travel restrictions, and deep budget cuts, you’ll have to fight for every penny and prove results. E-learning is counter-intuitive to executives because they’re not the audience for your solution, and many can’t imagine going online to do much more than check email.

Strategy 1: Demand pilots and prototypes--preferably for free

Always try before you buy. Most e-learning providers offer a trial period, however, the supplier may want to limit the trial period to a few weeks and availability to a small number of employees. It takes several months to get everyone on board and test the tool in real-life conditions. If you’re in a geographically dispersed or large decentralized company, you may need a larger test population and more time than they offer.

Plan your pilot to ensure success. As with any training solution, develop a project plan and define success criteria. Be sure to discuss these items with your supplier and stakeholders. Negotiate the amount of time you need, which could be several months to a year. If your supplier is unwilling to do this, find another one who will work as a business partner. If your pilot is structured well and the product performs, the money will follow.

Strategy 2: Avoid the LMS death march

Many e-learning initiatives fail because they start with an LMS selection process that lasts 12 months or longer, followed by either no funding or a 12-month implementation process. If you’re like most organizations, you don’t have that kind of time. IT is busy, and no one wants to approve big capital expenditures. You need to deliver now. Fortunately, you have several options.

·       If you’re just getting started, you may not need an LMS. If you’re buying off-the-shelf courseware or building a custom course with a supplier, the supplier may be able to host the courseware for you. Be sure to check with your IT group on data privacy issues, security policies, and ASP requirements.

·       If you’re developing a couple of courses internally, consider launching them from your internal Website or via CD-ROM. Be sure to include printable certificates as part of the course completion. This solution is “old school” and low-tech, but it definitely works when tracking is less critical and paper records are sufficient.

·       Find an LMS supplier that offers an ASP solution, in which your fees are based on annual volume. This is a more low-cost solution and implementation is typically four to eight weeks. As your e-learning model matures and your company requirements grow, you can move the courseware and data to an internal LMS. Look for companies that are strong integrators and offer a variety of courseware and services at affordable prices. With some providers, you can start with a US$50,000 to $100,000 investment. Use the RFP process to be an educated consumer and get the best service for the best price.

Strategy 3: Use YOUR buying model—not the supplier’s model

Unless you are buying very specialized industry-specific courses, off-the-shelf courseware is a commodity. Suppliers typically want to sell you large libraries, with licenses for all employees. First, do your homework. What are the specific learning needs of your audience and how many people will realistically use the courses? Does the content really meet the needs of the audience?

Pilot tests and supplier course comparisons are essential to selecting the right courseware for the company. Some courseware suppliers chunk content into many small courses, which can make it hard to compare content and prices. For example, one supplier may cover a technical subject area in a series of eight courses while another supplier has 15 courses to cover the same content. Keep this in mind when you compare courses and costs.

When it comes time to negotiate with the right supplier, buy only what you need with the understanding that more courses and licenses may be added. For instance, many suppliers offer attractive multi-year discounts, but you may find that you’re not able to exit the contract. Also ask whether you’re able to access courses in multiple languages at a reduced rate or no extra charge. Finally, make sure you can “switch out” some titles in your course library during the year--quarterly, if possible. You don’t want to be stuck with an obsolete or unused course when needs change or new technology emerges.

An emerging trend is e-learning purchasing consortiums, which help companies combine their buying power for better prices. If you go this path, be aware that the brokering company may make a profit off your purchase.

If you only have a few people who need e-learning courses, consider using a library card model. Some PC retailers offer individual unlimited use of libraries of high-quality courseware (mostly PC and IT skills) at a low price.

Strategy 4: Use RFPs and don’t ignore off-shore companies

Always start by defining your business needs and requirements. Do you really need an e-learning course? Sometimes a simple Website, virtual class, or online help will effectively aid learners when testing and reporting aren’t required. If developing a custom course is the best choice, many custom houses offer a variety of different capabilities and price points. And although it seems more attractive to use a local multimedia company, it can be a costly proposition that produces mediocre results.

Look for suppliers that specialize in your industry or subject area and can show you samples of their work. Do they have examples of other complex simulations they’ve built for others in your industry? Find out who your peers and competitors are using. Avoid companies that use proprietary authoring tools or require non-standard plug-ins and players. Most important, be sure to retain the rights to the content, and that maintenance won’t be costly over the projected life of the course.

Off-shore development, typically in Ireland and India, offers substantial savings due to differences in currencies and economies. Depending on the exchange rate, courses developed in Ireland cost about one third less than a comparable course built in the United States. India is currently the best bargain. A one-hour course that costs $20K in the United States can be built in India for about $5K-$6K. And many of these companies are already developing the off-the-shelf courses you might purchase. When looking at offshore companies, use the same high standards you would for a U.S.-based company. Make sure the people on your project have strong communication, instructional design, graphic design, and technical skills. Be aware that you need to play a stronger project management role if you select a company that will do the work virtually.

The RFP process should include asking for a no-cost prototype of your project. Your purchasing department, IT, and legal groups can help ensure that you’re getting the best price and the right terms for your company. If you don’t have all of these services internally, be sure to get legal and technical guidance from a reputable external source.