I’ll bet you’re not surprised to hear that the answer is “it depends”. Let’s look at a possible scenario. We’ll use as an example a growing company with 500 employees that needs an eLearning module on regulatory compliance that all employees must complete.
a custom content developer The three options they explore are to build it themselves, to purchase a generic library course at $20.00/learner or to have a custom content developer build a highly interactive course module just for them for the cost of $15,000. They reject the first option because they wisely recognize that they lack the skills and resources they need to do it well. So, for option two the math looks simple. 500 X $20= $10,000. Clearly less expensive than option three, right? Yes, for year one, but remember, we said that they are growing so let’s say they add 100 employees a year for the next 5 years. That’s an additional 500 and an additional $10,000. So now the total investment in the library course is $20,000 and growing each year. Meanwhile the custom content is still $15,000.
But “wait”, you say, “regulations change. The course will need to be updated” You are right but our experience has been that on average the changes, when they do come are quite small, costing less than $500 per update. So let’s say that over the course of the five years the module needs to be updated twice. So the total investment in the custom course is $16,000. They’re still ahead.
Now let’s say that all employees need to retake the module every two years. Hold on now, the math gets complicated:
|Year 1||500||$ 10,000||$ 15,000|
|Year 3||700||$ 14,000||$ 3,500|
|Year 5||900||$ 18,000||$ 3,500|
|Total||$ 42,000||$ 22,000|
So it looks like, in this case, things have tilted toward custom content from a price standpoint alone. (There are lots of other benefits to custom content but we’ll cover them elsewhere) I guess I should explain what the $3500 is under custom in years 3 and 5. That is the cost of refreshing the module. It’s more than just minor updates. It’s building a couple new interactions or a new scenario. It’s replacing a video message from the CEO. It’s that kind of thing. We surely don’t want people having to take exactly the same course over and over even if there are two years in between completion.
I admit that this is a simplistic scenario and there are a number of variables that are not accounted for. For example, most catalog providers offer sliding scales for usage and for length of contract. That said, I believe the point is a valid one. Custom content requires more upfront money but in many cases is less expensive over time.
If you liked this article you might also enjoy The road to eLearning hell is paved with great intentions, good content… and lousy delivery and The intangible Return On Investment of Custom e-Learning