Benefits of e-Learning (Part-II) : Reduce Cost of Infrastructure & Logistics

In the previous blog post about the debate on “Benefits of e-Learning,” I discussed how e-Learning can “Reduce Training Time by Half.” Today I wanted to discuss another very important aspect of training – the cost of infrastructure and logistics and how e-learning can help you reduce the same.

During our debate we made a list of requirements for conducting classroom-based training.

Cost of Conducting Classroom-Based Training

• Cost of maintaining training rooms: For any organization that conducts regular training, it is mandatory to maintain fully furnished training rooms at all the facilities where it needs to conduct training. The cost of hiring/maintaining a single training room can range from $5,000 to $20,000 (or even more) per year, depending on the location. The number of training rooms – and the costs –will increase as organization grows and spreads to new locations. Unfortunately, for a several days in a year, these trainings rooms will remain unutilized. (In G-Cube we have a similar experience with our training rooms.)
• Travel costs: Unless your organization is at a single location, with the trainer and the trainees all in the same facility, a significant amount of travel is required to bring the trainees and trainer together at a single location. If the training duration is more than one day (which is the case most of the times), the organization may also have to reimburse the cost of lodging, food and the daily allowance. According to our estimates, the logistics cost for one trainer can range from $400 to $600 per training (or more) depending on the location.
• Manpower costs: For conducting classroom training, organizations need to hire full-time or part-time trainers.  The cost of hiring a high quality trainer can range from few hundreds to thousands of dollars for a single training assignment.
• Loss of productivity: For classroom training, we must also consider the opportunity cost and resultant loss in productivity while the employees are out for training.

Organizations in past have tried to reduce some of these expenses by switching partially or completely to e-Learning.

Cost of implementing e-Learning

The various costs attached with development of e-Learning are as follows:

• Cost of development of e-Learning modules:  Organizations will have to engage an experienced e-Learning Development Company to develop modules to meet various training needs. This initial cost for one hour of e-Learning can range from $3,000 to $20,000 (per hour of seat time) depending upon the level of interactivity. If organizations opt for rapid authoring of the existing trainings, these costs can go down. A significant benefit is the reusability of the E-Learning modules –once created; they can be used again and again until there is change in the training content.
• Cost of managing LMS: Organizations will need to procure a platform to deliver and manage e-Learning courses.  Modern-day LMSs are highly user friendly and can be maintained by the existing L&D staff after a short training by the LMS vendor. With our experience of 100+ installations, the existing L&D staff becomes efficient in managing the LMS after a few hand-holding sessions.
• e-Learning support and maintenance: The e-Learning modules and the LMS will require a certain amount of support and maintenance. Most organizations that offer e-Learning can provide this.

Here is a comparison between classroom training delivery and e-learning on purely cost basis using a hypothetical scenario –

Organization Type: Insurance firm with offices across the country

You can you download Excel sheet for above analysis by clicking here.

Conclusion

If you play around with the above Analysis sheet, you will observe that e-learning can help you save significant costs when –

1. You have medium to large learner base to be trained. So for example, if 200 people are to be trained on a particular topic then e-learning would be the economical choice; however if only 20 people are to be trained then classroom training would be more cost effective in short to medium term.
2. Your learner base is geographically distributed
3. Duration of training is relatively small. For large duration trainings, such as a week long Induction program initial e-learning production cost can be quite substantial and you would reap economical benefits only in medium term.

Apart from cost savings, e-Learning also reduces management and reporting hassles – and automates the assessment effort, which provides valuable insights to L&D heads.

Note: This post is the second part of the debate on the benefits of e-Learning.  Read the first part here.