The cost of LMS can be quite expensive. There are several factors that must be taken into consideration when deciding to purchase a Learning Management System or build one. The first step in cost-benefit analysis is simply to measure all of the direct and indirect costs involved in design, development, delivery, and maintenance of the program (Kruse, 2004). Determining what is needed will aid in deciding which option to choose.
Assumptions and baseline data is the first thing that needs to be determined in developing an e-learning environment. The assumptions are like a business plan checklist; including the life span of course, total number of students, student learning time in class, reduction of seat time, burdened compensation for instructor, and burdened compensation for student (Kruse, 2004). Upon completing the assumptions, the next step is determining the design and development cost, which can range from $59,560 for instructor led training to $350,000 for asynchronous e-learning (Kruse, 2004). Delivery cost is the third phase of comparison; with cost for instructor led training costing at over $1 million, where as, technology based training costs around $134,400. The fourth phase is determining administration and maintenance costs. The fifth and final phase is total cost comparison. Instructor led training can cost up to $1, 091,648 compared to $500,600 for technology based training (Kruse, 2004).
The cost of maintaining an e-learning environment is nothing to sneeze at. Depending on how large a company is, it may be more cost effective to purchase a LMS as opposed to building one. Once the comparison has been made it is easier to determine which choice is appropriate. It all comes down to, "How much are you willing to spend?"
Source:
Kruse, K. (2004). Measuring the total cost of e-learning. Articles. Retrieved July 18, 2010 from e-learningguru.com
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