We explore the hidden costs of buying off-the-shelf e-learning – and the ways in which cloud technology can transform the way companies purchase e-learning – lowering their TCO and improving their ROI. As learning management systems (and virtual learning environments) have become both more affordable and easier to use, many companies are implementing their own LMS - instead of buying all-encompassing e-learning libraries with an LMS included. While this gives organisations a far greater choice of courses – since they're not locked into a single vendor – an important question remains. Do traditional licensing models really deliver value for money? Cloud technology has changed how courses can be delivered (and tracked) so it is no longer necessary to purchase licenses for all of a workforce. This presentation explores how cloud technology enables organisations to purchase and monitor take-up of their workforce training more efficiently, lowering costs as they do so. Find out more at www.course-source.net

1. Ken Wood
Course-Source
The Hidden Costs of Sourcing
e-Learning for your LMS

2. Alternative Title
Are you getting value for money from
off-the-shelf e-learning?

3. Why buy off-the-shelf?
• Low (or no) resource to create own courses
• Better quality – more interactivity
• Instant delivery
• Wide range of subjects in library

4. Why create your own?
• When off-the-shelf not available
• No “hard” cost (if developed in house)
• No annual fee
• Need to “own” the course for commercial
reasons
• Getting easier to build own interactive
courses with modern tools

5. Predictions
• The biggest competitor to most publishers will be
companies creating their own courses
• Publishers will need to adapt and embrace
customers doing their own editing and
customising, especially for “generic” courses.
• More specialist (niche) publishers

6. What are the costs of off-the-shelf?
• Finding
• Evaluating
• Uploading
• Licenses

7. “Soft” Costs
• Time spent searching for courses
• Contacting publishers to get pricing and full
evaluations
• Being chased by publishers after contact
• Working out different pricing models
• Whole process can take weeks
• Time to upload and test large course files

8. Rise of the Marketplace
• Amazon
• Learndirect, e-Learning Marketplace, Training
Post and many more
• Often have limited “try before buy” but not full
evaluations.
• Mainly B2C using e-commerce
• Can compare pricing but mostly on single courses
• Volume pricing hidden and varies greatly

9. License Costs
• Most OTS courses sold on a per-user basis.
• Calculated from total number of users and
number of courses being licensed, i.e. a
traditional site license.
• Until recently, only way if customer has own LMS
• Good deal if every user actually takes several
courses.

10. What is the true cost?
Case Study
• Company X has 350 staff
• Pays approx £7,000 (per year) for a library of 80
courses.
• At end of year out only 56 people have accessed
any course with 78 “enrolments” in total.
• Cost per user per course (enrolment) was £89!
Sound familiar?

11. Cloud Technology
• With SCORM, courses used to have to reside on
same server as LMS.
• New technology means courses stay on central
(cloud) servers using a small “connector” that is
uploaded to LMS as if it was local.
• Course is tracked centrally and by LMS enabling
remote control of licenses.
• If a course is updated centrally, all users
accessing it instantly get new version.

12. Ski Pass
• Old system was printed “pass”
• Now electronic card that gets read at lift with all data
stored centrally
• Can buy passes online
and assign to card
• But business/pricing
model hasn’t changed!
• What alternatives to
the traditional model
can you come up with?

13. Alternative pricing models for OTS
Cloud based delivery (and tracking) is a game
changer that makes possible:
– Charging for time actually
spent in courses
– A “behind the bar” model
that buys a discount and
whenever an enrolment is made it draws
down from the deposit
– Enrolment based pricing

14. Enrolment Based Pricing
• Pre-pay for X “enrolments”,
discounted for volume
• Each enrolment lasts 3 months from
first access.
• Only counts down when user first
accesses the course.
• Could be adapted to only count
down on course completion.
Enrolments (for
illustrative purposes only)
20-49 £17 ea
50-99 £14 ea
100-249 £12 ea
250-499 £10 ea
500-999 £8 ea
1000-2499 £6 ea
2500+ £5 ea

15. Questions and Discussion
kwood@course-source.net
http://www.course-source.net
Stand 32