Paul T. Walliker from Caterpillar University has an interesting article on Learning Circuits blog about the relative cost of instructor-led vs. e-learning. Caterpillar University has constructed a mathematical model based on key cost components:
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Course Development costs: Caterpillar uses a 3:1 ratio between instructor-led training and e-learning development time.
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Salaries
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Time Required to Prepare for and Conclude each class
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The cost of Instructional Material
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Allocated cost of classroom
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Learner Opportunity Cost: E-Learning covers the same material in half the time.
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Instructional Efficiency: "Gained Knowledge or Skill/All Information Delivered". Elearning allows the user to skip material they already know therefore it is more efficient.
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Learning Velocity: How quickly a program can be delivered across an organization,
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Timeliness
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Consistency
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Ease of Updating Material
The key finding for Caterpillar University is that when similar programs are compared, e-learning is less expensive to deliver for learning populations as small as 100 people.
Do I agree with their conclusions? I like that they have come up with an organized methodology that considers a lot of the relevant factors. Caterpillar already has the technology infrastructure in place (Learning Management Solutions, software for developing the material, and developers with the skill to use the software)--every company doesn't. Also, I think the type of material to be delivered is important. E-learning is not effective for every type of learning. That is one of the reasons we still do Instructor Led Training, E-learning and Blended learning.
http://www.learningcircuits.org/2005/jun2005/walliker.htm