A colleague in the class asked about the cost associated with my computer mediated instruction program example from the main discussion board. The program cost $75,000 which in my world of CME and a national program to educate thousands of people over a one year time span is not very expensive at all (in fact it's positively cheap!). I responded with a few more details on what was included in the budget, and this made me think even more about this issue.
I deal with budgets all the time in my "day job" where I am responsible for creating and costing out new and recurring programs, then obtaining the grant funding to run the programs. This means that I take for granted many concepts that I realize not everyone may have experience with. The issue of budget is especially important in DE since there is the assumption that DE is automatically cheaper than F2F education. Chapter 4 in the text Delivering Digitally (not required reading but I read it anyway since I deal with these issues all the time) talked about how to identify whether a DE course will provide savings or not. One of the main issues is fixed costs versus variable costs. If the fixed costs are high and the variable costs are low, then there is likely to be savings from DE (scalability). If the variable costs are high, then savings from DE are less likely.
This makes sense to me and illustrates my own organization's DE example I used in the class discussion board. Yes, the fixed costs are fairly high (highly educated staff and expert faculty equal high content development costs), but the variable costs are extremely low. It costs no more to have 1,000 people complete this activity than it does to have 100 people complete it (there's the scalability). So this DE actually gets cheaper the more people participate in it. And this is the point I made about the funders of this activity. They are looking at the high initial cost of $75K across the 1,000 and likely many more participants (likely more since we reached 560 completers in one month).
My colleague pointed out that $75K is a lot of money say for a program to train K-12 educators. So the challenge here is to think of fixed and variable costs again. How do they compare? Once we know that, THEN we will know if $75K is "a lot of money" or not. Of course for regular people, yes $75K is a lot of money--no argument from me on that! But we're talking about organizations and institutions and far-ranging DE programs. And in that context, we cannot automatically assume that $75K is a lot.
This issue of cost is the "hidden world" of DE (or any E!)--and an important issue in course design too. For institutions to invest in DE, then they surely want to design courses/programs that minimize the variable costs in order to recoup their investment and cover costs, and if a for-profit institution, then bring in some margin too.
Please share your thoughts and experience on these costs and budget issues.
Dierdre:
ReplyDeleteI really appreciate how you broke down the costs and the ROI argument for DE. I think what it really comes down to is how many "repeats" of the DE course the client is looking to run. If they're looking to run the course multiple times, then the lower fixed costs of DE make it much less expensive. If they're looking to run the course only once, then it doesn't make sense to develop it in DE since the initial development costs are much higher than a F2F course.
-Kristen Ayres
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ReplyDeleteI agree with Kristen's comments. The authors use the term "shelf life" to get at the same concept. My guess would be that CME programs have a short shelf life, so you probably don't assume that a course will continue into year three or four. It may be hard in other fields do gauge shelf life, whether at the beginning or even after a year or two of repeats.
ReplyDeleteKristen and JD, you raise excellent points about "shelf life" and planned repetition of a program. My example is a program that is an archived webcast so it will "live" on a web site (and in a smartphone app) for a year, while the information is still clinically valid. We never plan for anything to go any longer than one year due to the changing nature of oncology research and treatment.
ReplyDeleteDue to this short shelf-life, we must invest a fair amount of the program budget in advertising/audience generation. We put about $15,000 in the budget of this program for promotion--to be spread over the entire year of the activity life, to be sure, but still a fair amount of money and 20% of the total budget.