Budget Blues: Get it Right the First Time
By Rick Nigol
 This is the time of year that
people may be faced with drafting budgets for their eLearning
initiatives. A key challenge is that they may have not completed
any significant eLearning to date, and therefore are a bit in the
dark on how to go about budgeting.
eLearning differs from face-to-face learning in
that it is new and therefore involves new fixed costs. But over
time, successful eLearning more than recoups these initial costs
because it is far more cost effective than face-to-face at
reaching people and greatly saves on their time. So the budgetary
trade-off is between relatively high costs today to produce better
and lower cost access over time.
We always advocate a conservative and
controlled approach to budgeting; conservative in that the
projected returns are likely to be realized, and controlled in the
sense that the budget is manageable. Anyone can fill in a
spreadsheet and generate a theoretical return, but the actual
return is determined by how you manage eLearning, not how you
filled out the spreadsheet.
It makes sense, therefore, to start with what
you know and budget from there. You might already have a budget
for some classroom learning that could be delivered more
economically online. Or you could see a portion of your training
budget as being like research and development where you pilot an
approach to eLearning. There is no one way of doing eLearning and
the real value is how it is customized to generate a measurable
benefit in your context.
The biggest mistake that we see in budgeting
for eLearning is a matter of sequence. There is a tendency to
purchase the eLearning tools before one has a clear idea of what
they want to do with the tools. People end up with tools that they
don't use effectively and this has the effect of wasting resources
while not generating the concrete experience that might serve as
the basis for future budget estimates. It's a little bit like
starting to build a house before you have poured the
foundation.
It makes more sense to budget a bit of time up
front to figure out how your eLearning will make an impact and
then to develop the eLearning product. As the saying goes, time is
money. But if you don't spend a bit of time building the
foundation, you are more likely to waste money, which has the
effect of reducing the budget available for eLearning over time.
(We hear: "eLearning doesn't work," which is code for "We don't
budget for it because we had a bad experience."). Theoretical ROI
calculations will never replace real metrics based on real
experience as a basis for budgeting.
Rick
Nigol is Co-Founder and Director
of Education for eLearn Campus.
| 
