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11008 - How to Estimate Courseware Costs (29 November 1999)

by - Joseph Ganci

I'm in charge of a large Head Start program that serves about 8,500 young children through 90 centers in 12 states along the east coast. We are now exploring the possibility of delivering some of our training packages through CD Rom. I'm presently writing the proposal to top management and need some data.

Here are the questions: 1. How long it usually takes for your company to develop a CD Rom? Do you estimate time by number of screens, interactivity per screen, or how?
2. How do you price CD Rom development?
3. What would be the "rule of thumb" for CD Rom development pricing? What is its overall cost? What impacts the price?
Thank you in advance for your help. I REALLY appreciate it. I will contact you later and inform you about what happened. Perhaps we will have to talk business!

You've hit the holy grail of interactive multimedia - how to price something correctly. This has made grown men weep and the commanders of armies tremble in fear. Ah, well, let's try anyway.

The industry average "seat time" for students taking CD-ROM based CBT is about two "screens" per minute. A screen is defined as a clear event change, but knowing a screen lasts about 30 seconds will help you to compartmentalize your courseware in order to price it.

To price it, you have to take into account several factors, as you've noted. Are you doing everything from soup to nuts, just the programming, or just the design, etc.? Are you including interactivity on every screen, every 5 screens, etc.? How many of each kind of interaction are you including (drag-drop, multiple-choice, simulation)? Do you have video, audio, etc., and are you responsible for each?

The more interactive you make something, the higher the design and development costs. The more audio and especially video you include, the more it costs as well. How much more?

Well, figure an advanced Authorware user can normally develop a simple screen in about an hour, when you include debug and review time. Novices might need 2 or more, and will end up with less than maintainable code. This means basically the old adage you get what you pay for. When possible, and this is what I do, balance advanced users with intermediate and novice users, giving each what they can handle on the project. This way, you end up with the lowest cost possible (assuming of course that your novices cost you less than your experts) and it gives everyone a chance to learn more without feeling pressured or frustrated.

To price video and audio, you'll have to weigh in the cost of the talent, the staff, the studio time, the equipment, etc.

For interactivity, figure that a t/f or m/c question will add about 1/2 hour to each screen, especially if you are using data tracking. For drag drop and simulation, look at 1 1/2 hours or so.

The cost of an hour of courseware can vary widely based on the above and also based on the number of hours you are creating. If you only create one hour, ALL of your startup costs and setup time, which can be considerable, have to be swallowed by the one hour. If you have 100 hours, those costs can be amortized over the cost of the project.

So for a one hour app, I've seen the price range from $20K to over $100K, depending on the complexity. For 20 hours, I've seen the price range from $12K per hour to $40K per hour. Prices can be lower if there isn't too much interactivity or media.

I've estimated a bit high on the hours needed for different course elements. This is because you always need to be ready for Murphy and for small client change requests. It usually works out correctly in the end where you are making a normal, decent profit, and your client is getting his or her money's worth.

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