Winning an e-learning proposal or grant has become more difficult over the past few years because of the initially high expectations of e-learning and the subsequent disappointment in the financial results. Effective grant and proposal writers need to understand the business of e-learning and address apprehension and fears of the grantee to successfully win the opportunity to develop e-learning in corporate and academic settings. When e-learning initially burst onto the scene, the promise of untold riches was almost too much. E-learning was going to revolutionize traditional universities while simultaneously pouring millions and millions of dollars into the schools’ coffers. Dozens of major universities rapidly started to develop e-learning “branches”—many of them in partnership with private organizations. These institutions actively recruited faculty to write courses, hired instructional designers to put the courses online, and undertook large public relations efforts to market the online courses. After a few years, these universities began closing their virtual doors. The reality was that online universities failed to make a profit. They were expensive to create and revenues did not match expenditures. The dream of untold riches was just that—a dream. Students did not flock to login to e-learning courses as hoped. As an example, the E-university in the United Kingdom estimated a target student body of over 5,000 online learners; they could recruit no more than 900 (MacLeod, 2004).
While e-learning never took off as promised, it continues to have a tremendous impact on colleges, universities, and corporations. Almost half of all universities and colleges in the United States provide some form of education online, and as many as 33% use the Internet as part of a course (Horton, 2000). Additionally, the American Society of Training and Development (ASTD) estimates that corporate use of e-learning is steadily increasing (Galvin, 2003).
While e-learning continues to gain ground, one obstacle to growth is its high development costs. Developing a course can range from $30,000-$40,000 per one hour of completed Web-based training (Kruse & Keil, 2000). A Learning Management System (LMS) like SumTotal Systems, Saba, Blackboard, or eCollege can cost as much as $250,000 to $850,000 per year, depending on the size of the organization (Chapman, 2004; Vaas, 2002). Even when the vendor hosts the e-learning platform on its own server, it can cost as much as $10,000 a year or more (Kiser, 2002). Cost has limited the use of e-learning in 39% of all organizations (Hequet, 2003).
The main reason for the high development cost is the need for an entire development team. Developing instructor-led, classroom training typically involves one person. That person does the research on the topic by either interviewing a Subject Matter Expert or finding the necessary information in the literature. He or she then writes and delivers the course.
In sharp contrast, building e-learning requires a team. The team usually includes a project manager, a technology specialist, and an instructional designer (Morrison, Ross, & Kemp, 2001; Shackelford, 2002). All of these individuals are usually highly skilled and have high hourly rates.
Compounding the problem is that while the costs are high, so is the risk of failure. Many institutions have learned the hard way that making the wrong e-learning investment is costly. Here is a brief list of failed e-learning ventures: