Just as questions of effectiveness often lead to comparisons of face-to-face and e-Learning delivery systems, so do questions concerning the economics of each. When considering cost comparisons, it is necessary to clearly distinguish between cost-efficiency and cost-effectiveness.
| Cost efficiency | is concerned with the cheapest way to accomplish a defined objective. |
| Cost effectiveness | is concerned with quantity of the output achieved for a given sum of money, but also with the quality of that output. |
Therefore, it is possible for a delivery system to be more cost efficient
than another, but less cost-effective when quality is concerned.
To calculate the projected net savings of one program over the other, Setaro (2001) offers a simple formula:
TCTP - TCNP = PNS
where TCTP equals the total administrative costs of the former
program, TCNP equals the total administrative costs of the new
program, and PNS equals the projected net savings.
When placed within the context of IRRI, the cost efficiency of e-Learning becomes clear. A different version of this e-Learning for Development course was offered in 2000 as a lecture-style, face-to-face course at the IRRI training center. Click the Calculate button below to compare the costs of that training course to this e-Learning offering.
To calculate the cost per student, use the formula:
TACT / number of students = CPS
where TACT equals the total administrative costs of training and CPS equals the cost per student. Again, within the context of IRRI and this course as it existed before and now:
|
Face-to-face offering
|
| $13,032 (TACT) / 11 (# of students) = $1,184.73 (CPS) |
As the calculator below shows, cost per student decreases dramatically;
from $1,184.73 to $280 per student:
This represents a big cost savings for IRRI. You will notice that we were able to accomodate far more students as well; 25 for the e-Learning course vs. 11 for the face-to-face course. Even if we only had 11 students in the e-Learning course, the cost per student would have come down to $636.36 from the face-to-face offering cost per student of $1,184.73.
To determine projected net savings in your context, type your own numbers
in the calculator fields and click Calculate.
Clearly, the e-Learning offering is far more cost efficient than the face-to-face course. Consider also that if IRRI were to offer this course again, the only costs would be those associated with the instructors' time. In other words, you would begin to realize economies of scale.
If IRRI were to offer the face-to-face course over and over again at
its headquarters, it would incur travel costs for participants each time
and the economies of scale would not be realized to the same extent. However,
while both of these calculations give an indication of cost efficiency,
they still do not capture the entire return on investment which must ultimately
consider the effectiveness of the training as determined through evaluation.
Only then can cost-effectiveness be compared.