Author: Ing. Luis D. Arguello, MPM.
The first step towards managing your eLearning project's finances is to define its budget and the budget's control process. It can be summarized as follows:
 Step 1: List the project´s financial expenses
The first step when defining a financial plan and setting a project's budget, is to identify all of the different expenses that are likely to be incurred throughout its lifecycle. Typically, most eLearning projects spend the majority of their budget on labor but may also include purchasing, leasing, renting or contracting resources. Word of advice: take into account the TCO (Total Cost of Ownership). This TCO takes into account not only the initial development cost, but also maintenance and updates through the useful life of the project.
Step 2: Quantify the financial expenses
Once you have identified a detailed list of the project's expenses throughout its life cycle, the next step is to forecast the unit cost of each expense type listed. The unit cost is the rate of a single unit of a particular item. For instance, the unit cost for labor may be calculated as the price per hour supplied.
Now that you have gone through steps 1 and 2 listed above and you have forecasted the total amount of people, materials and other expenses needed to develop the eLearning project, you have defined the its budget. A best practice will be to find back up funding. This is additional funding that, if needed, can be used to deliver the project.
Step 3: Develop schedule of expenditures
The expense schedule enables the project manager to calculate the total cost of undertaking the project on a daily, weekly or monthly basis. You can calculate it, based on your project's particular needs. This step consists on figuring out when the expenses will take place during the project´s timeline. By doing so, you can get an overview of your project´s cash flow, which tells you the amount of money you need at a given period of time during the its length.
Step 4: Define the financial tracking process
Now that you have an expenses schedule, you will need to define a process for monitoring and controlling it. This step is oriented to develop the mechanism that will track every expense, hopefully, on a periodic basis. If you can get your team to wait until an expense is approved before incurring in it, then you can control each expense more easily. In order to track the team´s operating cost, you will need to assign an hourly rate for each team member. The total amount charged for the hours undertaken by those resources must be shown in your schedule.
Step 5: Track and manage
Track, in real time (highly desirable) work effort accomplished versus your schedule. If you find that you are starting to spend more than you have budgeted, analyze the options you have to stay within budget:
Cash flow management requires you to always have enough funds available to cover your spending over the months ahead and track your spending at least every week.
SHIFT and your eLearning project's budget
How can SHIFT help you manage your eLearning project's budget? At first, as a project manager you might think SHIFT is devoted to help instructional designers do their jobs better. However, SHIFT includes tools that will help you keep your project under budget:
-SHIFT will give you visibility for the whole development process.
-SHIFT will dramatically reduce your TCO (Total Cost of Ownership), driving down the variability in maintenance and update costs to manageable and predictable level: no hidden maintenance costs.
-SHIFT allows you to assign tasks to different team members of your project and keep track of their progress within development environment. You will also keep track of the status of each task (really helpful in closing up all pending items before publishing a course).
-SHIFT will give you real time status on each piece of work to be done in order to finish your project on time and on budget.
The first step towards managing your eLearning project's finances is to define its budget and the budget's control process. It can be summarized as follows:
 Step 1: List the project´s financial expenses
The first step when defining a financial plan and setting a project's budget, is to identify all of the different expenses that are likely to be incurred throughout its lifecycle. Typically, most eLearning projects spend the majority of their budget on labor but may also include purchasing, leasing, renting or contracting resources. Word of advice: take into account the TCO (Total Cost of Ownership). This TCO takes into account not only the initial development cost, but also maintenance and updates through the useful life of the project.
Step 2: Quantify the financial expenses
Once you have identified a detailed list of the project's expenses throughout its life cycle, the next step is to forecast the unit cost of each expense type listed. The unit cost is the rate of a single unit of a particular item. For instance, the unit cost for labor may be calculated as the price per hour supplied.
Now that you have gone through steps 1 and 2 listed above and you have forecasted the total amount of people, materials and other expenses needed to develop the eLearning project, you have defined the its budget. A best practice will be to find back up funding. This is additional funding that, if needed, can be used to deliver the project.
Step 3: Develop schedule of expenditures
The expense schedule enables the project manager to calculate the total cost of undertaking the project on a daily, weekly or monthly basis. You can calculate it, based on your project's particular needs. This step consists on figuring out when the expenses will take place during the project´s timeline. By doing so, you can get an overview of your project´s cash flow, which tells you the amount of money you need at a given period of time during the its length.
Step 4: Define the financial tracking process
Now that you have an expenses schedule, you will need to define a process for monitoring and controlling it. This step is oriented to develop the mechanism that will track every expense, hopefully, on a periodic basis. If you can get your team to wait until an expense is approved before incurring in it, then you can control each expense more easily. In order to track the team´s operating cost, you will need to assign an hourly rate for each team member. The total amount charged for the hours undertaken by those resources must be shown in your schedule.
Step 5: Track and manage
Track, in real time (highly desirable) work effort accomplished versus your schedule. If you find that you are starting to spend more than you have budgeted, analyze the options you have to stay within budget:
- Re-forecast your expenses and present a new budget for approval.
- Start reducing costs immediately. This means spending less to get the same job done. Or alternatively, see if your sponsors will agree to a reduced scope for the project, so that you have less to produce.
- Start using your backup funding to get you through the project's crux.
Cash flow management requires you to always have enough funds available to cover your spending over the months ahead and track your spending at least every week.
SHIFT and your eLearning project's budget
How can SHIFT help you manage your eLearning project's budget? At first, as a project manager you might think SHIFT is devoted to help instructional designers do their jobs better. However, SHIFT includes tools that will help you keep your project under budget:
-SHIFT will give you visibility for the whole development process.
-SHIFT will dramatically reduce your TCO (Total Cost of Ownership), driving down the variability in maintenance and update costs to manageable and predictable level: no hidden maintenance costs.
-SHIFT allows you to assign tasks to different team members of your project and keep track of their progress within development environment. You will also keep track of the status of each task (really helpful in closing up all pending items before publishing a course).
-SHIFT will give you real time status on each piece of work to be done in order to finish your project on time and on budget.
