Why this Service?

Would it surprise you to learn that there are over 550 vendors that list themselves as producers of custom developed courseware? That is only the number that we’ve cataloged through our annually published worldwide Directory of E-Learning Providers (listing information about a total of 1,062 e-learning vendors providing a wide range of tools and services). With so many players in this space, we wondered how organizations go about selecting outsource development partners.

As part of this study, we asked over 200 people – chief learning officers (CLO), e-learning managers and training directors (most of which listed themselves as internal purchasers of outsource services) – to name the first 10 custom development companies that came to mind. We were surprised to discover that most of them couldn’t even name five companies. In further discussions, we found that most companies chose their outsource partners through simple “word of mouth,” or they selected companies that were in close geographic proximity to themselves. Our conclusion is that there is very limited brand recognition for providers of custom development services, and there is room for significant improvement in the process and tools used to investigate, analyze, and select outsource partners.

The purpose of this study is to provide apples-to-apples, comparative information about custom developers, similar to what we have done previously when examining LMS, LCMS, live e-learning, simulation products and services, and authoring tools. This study provides detailed information so organizations can make informed decisions when choosing an outsource partner. You can use this KnowledgeBase to learn about each vendor's instructional development processes, project management philosophy, competitive strengths, company size, staffing and background experience, awards, their customers, areas of specialty, technology and tool preferences, ballpark pricing information, etc. You can also use this information to find a company in a specific geographic location or one that focuses on your area of subject matter expertise.

Our research began by conducting surveys, focus groups and interviews with CLOs, e-learning managers and training directors to learn about their experience with custom developers. We asked them about specific projects, including issues such as:

• Who they used for custom content development
• What kinds of content was created for each project
• How satisfied they were with the results
• If they would recommend the custom developer to other organizations
• How many hours of finished content the developer produced
• What they paid for the final project
• What they liked about the development partner
• What they didn’t like
• What companies came to mind when thinking about custom development

The results of this study can be found in this KnowledgeBase. We were pleasantly surprised to learn that 94 percent of respondents said they had a mostly good experience with the developer and that they would most likely recommend the developer to other companies.

As mentioned previously, most of the survey participants could only name about five custom development companies (which is remarkable, since there are literally hundreds of vendors in this area). However, from the companies that were listed we were able to compile a list of the 20 companies they mentioned most often. Here is the list in order of the ones most frequently mentioned.

Most frequently mentioned custom content developers:

• Accenture Learning
• DigitalThink
• Allen Interactions
• CognitiveArts
• IBM
• MindLeaders
• Allen Communication Learning Services
• KnowledgeNet
• NIIT
• SkillSoft
• Strategic Management Group (SMG)
• EDT Learning
• Novations (formerly Strategic Interactive)
• MediaPro
• NETg/Thompson
• RWD Technologies
• Intellinex
• KnowledgeImpact
• ExperienceBuilders
• Pinneast

In addition to the interviews, we also collected RFPs (requests for proposals) from many of these organizations for custom courseware development services. We analyzed the RFPs to determine what information was most often needed by decision makers to assess the viability of a custom development partner candidate. A list of the top 10 criteria used to select a courseware vendor can be found in the overview of Section II – How to Choose an Outsource Development Partner (Factors to Consider).

We reverse engineered the RFPs and created our own request for information survey based on the most common and differentiating factors. This is similar to the process we’ve used to gather information about enterprise e-learning technologies such as LMS and LCMS solutions. It provides a common frame of reference for assembling apples-to-apples comparative data that can be used by organizations to drive their selection process.

We assembled an expanded list of courseware development companies mentioned by our 200+ training professionals, selected some additional courseware vendors with strong focus on specific vertical market sectors (such as healthcare, finance and high-tech), and sent out open invitations for vendors to participate in the process. Each vendor had a chance to reply to the request for information as if they were replying to an actual customer. This information has been compiled for your use and makes up the bulk of this KnowledgeBase. The Brandon Hall Research team spent significant time editing the content to remove flagrant marketing messages that otherwise mask factual information about each company.

In all, we collected well over 1,000 pages of information on over 100 different custom courseware vendors, storing all the information in a database, making it possible to cross-tabulate and create a benchmarking analysis of the courseware development space. This analysis includes information, such as:

• Types of courses most often outsourced by end-user customers
• What customers liked about working with custom content developers
• What they didn’t like about working with them
• Size of a typical custom courseware development vendor
• Geographic location of custom development activity
• Staff allocation of a typical custom development team
• Average number of customers per courseware developer
• Vertical market distribution of customers
• Competitive analysis: who listed whom as their most frequent competitor
• Tools most typically used by custom courseware developers (authoring, media production, support and other)
• Percentage of developers that produce their own e-learning tools and technology
• Pricing averages and ranges for various levels of interactive content
• What end-user customers are typically paying for custom development

As far as we can determine, this is the first time that this much information about the custom development space has been collected as a single resource. Our editors commented that the candor of the respondents was remarkable. For example, 88 percent of the participants listed their pricing averages and ranges for courseware development. We hope that this will start some meaningful discussion about the relationship between development costs versus levels of interactivity.

As you will soon learn, the KnowledgeBase is extremely data-centric. It is not meant to be read in a linear fashion; rather, it will assist you in rapidly identifying candidates for upcoming development projects or just understanding the courseware development landscape. The flow of the KnowledgeBase is modular, with each section having its own point and purpose, as follows:

• Section I – Introduction: Everything you need to know about the background of the research and how to get started.

• Section II – How to Choose an Outsource Development Partner (Factors to Consider): This section is designed for those who are perhaps choosing a custom development partner for the first time or those who want to understand how to interpret the vendor profiles. It begins with an assessment of the top 10 characteristics customers look for when selecting a courseware development partner, then systematically maps the heading you will find in each of the vendor profiles. You can use this information to prioritize what headings to key on when studying the vendor profiles as part of your selection process.

• Section III – Benchmarking Analysis: Participating Companies: At first glance, this appears to be general information about the courseware development industry. However, it will have a more important use in your selection process as you compare specific vendors against the benchmark. For example, let’s say that you are looking for a specific vendor that uses the ToolBook authoring tool to create courses. A quick glance under the heading “Tools Most Typically Used by Custom Courseware Developers” indicates that ToolBook is the seventh most popular tool used. Chances are that you will find several developers that use ToolBook in the profiles. Using another example, you might be looking for a very large custom content developer for a massive project. You anticipate that the company will need at least 100 courseware developers on staff. By using information in this section, you determine that 9 percent of the companies included in the study have more than 100 developers. That means there are only a small number of companies that will be able to completely fill your need using a single source. Another important resource in this section are the lists of quotes by end-user customers about what they liked and didn’t like about working with courseware development partners. Reading this list will help you prepare to interview perspective candidates and ask the right questions about how they work with their customers.

• Section IV – Pricing vs. Levels of Interactivity: As the description implies, this section is all about pricing. Before you begin your search, you may want to have a good idea about what you might be willing to spend. In this section, you will learn quickly that the more interactive the courseware, the more you will need to spend to have the work completed. You can use our “Three Levels of Interactivity” model to set expectations for pricing vs. interactivity. Because this section only deals with pricing averages and ranges, you can also map this information against specific vendors under consideration to see if they fall north or south of the averages. It isn’t bad to pay more than the average, but it is a good idea to understand the levels of quality you might expect for the increased price (or sacrifice for lower priced development). This section also indicates that customers (in our survey) are paying an average of $26,618 per finished hour for courseware development.

• Section V – Custom Courseware Developer Profiles (with profiles for each custom content developer that participated in the study): You can turn directly to this section if you already know which companies you’d like to explore. In this section, you will find a detailed profile of each of the custom development companies, including specific information about their company size, number of clients, types of projects completed, year the company started, top three competitors, competitive advantages, instructional design process, preferred instructional design methodologies, project management philosophy, staff make-up, experience with innovative courseware design, awards, top 20 clients, geographic location of customers, industries served, industry specialties, links to online demo courses, tools they typically use for development projects, whether they sell their own e-learning tools or products, a statement about their experience with industry standards, pricing information, etc. The profiles will help you “power shop” for the company that best meets your needs, based on whatever criteria you feel is most important.

• Section VI – Dynamic Comparative Grids: This is an online tool that will allow you to create your own comparisons between selected vendors. Just select candidates from the list and click the "Compare" button. The KnowledgeBase will automatically create a side-by-side comparison of selected companies.

• Section VII – Custom Content Developer Selection Tool: If you would like to filter your selection process by choosing a set of parameters (such as vendors who specialize in the use of a specific authoring tool, the cost of development, or location of the company), this is the tool to use. It leverages the vast amount of data in the KnowledgeBase to pinpoint custom content developers that match your requirements.

• Appendix: For those new to e-learning, you will find a glossary of terms in the appendix. The appendix also has a master list of the contact information for all the custom courseware developers covered listed in this KnowledgeBase.