Cost estimation

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Improve IT project budgeting through accurate cost estimation. Better manage your outsourcing relationships through an objective understanding of cost drivers. Understand IT affordability through modelling with estimation tools

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Cost estimation

  1. 1. IT COST ESTIMATION IS A PROBLEM © Copyright 2014 All Rights Reserved - LODESTAR ADVISORY SERVICES Pty Ltd
  2. 2. “The single most important task of a project: setting realistic expectations… ….unrealistic expectations based on inaccurate estimates are the single largest cause of (project) failure.” Futrell, Shafer and Shafer, “Quality Software Project Management” © Copyright 2014 All Rights Reserved - LODESTAR ADVISORY SERVICES Pty Ltd
  3. 3. And the problem is as common today as a decade ago Healthcare.gov website 'didn't have a chance in hell' The failure rate for software development projects is high generally, particularly large ones like Healthcare.gov, says Standish Group data Overrun in big IT projects leads to one in three failures One-third of big technology projects such as the National Programme for IT are likely to get derailed after they have been running for two years, according to research. Contracts that are short are more likely to succeed than low-budget projects that last a long time, found the study from the University of Oxford’s Said Business School The research looked at around 2,200 projects worth a total $260bn in the US and Europe, split 35% across the private sector, with the rest the public sector. Of the projects documented the average cost overrun for ICT was 27%. The web provides a huge list of documented problems © Copyright 2014 All Rights Reserved - LODESTAR ADVISORY SERVICES Pty Ltd
  4. 4. So how do YOU set realistic expectations? © Copyright 2014 All Rights Reserved - LODESTAR ADVISORY SERVICES Pty Ltd
  5. 5. Use proven tools to take away the guesswork and optimism   IT project effort, cost and schedule IT services ongoing support © Copyright 2014 All Rights Reserved - LODESTAR ADVISORY SERVICES Pty Ltd  Application development effort, cost and schedule  Application maintenance
  6. 6. Use the SEER tools:  Before a project starts to accurately estimate effort, cost, duration and risk  In the middle of a project to see if it is likely to be delivered on time and budget – bad news doesn’t improve with age  At any time to estimate what impact changes will have on a project  After the project finishes to update the SEER databases to make them even more accurate for the next model  As needed to effectively manage your outsourcing agreement © Copyright 2014 All Rights Reserved - LODESTAR ADVISORY SERVICES Pty Ltd
  7. 7. Business benefits:  Cost reduction  Predictable risk profile  Accurate durations  Accurate resource estimates  Accurate total cost of ownership estimates  Accurate maintenance costs  Defendable and repeatable cost estimates © Copyright 2014 All Rights Reserved - LODESTAR ADVISORY SERVICES Pty Ltd
  8. 8. For more information on:  Cost estimating  Organisational cost estimating maturity  Implementing estimating centres of excellence  Implementing improved outsourcing governance  SEER tools Please visit: www.galorath.com or www.lodestar-as.com © Copyright 2014 All Rights Reserved - LODESTAR ADVISORY SERVICES Pty Ltd
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