Project Management Framework
Initiation - Cost Projection (FTE's & $'s)
Definition
The cost projection states development and implementation investments required to make the level of an IT project fully operational. Investment cost include all purchases, leases, and finance costs for hardware, software, installation, training, personal, purchased services, internal agency resources and all applicable taxes. In addition this statement includes a separate cost projection for system lifecycle costs, which are the on-going costs for maintenance, training, operations and applicable taxes over the expected life of the project's outcomes.
Why is this important?
The cost projection is important because it establishes the cost of the initiative for management and for budgeting and decision package purposes. It is also input into determining the project approval process and oversight levels.
Instruction
Identify the development costs of the project. It may be important to identify development costs by fiscal year to show when the resources are needed and provide linkage to the identified deliverables. Estimate costs to complete all necessary work including all deliverables. Develop and/or review estimates with appropriate experts. Project an overall cost and include at least a high-level description of these costs.
Also identify the ongoing maintenance and operation costs needed to continue the project's outcomes once the development effort has been completed.
Consider presenting both development and maintenance costs in a tabular format, including both dollar costs and FTE utilization. (Also identify project constraints that might impact the project's resources. Some projects may have costs defined in an earlier phase such as in a feasibility study). This dollar figure may then become a project constraint. Identify any known cost or funding constraints.
How to scale
For small projects, a simple total dollar figure will suffice. As a rule of thumb the more financial and human resources a project consumes, the greater the need for financial detail. Consider costing by project phase, or consider costing out projects by sub-projects such as hardware and software acquisitions, training, marketing, testing, development, deployment, etc. Remember that even for large projects, the charter document should be relatively brief, so be careful to not present too many numbers.
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Cost Projection Examples
Checklists