3.7 Updating the Integrated Schedule and Baseline Cost Document


In Phase 2 ”Design, the team presented the project s baseline costs. Estimates were given for hardware, software, services, and maintenance costs. The Project Manager and IT Manager are responsible for identifying vendors and negotiating contracts. By the end of Phase 3 ”Project Development, negotiations should be coming to an end for the purchase of products and services. The actual costs and delivery schedules should now be known.

One important cost of buying equipment and services is purchasing support and upgrades from the vendor. The vendor contract should include a three-year price for vendor support and upgrades. For products that cost less than $2,000, this typically costs between 60 and 80 percent of the product price. For products over $2,000, this typically costs between 15 and 20 percent of the price of the product. The IT department will also need to identify the internal cost of managing and running the software and equipment. This cost will include fully burdened overhead for employees or consultants . A project that includes a database analyst will include not only the cost of the computer and software but also of a systems administrator and a database administrator. Maintenance costs are composed of vendor costs as well as employee and consultant costs. The changes identified in the development review will need to be brought to the team. Sometimes these changes result in a change to the cost of the product.

3.7 in a Nutshell

After contracts are negotiated, the costs of hardware, software, services, and maintenance can be identified.

  • Cost of purchasing the hardware, software, and services

  • Cost of receiving upgrades and support for the purchases for the next three years

  • Employee and consultant costs of managing the hardware and software




Effective IT Project Management
Effective IT Project Management: Using Teams to Get Projects Completed on Time and Under Budget
ISBN: B000VSMJSW
EAN: N/A
Year: 2004
Pages: 105
Authors: Anita Rosen

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