A Practical Approach for IT Governance

Archive for October 2012

A Mass and Weight Metaphor for Estimating Project Costs

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Several decades back, I was evaluating how organizations estimated costs of IT projects, and why there was a huge variance between budgeted costs and actual costs.  I noticed that people used the size of the project (function mass) as one of the dominant variables in estimating the costs of the project.  My early analysis across hundreds of projects showed that function mass changed because of scope creep and project volatility.  While scope creep and project volatility were dominant causes, the organizational culture played an equally important role.  I coined the term function mass and function weight to help understand the role of organizational dynamics in the actual performance of a project.  Mass is constant, where as weight is dependent on the gravity.  Using this metaphor, the cost of an IT project (mass) is weighted by the organizational dynamics.

Let us take a simple analogy.  Assume you are migrating from an old email system to a modern platform such as Exchange in the cloud. Like all practical CIOs, you will research with your peers and consultants to get a ball-park cost taking into consideration the number of licenses needed, storage allocations needed, features such as syncing with mobile devices, integration with VoIP system, etc.  These costs are like mass.  If you use this as the basis, you will likely run into issues as you have not catered to the organizational culture.  Are your users sophisticated users of e-mail where you have to pay attention to customized migration and special training?  Are your users very naïve and need more hand-holding?  How receptive are your users to change?  How much trust and faith do they have in the IT department?  If you feel that these do not affect the overall project costs, then I am afraid, my blog may not have served its purpose.

Most CIOs, at least the ones who have been around, recognize that technology training and adoption costs are extremely critical and should be incorporated in the project  life cycle costs.  The notion of function mass and function weight are very useful in developing pragmatic cost estimates.

Written by Subbu Murthy

October 31, 2012 at 7:47 am