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

1. IT COST
ESTIMATION IS
A PROBLEM
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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”
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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
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4. So how do YOU
set realistic
expectations?
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5. Use proven tools to take away the
guesswork and optimism


IT project effort, cost and
schedule
IT services ongoing support
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 Application development
effort, cost and schedule
 Application maintenance

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
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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
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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