These were the slides used for the poster session given at the Educause 2010 annual meeting. http://www.educause.edu/E2010/Program/PS020

1. Poster Sessions Wednesday, October 13 From 1:30 – 2:30 pm and Thursday, October 14 from 12:00 – 1:00

2. What’s with the Strange
Multi-color Boxes?
About Tag
Microsoft Tag is a new kind of 2D bar code that connects your Internet-
capable mobile phone quickly and easily to mobile content such as videos,
websites, product information, text, vCards, and other information. Using the
camera of your Internet-capable mobile phone you “snap” a Tag that then
takes you to the mobile content.
Since poster sessions are viewable during exhibit hours we’re using Tags to
provide some additional information and narrative for when we’re unable to
be in attendance. Simply download/install the Tag application to your
Internet-capable mobile device (it’s free and directions are below) launch the
reader that will utilize the camera to read the tags. Depending on the scenario,
it will trigger the intended content to be displayed, e-mail to be sent, vCard to
be saved, and so on.
How to get the Microsoft Tag Reader
iPhone: Available in the App Store
just search for “Microsoft Tag Reader”
All others: From your phone’s Web browser type: http://gettag.mobi
No Camera? (e.g. iPad, notebook, etc.)
You can type in the URL that is provided.
Why Microsoft Tag?
We chose Microsoft’s Tag over other 2D bar codes because Microsoft is a
corporate sponsor of EDUCAUSE. However, QR codes are provided as well.

3. http://goo.gl/FGND
What is A Cost Estimate?
The analysis of cost elements of a project proposal or on-going work. It
includes verification of cost data, determination and evaluation of elements
of costs, and projection of these data to determine the effect on price.
What Is A Cost Methodology?
An organized, documented set of practical ideas, proven practices,
procedures and guidelines used for determining one or more cost
elements of a cost analysis.
What is A Cost Model?
A set of mathematical relationships arranged in a systematic sequence to
incorporate/formulate a cost methodology(ies) in which cost estimates are
derived from inputs. Typically a cost model is in the form of a computer
program or spreadsheet.

4. http://goo.gl/MuFx

5. Parametric
Cost Estimating Relationships (CERs)
Learning Curve
Regression
Ratios
Computer Models
Design to Specification “Bottom-up”
Design to Budget “Top-down”
http://goo.gl/5xng

6. Both require extensive analysis of direct and (as
much as possible) indirect costs
Direct & indirect costs are identified/established
through the work breakdown structure (WBS)
May utilize/incorporate parametric methodologies
Bottom-up is requirements driven whereas Top-
down is funding driven
http://goo.gl/lPWx

7. 1.0 Hardware Costs
1.1 Servers
1.2 Storage
1.3 Network Equipment
1.4 Backup
1.5 De-installation/disposal fees
2.0 Software Costs
2.1 Applications
2.2 OS
2.3 Middleware
2.4 Security (NMS, access, etc.)
2.5 Media conversion (tapes)
3.0 Professional services
3.1 Project Management
3.2 Consulting
3.3 Training
3.4 Expenses (travel & per diem)
4.0 Site preparation and implementation
4.1 AC power cabling
4.2 HVAC
4.3 Racking
4.4 Network cabling
5.0 Recurring
5.1 Personnel
5.2 Hardware maintenance
5.3 Software maintenance
5.4 AC power & HVAC
5.5 Insurance
6.0 Miscellaneous
6.1 Parallel operations (maintenance, backfill, etc.)
6.2 Indirect cost burden
http://goo.gl/BXf2

8. Based upon historical data and statistics
Industry/use specific
Statistically viable (F & T Statistic)
Home Grown Industry “Accepted”
Avg. HD Requests/Business Day: 7.68 System Project Management (SPM)
Avg. Time (Hrs) to Resolution/Request: 3.25
General & Administrative (G&A)
Approx. Requests/Year: 1,896
Average Change Traffic (ACT)
Approx. Person Hours/Year: 6,162
FTEs Required for SMO Requests: 4
http://goo.gl/bCIv

9. 100
90
80
70 Competence
Labor (Time)
60
50
40
30
Time to Resolution/Completion
20
10
0
0 20 40 60 80 100 120
Task Repetition
http://goo.gl/R8tD

10. http://goo.gl/Xvfv
8.0
Implementation Costs ($M)
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
II III IV V VI
Institutional Tier/Class Best Fit
Known ERP Implementations

11. Integrated Commercial Off-the-Shelf ERP
FTEs - 15
Total Annual Personnel Cost = $755K
Management Ratio = 16%
Best of Breed/Home Grown 3GL System
FTEs - 27
Total Annual Personnel Cost = $1.3M
Management Ratio = 33%
http://goo.gl/nWfs

12. COnstructive COst MOdel (COCOMO)
SEER-SEM
PRICE-S
Software Cost Modeling System (COSMOS)
http://goo.gl/mTJd

13. (PH)AM = (ACT)(PH)DEV
Contract Modifications Only
SMO Staff Only
(PH)AM : Annual Maintenance in Person Hours 2,347
(PH)DEV : Development Effort in Person Hours 8,094
ACT : Fraction of software that undergoes change during a year 29.00%
TBR SMO Staff Only
(PH)AM : Annual Maintenance in Person Hours 809
(PH)DEV : Development Effort in Person Hours 8,094
ACT : Fraction of software that undergoes change during a year 10.00%
All Modifications To Date
SMO Staff Only
(PH)AM : Annual Maintenance in Person Hours 6,891
(PH)DEV : Development Effort in Person Hours 23,763
ACT : Fraction of software that undergoes change during a year 29.00%
TBR SMO Staff Only
(PH)AM : Annual Maintenance in Person Hours 2,376
(PH)DEV : Development Effort in Person Hours 23,763
ACT : Fraction of software that undergoes change during a year 10.00%
http://goo.gl/rq5h

14. The discounted value of a project’s life cycle
benefits is compared to the discounted value
of its life cycle costs
Qualitative vs. Quantitative
Discounted Cash-flow (DCF) Methods
Net Present Value (NPV)
Internal Rate-of-return (IRR)
http://goo.gl/M2B0

15. 7/1/1999 - 1/22/2004 1/22/2004 - 12/31/2009
“Home Grown” Systems "Off-the-Shelf" System
“Build vs. Buy” “Useful Life” of System
Design Development Fielding Sustainment
Sustainment
Acquisition Costs
(Off-the-Shelf)
1/24/2004
http://goo.gl/WZTp

16. TCO can and usually does vary
dramatically against TCA
TCO is more relevant in determining the
viability of any capital investment
Vendors typically focus on either acquisition
or maintenance costs but the two are
considered together for TCO
http://goo.gl/739m

17. Whether or not to pursue a project
Select among alternatives with different
benefits
Select among competing projects in IT
Select among competing projects in and
outside of IT
http://goo.gl/q62d

18. http://goo.gl/3VPT
NPV of Two Technologies/Methodologies
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
Year #1 Year #2 Year #3 Year #4 Year #5
Methodology A Methodology B
5 Year Cumulative Costs for Methodology A vs.
Methodology B
Yr #1 Yr #2 Yr #3 Yr #4 Yr #5 NPV
Methodology A 697,500 1,274,100 1,861,767 2,460,722 3,071,192 $2,817,244
Methodology B 1,365,000 1,569,750 1,774,500 1,979,250 2,184,000 $2,064,151

19. Ratio of resources gained or lost on a project
relative to the amount of resources invested
Choice of investment alternatives can be
essential to high ROI
Leveraging Economies of Scale Results in a
Greater ROI
Appreciating vs. Depreciating ROI
Campus Delivered vs. Collaborative Online Program
Campus Collaborative
Course Development Costs $3,000 $3,000
1x Payment $6,000 Many Indirect Cost Savings
Online Fee/Course 40 40 -24x7 Helpdesk
Reimbursement Rate/Course 100% 70% -Library
Number of Students 20 20
Marginal Return/Course $40 $28 -Hosting
Total Revenue $800 $6,560 -Prof essional Development
ROI -73% 119%
http://goo.gl/fIuf

20. Distance Education Programs
Campus Delivered vs. Collaborative Online
Campus Program 2 3 4 5 6 7 20 21 22 23 24 25 26
Course Development Costs $3,000
Online Fee/Course 40 40 40 40 40 40 40 40 40 40 40 40 40 40
Reimbursement Rate/Course 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Number of Students 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Marginal Return/Course $40 $40 $40 $40 $40 $40 $40 $40 $40 $40 $40 $40 $40 $40
Total Revenue $800 $1,600 $2,400 $3,200 $4,000 $4,800 $5,600 $16,000 $16,800 $17,600 $18,400 $19,200 $20,000 $20,800
ROI -73% -47% -20% 7% 33% 60% 87% 433% 460% 487% 513% 540% 567% 593%
Collaborative Program
Course Development Costs $3,000
1x Payment $6,000
Online Fee/Course 40 40 40 40 40 40 40 40 40 40 40 40 40 40
Reimbursement Rate/Course 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% 70%
Number of Students 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Marginal Return/Course $28 $28 $28 $28 $28 $28 $28 $28 $28 $28 $28 $28 $28 $28
Total Revenue $6,560 $7,120 $7,680 $8,240 $8,800 $9,360 $9,920 $17,200 $17,760 $18,320 $18,880 $19,440 $20,000 $20,560
ROI 119% 137% 156% 175% 193% 212% 231% 473% 492% 511% 529% 548% 567% 585%

21. Don’t start with a predetermined conclusion
Clearly define problem with realistic baseline,
all reasonable alternatives, and benefits and
costs measures
Monetize benefits and costs as much as
possible
Use credible data
Deal appropriately with risk and uncertainty
http://goo.gl/05nW

22. Cost
Figure A
http://goo.gl/3LLt
Time Scope
Cost
Figure B
Time Scope

23. Cost
Figure A
Cost
Figure C
Time Scope
Cost
Time Scope
Figure B
Time Scope
http://goo.gl/DF1W

24. OBJECTIVES BUDGET
Project Costs http://goo.gl/Fi1P
Competing Agendas
Cost of
Ownership Understanding
Business Requirements
Consistency
Investment Return
Requirements
Focus Project Scope
Bad Assumptions
Expected Life
Unrealistic Expectations Technical Budget Fit
Viability &
Value Add
Requirements
Benefits
PROJECT RISK
Control Senior Management Support
Liability Collaboration
Provisioning Structure &
Stability &
Life Cycle Functionality Strategy
Liability
Politics
Complexity Governance
Software Releases
Business
Stability
Requirements
Communication
Maintenance & Training &
Upgrades Documentation Technical
Scalability Customization
Support Change Management
Re-skilling
Readiness Assessment
Disaster Recovery Integration & Upgrades
Skill Mix
TECHNOLOGY SOFTWARE
Functional
Recruit & Retain
MANAGEMENT

25. Business Case Requires Cost Analysis
Judgment
Optimism Bias
Strategic Misrepresentation
Qualitative Issues Accompany Cost
Risk Needs to be Evaluated
http://goo.gl/pnIt

26. The Society of Cost Estimating and Analysis
http://www.sceaonline.net/
The International Society of Parametric
Analysts http://www.ispa-cost.org/
Data & Analysis Center for Software
https://www.thedacs.com/databases/url/key/4/152
Author’s Pearltree http://pear.ly/woxj

27. Thomas S. Danford
Chief Information Officer
Tennessee Board of Regents
_____________________________________________________________________
1415 Murfreesboro Pike, Suite 350 | Nashville, TN 37217
Phone 615-366-4451 | Fax 616.366.3979
www.tbr.edu
vCard
Edwin T. Cornelius, III, Ph.D.
president
collegiate project services
a cornelius & associates company
“helping higher education
manage critical technology projects”
_____________________________________________________________________
631-g harden street | columbia, sc 29205
phone 877-454-1290 | fax 803.254.0183
www.collegiateproject.com
vCard