How to cost a project

April 28, 2008 at 2:53 am | Posted in Project Management, SDLC | 1 Comment
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If you have been asked to estimate the cost of a project, the best way to arrive at a reasonable figure is to breakdown the project into its SDLC components.
SDLC milestones may vary but a general breakdown is as follows:
1) Analyse
2) Design
3) Develop
4) Test
5) Deploy
6) Maintain

Like I said, these are just a high level breakdown but they are a good place to start.
Let’s examine each phase in depth.

Analysis
This step usually involves the Business Analysts. Each BA has their own way of doing what they do, but it sometimes involves USE CASES and other analytical techniques to achieve a reasonable understanding of the client’s requirements.
Design
This task usually involves a software architect, who liaises with the BA team to gain an understanding of the solution requirements.
Development
This phase is usually led by a Lead Developer who takes the architect’s plans and converts them into a product.
Testing
Depending on the type of organisation you are dealing with, this will either be a specialised person / department or it may involve one or more developers from the development team.
Deployment
This part of the project involves the OPS or IT departments as it normally requires infrastructure assests such as servers etc.
Maintenance
On going bug reportng etc ….

(Please note that very seldom, and in fact never in my experience, does the SDLC actually flow from top to bottom in a linear fashion. There are usually several loops between development and testing etc This topic is on costing and not the SDLC)

When costing a project one needs to start with the following procedure:

  • Hold a ‘Vision and Scope’ meeting with representatives from each of the SDLC teams. In this meeting a high level understanding will be reached as to the expected outcomes of the project.
    Each member will go back to their teams with an outline of the expectations, and be required to gather estimates as far as resources, timelines etc
  • When the project team next meet, all figures are made public and the team members substantiate their estimates under the scrutiny of the other team members.
  • Once a concensus has been reached the Project Manager will draw up a cost estimation based on the outcome of these meetings.

Obviously costing is only one aspect of the PM cycle, and this particular example is based on the ‘Delphi Wideband Method’.

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1 Comment »

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  1. Excellent article. I like your strategy for costing a project a lot.

    I am thinking about republishing the article on PM Hut. In case you’re OK with this, then please use the “Contact Us” form on the PM Hut site and we’ll take it from there.

    Thanks!


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