All Courses
Login / Sign up
Get started

By signing up, you agree to our Terms of Use and Privacy Policy.
Reset your password
Enter your email and we'll send you instructions on how to reset your password.

Estimate Project Cost & Savings

Estimate Project Cost & Savings

Estimate Project Savings

In this topic, you will plug in your impact measurement and evaluate the savings related with the benefits. The CMDB is usually regarded as an enabler, so the savings of the CMDB project are based on the enhancements to services and functionalities that will be advantageous from the CMDB. Work with somebody in your finance management to change each advantage and impact from a performance statement into a monetary figure. Investments in IT come from decreasing expenses related with user, third-party services, software, hardware, and facilities.

For each performance enhancement listed in the impact measurement, you should produce a simple formula that associates the value with the cost saving. Transform performance enhancements to a projected cost saving unless increased service levels increase profits.

For the change Example:

  • Precise metric— Change achievement rate, for instance

  • Description of that metric— Number of effective changes divided by number of strategic changes

  • Present measure— For instance, 80 %

  • Goal after deployment— For instance, 90 %

  • Somebody in your finance management will help change that enhancement into a monetary figure, such as:

  • Decrease unsuccessful changes from 20 % to 10 % per annum

  • 3,000 total changes per annum x 20 %= 600 present unsuccessful changes per annum

  • Each unsuccessful change needs 40 hours x $90 per hour = $3,600

  • Benefit= 300 unsuccessful changes evaded x 40 hours x $90 = $1.08 million yearly savings

A better way to review projected savings is to estimate savings over a period of time, and then itemize based on projected efficiency advancement in various IT functions that will benefit from the CMDB.

If you need a more comprehensive benefit cash-flow estimation for an introductory project ROI, see the benefit cash-flow estimation in, “Calculate Project ROI.”

Estimate Project Costs

You will also need a total projected cost for your CMDB project so that you can associate the cost to expected benefits. As you have not yet designated a client or negotiated a price, use your decision and previous knowledge to create the approximations. Consult your colleagues at other corporations that have deployed a CMDB and get their view on project cost approximations.

Projected expenses should include not only preliminary deployment costs, but also the yearly cost of operating and sustaining the solution. Typical expenses you should consider in your assessment include the following:

  •  Project team expenses — Project team expenses (which you may have accounted for) directly points towards the expense of staffing and supervising the project and do not include expenses for processes or tools.

  • Software licenses —This comprises the cost of licenses for the complete stack of processes in the CMDB solution, from the database up through the CMDB processes and other associated technology.

  • Hardware — These costs are linked to hardware and amenities. You may need to add the recurring expenses of data-center server space and setup bandwidth.

  •  Yearly maintenance — This expense is the overall price of hardware and software maintenance based on an explicit contracted period, and may also contain the current amenities and network usage expenses.

  • Professional services — This includes all expenses linked with the team carrying out the work requisite to deploy and incorporate the solution.

  • Training — The CMDB will impact numerous groups within IT. Cost for conducting training if you want users to implement new solutions in their current process flows.

Arunavo Banerjee

0 Comments

Add Comment

Subject to Moderate