How do you estimate system migration costs accurately?

2 Assess your current state

The next step to estimate system migration costs is to assess your current state, including the size, complexity, and quality of your data, applications, and infrastructure. You need to evaluate the current performance, security, and compatibility of your system, as well as the existing issues, gaps, and dependencies. You also need to inventory your hardware, software, and licenses, and check if they are up to date, compatible, or transferable. The assessment of your current state will help you identify the challenges, risks, and opportunities for your system migration.

3 Estimate your future state

The third step to estimate system migration costs is to estimate your future state, including the expected benefits, outcomes, and features of your new system. You need to define the performance, security, and scalability requirements of your new system, as well as the desired functionality, usability, and integration. You also need to research and compare the available options, vendors, and solutions for your system migration, and evaluate their costs, benefits, and trade-offs. The estimation of your future state will help you determine the value, feasibility, and alignment of your system migration.

4 Calculate your direct costs

The fourth step to estimate system migration costs is to calculate your direct costs, including the expenses that are directly related to your system migration project. These may include hardware and software purchases or rentals, cloud service fees, data transfer fees, vendor fees, licensing fees, testing fees, and training fees. You need to estimate these costs based on the scope, current state, and future state of your system migration project, as well as the market rates and contractual terms. You also need to account for any discounts, incentives, or subsidies that may apply to your system migration.

5 Factor in your indirect costs

The fifth step to estimate system migration costs is to factor in your indirect costs, including the expenses that are indirectly related to your system migration project. These may include labor costs, opportunity costs, downtime costs, risk mitigation costs, contingency costs, and maintenance costs. You need to factor in these costs based on the time, effort, and impact of your system migration project, as well as the potential issues, delays, or failures that may occur. You also need to consider the long-term costs and benefits of your system migration, such as operational savings, revenue growth, or customer satisfaction.

6 Review and adjust your estimates

The sixth and final step to estimate system migration costs is to review and adjust your estimates, based on the feedback, validation, and testing of your system migration project. You need to compare your actual costs with your estimated costs, and identify any discrepancies, deviations, or errors. You also need to update your estimates based on any changes, additions, or reductions in your system migration project scope, requirements, or deliverables. You also need to monitor and track your system migration costs throughout the project lifecycle, and report and communicate them to your stakeholders.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?