How do you estimate IT infrastructure project costs accurately?

1 Define the scope and requirements

The first step to estimate IT infrastructure project costs accurately is to define the scope and requirements of the project clearly and comprehensively. This means identifying the goals, objectives, deliverables, specifications, and constraints of the project, as well as the stakeholders, roles, and responsibilities involved. You should also document the assumptions, risks, and dependencies that may affect the project scope and requirements. By defining the scope and requirements, you can avoid scope creep, unrealistic expectations, and unnecessary changes that can increase the project costs.

2 Choose the estimation method and tools

The next step to estimate IT infrastructure project costs accurately is to choose the estimation method and tools that suit your project type, size, complexity, and maturity. There are different estimation methods and tools available, such as bottom-up, top-down, parametric, analogy, expert judgment, and historical data. Each method and tool has its advantages and disadvantages, and you should consider factors such as accuracy, reliability, availability, and ease of use. You should also use more than one method and tool to cross-check and validate your estimates.

3 Break down the project into work packages

The third step to estimate IT infrastructure project costs accurately is to break down the project into work packages or tasks that are manageable, measurable, and assignable. This means dividing the project into smaller and more specific units of work that can be estimated individually and aggregated. You should use a work breakdown structure (WBS) or a similar technique to organize the work packages hierarchically and logically. By breaking down the project into work packages, you can improve the accuracy, granularity, and transparency of your estimates.

4 Estimate the resources and costs for each work package

The fourth step to estimate IT infrastructure project costs accurately is to estimate the resources and costs for each work package or task. This means identifying the quantity, quality, type, and source of the resources needed to complete each work package or task, such as labor, materials, equipment, software, and services. You should also estimate the duration, effort, and rate of each resource, as well as the direct and indirect costs associated with each work package or task. You should use reliable data sources, such as market rates, vendor quotes, historical records, and expert opinions, to estimate the resources and costs.

5 Add contingencies and reserves

The fifth step to estimate IT infrastructure project costs accurately is to add contingencies and reserves to your estimates. This means accounting for the uncertainties, risks, and changes that may affect the project resources and costs during the execution phase. You should use a risk management process to identify, analyze, prioritize, and mitigate the potential risks that may impact the project costs. You should also use a change management process to control, approve, and track the changes that may occur in the project scope and requirements. You should add a percentage or a fixed amount of contingencies and reserves to your estimates based on the level of uncertainty and risk.

6 Review and update the estimates regularly

The sixth and final step to estimate IT infrastructure project costs accurately is to review and update the estimates regularly throughout the project lifecycle. This means comparing the actual resources and costs with the estimated ones, identifying the variances and root causes, and adjusting the estimates accordingly. You should also monitor the project performance, progress, and quality, and report the status and issues to the stakeholders. By reviewing and updating the estimates regularly, you can ensure that they reflect the current reality and expectations of the project.

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?