Estimate the Project Cost and Save

Estimate the Project Cost and Save

Estimate Project Savings
This topic will help you to calculate your impact measurement and the savings associated with these benefits. The CMDB is often viewed as an enabler. Therefore, the savings from the CMDB project are based upon the enhancements to services or functionalities that the CMDB will provide. To transform each benefit and impact from a performance report into a monetary figure, work with someone in finance management. IT investments are made from decreasing expenses related to user, third-party, software, hardware, or facilities.
You should create a simple formula to associate the value and cost savings for each performance enhancement in the impact measurement. If profits are not increased, transform performance enhancements into a projected cost savings.
Here’s an example of a change:
For instance, Precise Metric– Change Achievement Rate

Description of this metric – Number of strategic changes divided by the number of effective changes

Current measure– For example, 80 %

Goal after deployment– For instance, 90 %

Someone in your finance management can help you convert that enhancement into a monetary figure such as:

Reduce unsuccessful changes from 20% to 10% per annum

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

40 hours of unsuccessful change = $90 an hour = $3,600

Benefit = 300 unsuccessful changes avoided x 40 hoursx $90 = $1.08 Million in annual savings

It is a better way to evaluate projected savings. First, estimate savings over a time period and then itemize based upon projected efficiency improvements in various IT functions that will be benefited from the CMDB.
For a more detailed benefit cash flow estimation for an introductory project ROI see “Calculate Project ROI”
Estimate Project Costs
To be able to compare the costs of your CMDB project with the expected benefits, you will need a total estimated cost. You have not yet chosen a client or negotiated the price. Instead, use your knowledge and previous decisions to calculate the approximate cost. Ask your colleagues from other companies that have used a CMDB to get their opinions on project cost estimates.
Not only should the projected expenses include the initial deployment costs but also the annual cost of operating and maintaining the solution. These are some examples of typical expenses that you should consider when completing your assessment:
Project team expenses — These expenses, which you may have accounted to, directly point towards the cost of staffing and supervising a project. They do not include any expenses for processes and tools.

Software licenses — This includes the cost of software licenses for the entire stack of processes in CMDB solution. These include the database, CMDB processes, and any other technology.

Hardware — These costs are related to hardware and amenities. It is possible to add on the recurring costs of data-center server space or setup bandwidth.

Yearly maintenance — This expense covers the total cost of hardware and software maintenance for a specific period. It may also include current amenities and network usage costs.

Professional services — This includes all costs associated with the team that is responsible for deploying and integrating the solution.

Training — The CMDB will have an impact on many IT groups. Training costs are required if users want to implement new solutions into their existing process flows.

Arunavo Banerjee