Gartner estimates that one-third of IT projects in small to medium size organizations exceed budgets and schedules by 100%. That statistic does not include the sizable amount of projects that exceed budgets by 40, 50, 60% or more. That is a lot of cost overrun and schedule delays.
There are a couple of principle reasons why intranet projects dramatically exceed budgets and schedules. One is not operating with a true plan that specifically details the needs and requirements of the business, management, and the end users. Without a detailed blueprint, the project is left wide open to scope creep and meddling managers and executives that begin to ‘design by whim’ and re-engineer an unsound project.
A second principle reason for cost and schedule overruns is faulty budgeting. For example, an off the shelf portal or content management system (CMS) normally requires far more than just licensing and maintenance fees. In fact, it’s not uncommon that licensing fees only represent 5-15% of the total project cost – excluding staffing requirements.
“In the same way the cost of owning a car doesn’t end when you buy one and drive it off the lot — with insurance, maintenance, parking and gas— you have to budget for ongoing CMS costs,” writes Tom Marciniak, Senior Consultant, Prescient Digital Media, in More than the sticker price: budgeting for a CMS Managing Web 2.0.
“It’s easy to see how the ballpark figure you scribbled on a napkin and labeled “Cost of CMS” can be more involved than the initial figure that a vendor’s brochure or sales rep states,” says Tom.
“I was once sitting with a client on a conference call with a CMS vendor sales rep who was asked about what training costs would run. The client’s eyes widened noticeably when the sales rep quoted a fee that was greater than the initial CMS license! The client was then further taken aback when they were informed of the extra (and mandatory) annual support and upgrade fee.”
Read the full article More than the sticker price: budgeting for a CMS Managing Web 2.0.